The on-demand economy depends on temporary and freelance work, or short-term contracts. If you communicate with your customers using online platforms or applications, such as Clickworker, Crowdsource or Fiverr, to provide them with your services, you’re usually considered self-employed rather than an employee. You can work anywhere, because online platforms enable you to stay in touch with the companies that hire you, no matter where they are in the world.
Tax obligations
As a resident of Canada, you must declare your income from all sources when you file your income tax return. This includes any income you earn from businesses located outside the country.
If you paid tax on foreign income, you may be entitled to a tax credit. In addition, you may be able to claim eligible expenses related to income you earned in the on-demand economy. To declare expenses, you must keep proper financial records, including:
- a list of all income from on-demand work;
- details of when, how and where you earned the money;
- details of the expenses you incurred to earn the money, supported by invoices, receipts or vouchers.
GST/HST obligations
If you operate online with a reasonable expectation of profit and your taxable supplies total more than $30,000 over four calendar quarters, you must register for GST/HST, collect tax on your taxable sales and remit it to the Agency. For more information on GST/HST registration requirements, see When to register and start charging GST/HST.
If you have any questions or comments about this or any other commodity tax issue, please do not hesitate to contact our team.
Sylvie Therrien | Associate – Commodity Taxes
Telephone: 450 971-1550 ext. 3321
How to correct your tax situation
If you haven’t declared the income you’ve earned in the on-demand economy, you may have to pay taxes, penalties and interest. By voluntarily correcting your tax record, you can avoid or reduce penalties and interest.
To correct your tax situation (including making corrections to your GST/HST returns) and declare income you didn’t report in previous years, you can request :
- a change to your tax return;
- an amendment to your GST/HST return;
- a correction through the Voluntary Disclosure Program.
SOURCE Canada Revenue Agency
