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New Member
posted Apr 5, 2021 5:21:21 AM

Are loans made to Canadian small businesses tax deductible?

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1 Replies
Level 5
Apr 8, 2021 12:15:19 PM

In most cases, loan payments aren't tax-deductible. When a loan is received by a company, it's not included as taxable income, you are simply paying back the money you borrowed, it is not income spent. If you are paying interest on money borrowed to generate business income, then you can deduct them as business expenses in Line 8760 of your T2125 (Statement of Business and Professional Activities). However, if any Canada Emergency Business Account (CEBA) loans were given, the forgivable portion of the CEBA that is taxable should be considered as taxable income on your tax return.