Incorporated for Tax Savings, Reassessed as an Employee -4163931 Canada inc

Описание: This video breaks down a real Quebec court case involving a nurse who provided services through a corporation and how the courts analyzed whether that corporation was carrying on a Personal Services Business.

In 4163931 Canada Inc. v. Agence du revenu du Québec (2024 QCCQ 4106), the Court reviewed the working arrangement between a nurse, placement agencies, and hospitals during the 2011–2013 tax years. The key issue was whether the corporation operated an active business or functioned as a Personal Services Business under tax law.

The Court focused on the practical reality of the work:

Nursing duties matched those of hospital-employed nurses

Work occurred under hospital supervision and clinical protocols

Compensation followed a fixed hourly rate through placement agencies

Financial risk and profit variability were limited

Integration into hospital operations resembled an employment relationship

Based on these factors, the Court concluded that the corporation was carrying on a Personal Services Business. As a result, expense deductions were restricted and additional tax consequences followed.

This case highlights how incorporation alone does not determine tax outcomes. Control, integration, and economic reality remain central in how tax authorities assess professional service arrangements.

Case link:
https://canlii.ca/t/k6q33

CRA reference – Personal Services Business:
https://www.canada.ca/en/revenue-agen...

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Disclaimer

This video is shared for general educational purposes only. It summarizes a publicly available court decision and does not constitute legal or tax advice. Tax outcomes depend on individual facts and circumstances.