Quote:
Originally Posted by freedogger
Consulting for one place for five years straight? Be careful that CRA doesn't re-classify you into a Personal Services Business:
"A business carried on by a corporation will generally be a PSB if the following two tests are met: - The individual performing the services (or someone related to the person) owns 10% or more of any class of shares of the corporation, and
- Without the use of the corporation, the individual would reasonably be regarded as an employee of the person or partnership paying a fee to the corporation."
http://www.bdo.ca/library/publicatio...s/2004-03a.cfm
I'm assuming you invoice this company above and are not an employee. If not, disregard my comment. These rules are a pain for any consultant in Calgary from what I've seen (myself included). |
There are a few places in town that were very badly abusing that rule. One of those places had numerous warnings from the CRA about what they were doing (the "employer" of the personal services corporation would owe back CPP/EI to the tune of millions). In order to keep the flexibility they like having an all contract IT department, they just outsourced the whole lot.