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International FAQ #32 – What Is A Schedule 97?



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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.

Discussion:

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 (see FAQ #127) and is required to complete Schedule 91 (see International FAQ #31).
  • 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 (see International FAQ #18).
  • 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 (to be covered in a future FAQ).

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.

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To learn more about how to report your non-resident corporation’s business income in Canada, contact us.

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Grant has been in the CA business since 1988, starting his own practice in 1994. His tax expertise encompasses tax planning, international tax issues, and Scientific Research and Development tax credits. He is a graduate of the CICA In-Depth Tax Course and in 2012, Grant received the CA Community Service Award and the Scout Leader Medal.

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