Self-employed Business, Professional, Commission, Farming, and Fishing Income: Find out if this guide is for you

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Find out if this guide is for you

Use this guide if you earned income as a:

It will help you calculate your self-employment income to report on your 2023 income tax return.

Though a trust may be considered an individual, this guide is not for trusts. Do not use this guide if you are a trust or a corporation.

If you are a trust, use Guide T4013, T3 Trust Guide.

If your business is incorporated, use Guide T4012, T2 Corporation – Income Tax Guide.

This guide contains tax information for all types of self-employment business income. However, some tax rules are not the same for all types of business. In this document, you will find the following icons:

briefcase icon The briefcase icon means the information is specific to business and professional income and Form T2125, Statement of Business or Professional Activities.

farm icon The tractor icon means the information is specific to farming and Form T2042, Statement of Farming Activities.

fish icon The fish icon means the information is specific to fishing and Form T2121, Statement of Fishing Activities.

If your business is conducting research and development (R&D) in Canada

The Scientific Research and Experimental Development (SR&ED) Program gives tax incentives to encourage Canadian businesses of all sizes and in all sectors who conduct R&D to help create a thriving R&D culture in Canada. Learn how you can claim those incentives by going to Scientific Research and Experimental Development (SR&ED) tax incentives.

farm icon For farmers

If you are participating in the AgriStability and AgriInvest programs, you have to use the applicable guide:

fish icon For fishers

You can be a self-employed fisher and also a member of one or more fishing partnerships. For instance, you may have fished for groundfish by yourself and also have been in a lobster-fishing partnership with your child.

Generally, we consider you to be a self-employed fisher if all of the following applies to you:

You are considered to be self-employed if you have a business relationship with a payer and you have the right to determine where, when and how your work is done. For more information, see Guide RC4110, Employee or Self-Employed.

Throughout this guide, we refer to other publications such as guides and forms. Generally, if you need any of these, go to Forms and publications. You may want to bookmark this address for easier access to our website in the future. For more information on archived content of interpretation bulletins, go to What the Archived Content notice means for interpretation bulletins.

What's new for 2023

New items in this guide are outlined in colour. These include changes introduced in the 2023 federal budget that had not yet become law at the time this guide was published.

Automobile deduction limits

For Class 54 zero-emission passenger vehicles (new and used) acquired on or after January 1, 2023, the prescribed amount increases from $59,000 to $61,000, before tax.

For Class 10.1 passenger vehicles (new and used) acquired on or after January 1, 2023, the prescribed amount increases from $34,000 to $36,000, before tax.

Automobile deductible leasing costs increase from $900 to $950 per month, before tax, for new leases entered into after 2022.

Flipped property rules

Starting January 1, 2023, profits from the disposition of a flipped property are fully taxable as business income, not as a capital gain. A flipped property is a housing unit (including a rental property) located in Canada or a right to acquire a housing unit (such as assignment sales) located in Canada that was owned or held for less than 365 consecutive days before its disposition, unless it was already considered inventory or the disposition can reasonably be considered to occur due to, or in anticipation of, certain life events.

For more information, see Flipped property rules.

Information reporting

Taxpayers, advisors and promoters are subject to enhanced reporting requirements relating to certain transactions entered into after June 21, 2023.

For more information, see Information reporting related to reportable transactions and notifiable transactions.

Return of fuel charge proceeds to farmers tax credit

For 2023, New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island have been added to the list of designated provinces eligible for the return of fuel charge proceeds to farmers tax credit. A self-employed farmer, or an individual who is a member of a partnership that operates a farming business, with one or more permanent establishments in one or more designated provinces may be able to claim the return of fuel charge proceeds to farmers tax credit.

For more information on how to claim this credit, see Return of fuel charge proceeds to farmers tax credit and Line 9951 – Return of fuel charge proceeds to farmers tax credit allocated to you in the year.


Accelerated investment incentive property (AIIP) property that is eligible for an enhanced first-year allowance that is subject to the capital cost allowance (CCA) rules. The property may be eligible if it is acquired after November 20, 2018, and becomes available for use before 2028. For more information on AIIP, go to Accelerated investment incentive.

Arm's length refers to a relationship or a transaction between unrelated persons who act in their own separate interests. An arm's length transaction is generally a transaction that reflects ordinary commercial dealings between parties acting in their own separate interests.

For more information, see Income Tax Folio S1-F5-C1, Related Persons and Dealing at Arm's Length.

"Related persons" are not considered to deal with each other at arm's length. Related persons include individuals connected by blood relationship, marriage, common-law partnership or adoption (legal or in fact). A corporation and another person or two corporations may also be related persons.

For more information, see Income Tax Folio S1-F5-C1, Related Persons and Dealing at Arm's Length.

"Unrelated persons" may not be dealing with each other at arm's length at a particular time. Each case will depend upon its own facts. The following criteria will generally be used to determine if the parties to a transaction are not dealing at arm's length:

For more information, see Income Tax Folio S1-F5-C1, Related Persons and Dealing at Arm's Length.

Available for use generally, the earlier of:

For more information, see Available-for-use rules.

Capital cost generally the taxpayer's full cost of acquiring the property. The capital cost of a property is usually the total of the following:

Capital cost allowance (CCA) you may have acquired depreciable property like a building, furniture or equipment to use in your business. You cannot deduct the initial cost of these properties in the calculation of the net income of the business or professional activities of the year. However, since these properties wear out or become obsolete over time, you can deduct the cost over a period of several years. This deduction is called CCA.

Depreciable property the property on which you can claim CCA. It is usually capital property from a business or property. The capital cost can be written off as CCA over a number of years. You usually group depreciable properties into classes. Diggers, drills and tools that cost $500 or more belong in Class 8. You have to base your CCA claim on the rate assigned to each class of property.

Designated immediate expensing property (DIEP) property that:

Eligible person or partnership (EPOP) one of the following:

Fair market value (FMV) generally, the highest dollar value you can get for your property in an open and unrestricted market between an informed and willing buyer and an informed and willing seller who are dealing at arm's length with each other.

Immediate expensing property property, other than property included in CCA Classes 1 to 6, 14.1, 17, 47, 49 and 51, that:

Motor vehicle an automotive vehicle designed or adapted for use on highways and streets. A motor vehicle does not include a trolley bus or a vehicle designed or adapted to be operated only on rails.

Non-arm's length generally refers to a relationship or transaction between persons who are related to each other.

However, a non-arm's length relationship might also exist between unrelated individuals, partnerships or corporations, depending on the circumstances. For more information, see the definition of Arm's length.

Passenger vehicle a motor vehicle that is owned by the taxpayer (other than a zero-emission vehicle) or that is leased, and is designed or adapted primarily to carry people on highways and streets. It seats a driver and no more than eight passengers. Most cars, station wagons, vans and some pick-up trucks are passenger vehicles.

Passenger vehicles and zero-emission passenger vehicles are subject to limits on the amount of CCA, interest and leasing costs that may be deducted. They do not include:

Proceeds of disposition the amounts you receive, or that we consider you to have received, when you dispose of your property (usually the selling price of the property). Proceeds of disposition is also defined to include, amongst other things, compensation received for property that has been destroyed, expropriated, damaged or stolen.

Undepreciated capital cost (UCC) generally, the amount left after you deduct CCA from the capital cost of a depreciable property. Each year, the CCA you claim reduces the UCC of the property.

Zero-emission passenger vehicle (ZEPV) an automobile that is owned by the taxpayer and is included in Class 54 (but would otherwise be included in Class 10 or 10.1). The rules that apply to the definition of passenger vehicles apply to zero-emission passenger vehicles. A ZEPV does not include a leased passenger vehicle, but other vehicles that would otherwise qualify as a ZEPV if owned by the taxpayer are subject to the same leasing deduction restrictions as passenger vehicles.

Zero-emission vehicle (ZEV) is a motor vehicle that is owned by the taxpayer where all of the following conditions are met:


If the property was acquired after March 1, 2020, it may have been used, but a vehicle that was subject to a prior CCA or terminal loss claim cannot have been acquired by the taxpayer on a tax-deferred "rollover" basis nor previously owned or acquired by the taxpayer or a non-arm's length person or partnership.

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