What is a schedule 97 as part of a T2 corporate tax return?
Schedule 97 is an additional information schedule for non-resident corporations that must file a Canadian tax return.
This schedule reports the type of income earned in Canada by the non-resident corporation.
There are two parts to this schedule. The first part requires the non-resident to identify which country it was incorporated in.
The second part lists 12 types of income earned. Only one type can be selected. Some of the types listed are:
- Treaty-based exempt corporation: This relates to corporations that carried on business in Canada but did not have a permanent establishment and is required to complete Schedule 91.
- Section 216: This relates to real property rental income. The non-resident corporation has elected to file a tax return in order to pay taxes on the net rental income instead of taxes on the gross rental income received.
- Canadian branch: If a corporation earned income from a business carried on in Canada and had a permanent establishment in Canada, it is considered to have a branch in Canada and pay a ‘branch’ tax.
This schedule is helpful in determining what additional tax schedules may be required and what sections of the tax may be applicable as the schedule provides detailed information.
Angela Hardbattle, Dipl. T (Hons), CPA, CA
Manager, Gilmour Group CPA’s
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