New CRA campaign focuses on Personal Services Businesses

The Personal Services Business (PSB) rules generally apply when these four tests are met:

1. the individual providing services, or a person related to them, is a specified shareholder of the corporation
2. if the individual had provided services directly (i.e., without using a corporation), the individual would be considered an employee of the taxpayer (i.e., an incorporated employee)
3. the corporation does not employ more than five full-time employees throughout the tax year
4. the corporation’s income is from services performed by the provider on the corporation’s behalf