This content was created by Richard Canfield. This content was uploaded by Richard Canfield. This is a YouTube video titled "Active Business Income Eligibility 💪" created on April 22, 2023, discussing Canadian tax rules regarding personal service businesses and the eligibility for business deductions for contracted individuals versus T4 employees.
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The other rule that they've introduced to prevent people from incorporating their own individual services to a direct company, rather than in substance, they argue in substance through an employee. They want to remove the access from Canadians to getting business deductions, because if you are a contracted individual or a corporation, you're eligible because you're earning income to deduct expenses on it, whereas if you're T4, you are not eligible to. And they didn't want to do that either. So I just kind of want to highlight just the basis of using the personal service business as an example to show that not everyone's an active business. They have to prove that they're an active business. And what the CRA would want is to put someone into the definition of a personal service business. And you have to be able to stand very strong and clear to defend that position.