Personal Services Business
Personal Services Business legislation – An attack on small business
One of APCC’s core issues is combatting the current negative sentiment towards small services businesses, which is manifested in the Canadian government’s Personal Services Business (PSB) legislation and policies.
The Personal Services Business concept defined in section 125(7) of the Income Tax Act. It targets services businesses with 5 or fewer employees and establishes a punitive tax treatment for these organizations that places them at a significant disadvantage to non PSB small businesses and even large multinational corporations.
The core goal of PSB legislation appears to exert pressure on small business entrepreneurs in the services sector via the Income Tax Act space and force them into a traditional employment model.
This thinking is based on several incorrect assumptions, and the APCC is committed towards providing education and outreach to both the government and business community, with the end goal of supporting freedom of organization for Canada’s Independent Contracting and small business community.
APCC has prepared several briefing notes on the PSB issue, for individuals seeking more information.
The APCC believes that true change for small business needs support and improved legislation from the Government. To join our campaign,
1) Call your Member of Parliament.
Members of Parliament gc.ca/Parliamentarians
2) Write to your Member of Parliament.
You can either develop your own message or using one of our templates below.
- Letter 1: PSB legislation is an unfair disadvantage for small business.
- Letter 2: Being declared a small business means my business could be unfairly targeted.
- Letter 3: Current legislation puts firms at a disadvantage of outdated tax policy!
Other ideas for your letter
Beyond APCC's templates, we believe the following list reflects topics on the Personal Service Business (PSB) issue that are a useful starting point for any dialogue.
- Share that you are an Independent Contractor who has chosen to work as a small business versus the traditional employment model. Indicate your concerns with the legislation and how it is affecting you.
- Share that you are an Independent Contractor, and that your decision to be one has nothing to do with tax avoidance. In fact, Canada’s tax system is harmonized through extensive planning under the Theory of Integration. Indicate your concerns with the legislation and how it negatively affects you.
- Summarize your concerns with PSB legislation and issue a challenge as to why the government is targeting Small Businesses in this way.
- Discuss how this legislation puts Small Business at a disadvantage to large, corporate multinationals, as it allows the multinational to claim expenses (such as work-related travel) that PSBs are prevented from claiming.
3) Share a copy with us.