If you’re a driver, blog writer, or other type of gig economy worker, being your own boss means you get to choose when you work and how much you work. You call the shots.
But when it comes to self-employed taxes, it’s also on you to stay up to date with what’s required—and what’s changed.
Recently, new legislation called Bill C-47 came into effect. It concerns the platforms—like websites or apps—you use to earn a living and the information that platform operators must share with the Canada Revenue Agency (CRA) on your behalf.
Bill C-47 involves amendments to the Income Tax Act. So before we outline what this new legislation includes, let’s briefly cover some basics.
- Bill C-47 includes expanded legislation that requires platform operators to collect and report identifying information about sellers who use their platforms—and the income they earn.
- Noncompliance with Bill C-47 can result in financial penalties.
- Bill C-47 also includes several administrative changes that will require taxpayers to use the CRA’s electronic services rather than sending information manually.
What is Canada’s Income Tax Act?
The Canada Income Tax Act is legislation that contains all the laws related to taxation in Canada, in it’s simplest terms. These laws include rules and regulations on what income is taxable and which deductions can be claimed, federal and provincial tax rates, penalties and fines for people and corporations that don’t comply with regulations for reporting and paying income tax, and tax incentives to encourage certain behaviour like charitable donations.
Bill C-47 involves amendments to Canada’s Tax Act around “mandatory disclosure rules” and what needs to be reported to the CRA. These changes will give the government more clarity on transactions and help pinpoint potentially aggressive tax-planning strategies. What follows is a deeper dive into these details.
What is Bill C-47?
Bill C-47 legislation contains a wide range of tax measures, but what’s most important to you as a gig worker are some new requirements for platform operators.
A quick overview: a platform operator is any software (like a website or app) that allows sellers (like Uber drivers, for example) to connect with their customers. Some of the best-known platforms are transportation and travel platforms like Uber, Lyft, and Airbnb or e-commerce platforms like Amazon, Etsy, and eBay. Sellers are people like you, who are registered on the platform and use it to sell products or services.
Bill C-47 now requires digital platform operators to collect and report information about sellers who use their platforms, including the income they earn.
When did Bill C-47 get passed?
Planning for Bill C-47 has been in the works for a couple of years, but like most bills, it’s taken time to be passed. Officially introduced in the 2023 federal budget, Bill C-47 has now been enacted and is in effect as of January 1, 2024.
What are the key measures contained in Bill C-47?
Here are some of the new measures that affect platform operators and sellers:
New reporting requirements for platform operators
Bill C-47 includes an important addition to current tax rules and requires that a platform operator that offers services or products reports several things:
First, it must report identifying information for its own business—name, registered office address, and tax identification number (TIN).
Second, it has to collect information for each seller that uses the platform and share it with the CRA. That includes:
- Full name
- Date of birth
- Primary address
- Tax identification number (TIN): For most people living in Canada, their authorized tax identification number is their 9-digit social insurance number (SIN), issued by Service Canada.
Financial mandatory disclosure rules
Platform operators must also report both their own financial transactions and collect information on revenues earned by sellers who use their platforms and are based in Canada. This new legislation aims to address concerns among tax authorities that tax obligations are being miscalculated by digital platforms and sellers and aren’t always visible to the CRA and other tax administrations.
Platform operators are also required to give sellers a copy of the information they provided to the CRA, so that the seller is aware of what is being sent on their behalf.
Be sure this information aligns with your own records—and matches what you report at tax time.
What is the reporting deadline?
Platform operators must file an information return with the CRA, containing the required information relating to their sellers, no later than January 31 of the year following the calendar year in which a seller is identified as a reportable seller.
What is the penalty for noncompliance?
Not complying with these new mandatory disclosure rules could mean stiff CRA penalties, so be sure you’re aware of what’s required.
What can you expect when it comes to tax administration?
Put down your pencil, because the CRA is becoming more insistent that taxpayers file online. Bill C-47 includes several administrative changes that will require taxpayers to use the CRA’s electronic services instead of sending information manually.
- Electronic payments: Payments to the CRA over $10,000 must now be made electronically, with few exceptions. If you don’t comply, you’ll be penalized $100 each time you don’t follow the rules.
- Electronic filing thresholds for information returns: If you are filing 5 or more T4 slips, they must now be filed electronically. The penalty for failing to do so ranges from $125 to $2,500, depending on the number of slips.
- Electronic signatures: Bill C-47 now permits electronic signatures for Form T183 (allowing your filer to send your income tax and benefit return electronically) and Form T2200 (certifying that you were required to pay for your own employment expenses).
What does Bill C-47 mean for the GST/HST?
If you’re a ride-sharing driver in any province, or once you meet the requirements to register for the goods and services sales tax (GST)/harmonized sales tax (HST) number, you’ll need to remit and collect the GST/HST from each transaction. Bill C-47 includes an amendment to the GST/HST definition that ensures that services provided by a payment card network operator will continue to be subject to GST/HST. So, some good news here—since no news is good news—essentially, nothing has changed.
Keep meticulous records
Be sure to maintain careful bookkeeping records. Track your income closely to ensure that what the platform operator reports to the CRA aligns with your records, and take careful note of your expenses. If you’re an Uber driver, for example, those expenses could include car maintenance and gas as well as phone and data usage.