Income tax and e-commerce

All existing tax laws apply to business conducted over the Internet.

How you report income from the business will depend on whether the business is conducted as a:

• Sole proprietorship or partnership;
• Corporation

Where a business is operated over the Internet any of the following issues may be relevant with respect to the application of the Income Tax Act (Canada)(the “Act”) and Canada's income tax conventions. This is not intended to be an exhaustive list of all possible relevant issues and should be used only as a guide.

If you have any questions or comments regarding any of the issues addressed below please contact the CRA Income Tax Rulings Directorate at (613) 957-8953.

• carrying on business over the Internet and income characterization
• capital cost allowance - computer software and Web site development costs