Revenu Québec Infos

To make it easier for corporations to determine whether they qualify for the small business deduction (SBD), the qualification criterion concerning the minimum number of hours worked is being replaced by a qualification criterion concerning the minimum number of hours paid.

The special rules applicable to the qualification criterion based on hours worked are being adapted to take into account the fact that the qualification criterion will now be based on hours paid for a corporation's employees.

More specifically, the following rules will apply:

• A maximum of 40 hours per week per employee will be considered.
• The expenditure relating to hours paid for an employee will have to be incurred for the taxation year covered by the application for the SBD.
• The threshold of 5,500 hours applying to the current year will be based on a full taxation year, and the threshold will be reduced proportionally in the case of a short fiscal period. The proportional reduction will not be applied for the previous year consolidated basis test.
• With respect to the previous year consolidated basis test, the corporation will have to consider the taxation years ended during the calendar year preceding the year during which the corporation's taxation year ends.
• Each corporation in a group of associated corporations will have to count its employees' hours paid. The hours paid for a subcontractor that is acting on behalf of a corporation will not be counted by the corporation, but may be counted by the subcontractor.

Furthermore, a person who holds, directly or indirectly, most of the shares with full voting rights of the capital stock of a corporation will be deemed to have received, from the corporation for a taxation year of the corporation, subject to the above conditions, remuneration corresponding to a conversion factor of 1.1 for each hour the person worked as an active participant in the corporation's activities for the year.

The corporation will have to document the hours worked by a person in these circumstances.

The qualification criterion is replaced as of the coming into effect of the refocusing of the SBD, for taxation years beginning after December 31, 2016.

For more information, see pages A.25 to A.27 of the document entitled Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

To make it easier for corporations to determine whether they qualify for the small business deduction (SBD), the qualification criterion concerning the minimum number of hours worked is being replaced by a qualification criterion concerning the minimum number of hours paid.

The special rules applicable to the qualification criterion based on hours worked are being adapted to take into account the fact that the qualification criterion will now be based on hours paid for a corporation's employees.

More specifically, the following rules will apply:

• A maximum of 40 hours per week per employee will be considered.
• The expenditure relating to hours paid for an employee will have to be incurred for the taxation year covered by the application for the SBD.
• The threshold of 5,500 hours applying to the current year will be based on a full taxation year, and the threshold will be reduced proportionally in the case of a short fiscal period. The proportional reduction will not be applied for the previous year consolidated basis test.
• With respect to the previous year consolidated basis test, the corporation will have to consider the taxation years ended during the calendar year preceding the year during which the corporation's taxation year ends.
• Each corporation in a group of associated corporations will have to count its employees' hours paid. The hours paid for a subcontractor that is acting on behalf of a corporation will not be counted by the corporation, but may be counted by the subcontractor.

Furthermore, a person who holds, directly or indirectly, most of the shares with full voting rights of the capital stock of a corporation will be deemed to have received, from the corporation for a taxation year of the corporation, subject to the above conditions, remuneration corresponding to a conversion factor of 1.1 for each hour the person worked as an active participant in the corporation's activities for the year.

The corporation will have to document the hours worked by a person in these circumstances.

The qualification criterion is replaced as of the coming into effect of the refocusing of the SBD, for taxation years beginning after December 31, 2016.

For more information, see pages A.25 to A.27 of the document entitled Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

An additional capital cost allowance has been introduced for businesses that acquire manufacturing or processing equipment and computer equipment before April 1, 2019.

Qualified property

The additional capital cost allowance applies in respect of property that consists in:

• general-purpose electronic data processing equipment and systems software for that equipment;
• machinery and equipment acquired mainly with a view to using them for manufacturing and processing goods intended for sale or lease.

Qualified property must be put to use within a reasonable time of its acquisition and be used by the taxpayer mainly in the course of carrying on a business during a period of 730 consecutive days following the day it is first put to use. It must also be used mainly in Québec throughout the 730-day period.

Lastly, the property must be new at the time of its acquisition and be acquired by the taxpayer after March 28, 2017, but before April 1, 2019.

Additional capital cost allowance

For a given taxation year, the base amount of the allowance corresponds to 35% of the amount the taxpayer deducted, in calculating the taxpayer's income for the year, as depreciation in respect of the capital cost allowance class to which the taxpayer's qualified property belongs.

The amount that the taxpayer can deduct in calculating income for a taxation year on account of the additional capital cost allowance corresponds to the product of the base amount of the allowance for the year and the fraction of the undepreciated capital cost (UCC) of property of the capital cost allowance class attributable to the qualified property.

For the taxation year in which the qualified property is first put to use, the fraction of UCC attributable to the qualified property corresponds to the proportion represented by the ratio between one half of the acquisition cost of that property and the UCC used in calculating the capital cost allowance for the year.

For the taxation year following the taxation year in which the qualified property is first put to use, the fraction of UCC attributable to the qualified property will correspond to the proportion represented by the ratio between the depreciation balance attributable to the qualified property and the UCC used in calculating the capital cost allowance for the year.

In this respect, the depreciation balance attributable to the qualified property means the amount by which the cost of the qualified property exceeds the part of the capital cost allowance amount that the taxpayer deducted in calculating the previous year's income and that is proportionately attributable to the qualified property.

The taxpayer may have to pay a special tax if the property is not used mainly in Québec throughout the 730-day period.

The changes came into effect on March 28, 2017, and apply to property acquired after this date but before April 1, 2019.

For more information, see pages A.35 to A.37 of the Additional Information 2017-2018 (PDF – 2.71 MB), which is published by the Ministère des Finances.

An additional capital cost allowance has been introduced for businesses that acquire manufacturing or processing equipment and computer equipment before April 1, 2019.

Qualified property

The additional capital cost allowance applies in respect of property that consists in:

• general-purpose electronic data processing equipment and systems software for that equipment;
• machinery and equipment acquired mainly with a view to using them for manufacturing and processing goods intended for sale or lease.

Qualified property must be put to use within a reasonable time of its acquisition and be used by the taxpayer mainly in the course of carrying on a business during a period of 730 consecutive days following the day it is first put to use. It must also be used mainly in Québec throughout the 730-day period.

Lastly, the property must be new at the time of its acquisition and be acquired by the taxpayer after March 28, 2017, but before April 1, 2019.

Additional capital cost allowance

For a given taxation year, the base amount of the allowance corresponds to 35% of the amount the taxpayer deducted, in calculating the taxpayer's income for the year, as depreciation in respect of the capital cost allowance class to which the taxpayer's qualified property belongs.

The amount that the taxpayer can deduct in calculating income for a taxation year on account of the additional capital cost allowance corresponds to the product of the base amount of the allowance for the year and the fraction of the undepreciated capital cost (UCC) of property of the capital cost allowance class attributable to the qualified property.

For the taxation year in which the qualified property is first put to use, the fraction of UCC attributable to the qualified property corresponds to the proportion represented by the ratio between one half of the acquisition cost of that property and the UCC used in calculating the capital cost allowance for the year.

For the taxation year following the taxation year in which the qualified property is first put to use, the fraction of UCC attributable to the qualified property will correspond to the proportion represented by the ratio between the depreciation balance attributable to the qualified property and the UCC used in calculating the capital cost allowance for the year.

In this respect, the depreciation balance attributable to the qualified property means the amount by which the cost of the qualified property exceeds the part of the capital cost allowance amount that the taxpayer deducted in calculating the previous year's income and that is proportionately attributable to the qualified property.

The taxpayer may have to pay a special tax if the property is not used mainly in Québec throughout the 730-day period.

The changes came into effect on March 28, 2017, and apply to property acquired after this date but before April 1, 2019.

For more information, see pages A.35 to A.37 of the Additional Information 2017-2018 (PDF – 2.71 MB), which is published by the Ministère des Finances.

An additional capital cost allowance has been introduced for businesses that acquire manufacturing or processing equipment and computer equipment before April 1, 2019.

Qualified property

The additional capital cost allowance applies in respect of property that consists in:

• general-purpose electronic data processing equipment and systems software for that equipment;
• machinery and equipment acquired mainly with a view to using them for manufacturing and processing goods intended for sale or lease.

Qualified property must be put to use within a reasonable time of its acquisition and be used by the taxpayer mainly in the course of carrying on a business during a period of 730 consecutive days following the day it is first put to use. It must also be used mainly in Québec throughout the 730-day period.

Lastly, the property must be new at the time of its acquisition and be acquired by the taxpayer after March 28, 2017, but before April 1, 2019.

Additional capital cost allowance

For a given taxation year, the base amount of the allowance corresponds to 35% of the amount the taxpayer deducted, in calculating the taxpayer's income for the year, as depreciation in respect of the capital cost allowance class to which the taxpayer's qualified property belongs.

The amount that the taxpayer can deduct in calculating income for a taxation year on account of the additional capital cost allowance corresponds to the product of the base amount of the allowance for the year and the fraction of the undepreciated capital cost (UCC) of property of the capital cost allowance class attributable to the qualified property.

For the taxation year in which the qualified property is first put to use, the fraction of UCC attributable to the qualified property corresponds to the proportion represented by the ratio between one half of the acquisition cost of that property and the UCC used in calculating the capital cost allowance for the year.

For the taxation year following the taxation year in which the qualified property is first put to use, the fraction of UCC attributable to the qualified property will correspond to the proportion represented by the ratio between the depreciation balance attributable to the qualified property and the UCC used in calculating the capital cost allowance for the year.

In this respect, the depreciation balance attributable to the qualified property means the amount by which the cost of the qualified property exceeds the part of the capital cost allowance amount that the taxpayer deducted in calculating the previous year's income and that is proportionately attributable to the qualified property.

The taxpayer may have to pay a special tax if the property is not used mainly in Québec throughout the 730-day period.

The changes came into effect on March 28, 2017, and apply to property acquired after this date but before April 1, 2019.

For more information, see pages A.35 to A.37 of the Additional Information 2017-2018 (PDF – 2.71 MB), which is published by the Ministère des Finances.

An additional capital cost allowance has been introduced for businesses that acquire manufacturing or processing equipment and computer equipment before April 1, 2019.

Qualified property

The additional capital cost allowance applies in respect of property that consists in:

• general-purpose electronic data processing equipment and systems software for that equipment;
• machinery and equipment acquired mainly with a view to using them for manufacturing and processing goods intended for sale or lease.

Qualified property must be put to use within a reasonable time of its acquisition and be used by the taxpayer mainly in the course of carrying on a business during a period of 730 consecutive days following the day it is first put to use. It must also be used mainly in Québec throughout the 730-day period.

Lastly, the property must be new at the time of its acquisition and be acquired by the taxpayer after March 28, 2017, but before April 1, 2019.

Additional capital cost allowance

For a given taxation year, the base amount of the allowance corresponds to 35% of the amount the taxpayer deducted, in calculating the taxpayer's income for the year, as depreciation in respect of the capital cost allowance class to which the taxpayer's qualified property belongs.

The amount that the taxpayer can deduct in calculating income for a taxation year on account of the additional capital cost allowance corresponds to the product of the base amount of the allowance for the year and the fraction of the undepreciated capital cost (UCC) of property of the capital cost allowance class attributable to the qualified property.

For the taxation year in which the qualified property is first put to use, the fraction of UCC attributable to the qualified property corresponds to the proportion represented by the ratio between one half of the acquisition cost of that property and the UCC used in calculating the capital cost allowance for the year.

For the taxation year following the taxation year in which the qualified property is first put to use, the fraction of UCC attributable to the qualified property will correspond to the proportion represented by the ratio between the depreciation balance attributable to the qualified property and the UCC used in calculating the capital cost allowance for the year.

In this respect, the depreciation balance attributable to the qualified property means the amount by which the cost of the qualified property exceeds the part of the capital cost allowance amount that the taxpayer deducted in calculating the previous year's income and that is proportionately attributable to the qualified property.

The taxpayer may have to pay a special tax if the property is not used mainly in Québec throughout the 730-day period.

The changes came into effect on March 28, 2017, and apply to property acquired after this date but before April 1, 2019.

For more information, see pages A.35 to A.37 of the Additional Information 2017-2018 (PDF – 2.71 MB), which is published by the Ministère des Finances.

An additional capital cost allowance has been introduced for businesses that acquire manufacturing or processing equipment and computer equipment before April 1, 2019.

Qualified property

The additional capital cost allowance applies in respect of property that consists in:

• general-purpose electronic data processing equipment and systems software for that equipment;
• machinery and equipment acquired mainly with a view to using them for manufacturing and processing goods intended for sale or lease.

Qualified property must be put to use within a reasonable time of its acquisition and be used by the taxpayer mainly in the course of carrying on a business during a period of 730 consecutive days following the day it is first put to use. It must also be used mainly in Québec throughout the 730-day period.

Lastly, the property must be new at the time of its acquisition and be acquired by the taxpayer after March 28, 2017, but before April 1, 2019.

Additional capital cost allowance

For a given taxation year, the base amount of the allowance corresponds to 35% of the amount the taxpayer deducted, in calculating the taxpayer's income for the year, as depreciation in respect of the capital cost allowance class to which the taxpayer's qualified property belongs.

The amount that the taxpayer can deduct in calculating income for a taxation year on account of the additional capital cost allowance corresponds to the product of the base amount of the allowance for the year and the fraction of the undepreciated capital cost (UCC) of property of the capital cost allowance class attributable to the qualified property.

For the taxation year in which the qualified property is first put to use, the fraction of UCC attributable to the qualified property corresponds to the proportion represented by the ratio between one half of the acquisition cost of that property and the UCC used in calculating the capital cost allowance for the year.

For the taxation year following the taxation year in which the qualified property is first put to use, the fraction of UCC attributable to the qualified property will correspond to the proportion represented by the ratio between the depreciation balance attributable to the qualified property and the UCC used in calculating the capital cost allowance for the year.

In this respect, the depreciation balance attributable to the qualified property means the amount by which the cost of the qualified property exceeds the part of the capital cost allowance amount that the taxpayer deducted in calculating the previous year's income and that is proportionately attributable to the qualified property.

The taxpayer may have to pay a special tax if the property is not used mainly in Québec throughout the 730-day period.

The changes came into effect on March 28, 2017, and apply to property acquired after this date but before April 1, 2019.

For more information, see pages A.35 to A.37 of the Additional Information 2017-2018 (PDF – 2.71 MB), which is published by the Ministère des Finances.

Postponement of the time limit for applying for an initial qualification certificate

To claim the tax holiday (income tax and health services fund contribution) for large investment projects, a corporation must, among other things, file an application for an initial qualification certificate in respect of its investment project before the carrying out of the project begins but no later than November 20, 2017. However, the November 20, 2017, deadline has now been extended to December 31, 2020.

This amendment will apply to large investment projects in relation to which an application for an initial qualification certificate is filed after March 28, 2017.

Introduction of an election enabling an additional phase to be added to a large investment project

A new election has been introduced to allow two large investment projects carried out by a corporation to be considered together. In this context, changes have been made to the tax holiday to reflect this reality and have applied since March 29, 2017.

For more information, see pages A.30 to A.36 of the Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

Postponement of the time limit for applying for an initial qualification certificate

To claim the tax holiday (income tax and health services fund contribution) for large investment projects, a corporation must, among other things, file an application for an initial qualification certificate in respect of its investment project before the carrying out of the project begins but no later than November 20, 2017. However, the November 20, 2017, deadline has now been extended to December 31, 2020.

This amendment will apply to large investment projects in relation to which an application for an initial qualification certificate is filed after March 28, 2017.

Introduction of an election enabling an additional phase to be added to a large investment project

A new election has been introduced to allow two large investment projects carried out by a corporation to be considered together. In this context, changes have been made to the tax holiday to reflect this reality and have applied since March 29, 2017.

For more information, see pages A.30 to A.36 of the Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

Postponement of the time limit for applying for an initial qualification certificate

To claim the tax holiday (income tax and health services fund contribution) for large investment projects, a corporation must, among other things, file an application for an initial qualification certificate in respect of its investment project before the carrying out of the project begins but no later than November 20, 2017. However, the November 20, 2017, deadline has now been extended to December 31, 2020.

This amendment will apply to large investment projects in relation to which an application for an initial qualification certificate is filed after March 28, 2017.

Introduction of an election enabling an additional phase to be added to a large investment project

A new election has been introduced to allow two large investment projects carried out by a corporation to be considered together. In this context, changes have been made to the tax holiday to reflect this reality and have applied since March 29, 2017.

For more information, see pages A.30 to A.36 of the Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

Postponement of the time limit for applying for an initial qualification certificate

To claim the tax holiday (income tax and health services fund contribution) for large investment projects, a corporation must, among other things, file an application for an initial qualification certificate in respect of its investment project before the carrying out of the project begins but no later than November 20, 2017. However, the November 20, 2017, deadline has now been extended to December 31, 2020.

This amendment will apply to large investment projects in relation to which an application for an initial qualification certificate is filed after March 28, 2017.

Introduction of an election enabling an additional phase to be added to a large investment project

A new election has been introduced to allow two large investment projects carried out by a corporation to be considered together. In this context, changes have been made to the tax holiday to reflect this reality and have applied since March 29, 2017.

For more information, see pages A.30 to A.36 of the Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

Postponement of the time limit for applying for an initial qualification certificate

To claim the tax holiday (income tax and health services fund contribution) for large investment projects, a corporation must, among other things, file an application for an initial qualification certificate in respect of its investment project before the carrying out of the project begins but no later than November 20, 2017. However, the November 20, 2017, deadline has now been extended to December 31, 2020. 

This amendment will apply to large investment projects in relation to which an application for an initial qualification certificate is filed after March 28, 2017. 

Introduction of an election enabling an additional phase to be added to a large investment project

A new election has been introduced to allow two large investment projects carried out by a corporation to be considered together. In this context, changes have been made to the tax holiday to reflect this reality and have applied since March 29, 2017. 

For more information, see pages A.30 to A.36 of the Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

The maximum share of Fondaction's net assets that may be allocated to major investments for the purposes of its investment requirement to a particular fiscal year set at 10% of its net assets at the end of the preceding fiscal year must be calculated without taking into account major investments in social economy enterprises, within the meaning of the Social Economy Act.

This change applies to any fiscal year of Fondaction beginning after May 31, 2016.

For more information, see pages A.55 and A.56 of the Additional Information 2017-2018 (PDF – 2.71 MB) published by the Ministère des Finances.

The maximum share of Fondaction's net assets that may be allocated to major investments for the purposes of its investment requirement to a particular fiscal year set at 10% of its net assets at the end of the preceding fiscal year must be calculated without taking into account major investments in social economy enterprises, within the meaning of the Social Economy Act.

This change applies to any fiscal year of Fondaction beginning after May 31, 2016.

For more information, see pages A.55 and A.56 of the Additional Information 2017-2018 (PDF – 2.71 MB) published by the Ministère des Finances.

The maximum share of Fondaction's net assets that may be allocated to major investments for the purposes of its investment requirement to a particular fiscal year set at 10% of its net assets at the end of the preceding fiscal year must be calculated without taking into account major investments in social economy enterprises, within the meaning of the Social Economy Act.

This change applies to any fiscal year of Fondaction beginning after May 31, 2016.

For more information, see pages A.55 and A.56 of the Additional Information 2017-2018 (PDF – 2.71 MB) published by the Ministère des Finances.

The maximum share of Fondaction's net assets that may be allocated to major investments for the purposes of its investment requirement to a particular fiscal year set at 10% of its net assets at the end of the preceding fiscal year must be calculated without taking into account major investments in social economy enterprises, within the meaning of the Social Economy Act.

This change applies to any fiscal year of Fondaction beginning after May 31, 2016.

For more information, see pages A.55 and A.56 of the Additional Information 2017-2018 (PDF – 2.71 MB) published by the Ministère des Finances.

As a rule, Revenu Québec must receive annual GST and QST returns and remittances no later than three months after the end of the reporting period.

The time limit changes, however, for individuals who are GST and QST registrants and

• who earn business income (other than property income) for income tax purposes;
• who have an annual reporting period; and
• whose fiscal year ends on December 31.

Individuals in the situation described above have until June 15 of the following year to file their returns.

Note, however, that they must make remittances of any GST and QST payable no later than April 30.

Important note

This year, individuals have until May 1, 2017, to make remittances of any GST and QST payable, since the usual deadline, April 30, falls on a Sunday.

As a rule, Revenu Québec must receive annual GST and QST returns and remittances no later than three months after the end of the reporting period.

The time limit changes, however, for individuals who are GST and QST registrants and

• who earn business income (other than property income) for income tax purposes;
• who have an annual reporting period; and
• whose fiscal year ends on December 31.

Individuals in the situation described above have until June 15 of the following year to file their returns.

Note, however, that they must make remittances of any GST and QST payable no later than April 30.

Important note

This year, individuals have until May 1, 2017, to make remittances of any GST and QST payable, since the usual deadline, April 30, falls on a Sunday.

As a rule, Revenu Québec must receive annual GST and QST returns and remittances no later than three months after the end of the reporting period.

The time limit changes, however, for individuals who are GST and QST registrants and

• who earn business income (other than property income) for income tax purposes;
• who have an annual reporting period; and
• whose fiscal year ends on December 31.

Individuals in the situation described above have until June 15 of the following year to file their returns.

Note, however, that they must make remittances of any GST and QST payable no later than April 30.

Important note

This year, individuals have until May 1, 2017, to make remittances of any GST and QST payable, since the usual deadline, April 30, falls on a Sunday.

As a rule, Revenu Québec must receive annual GST and QST returns and remittances no later than three months after the end of the reporting period.

The time limit changes, however, for individuals who are GST and QST registrants and

• who earn business income (other than property income) for income tax purposes;
• who have an annual reporting period; and
• whose fiscal year ends on December 31.

Individuals in the situation described above have until June 15 of the following year to file their returns.

Note, however, that they must make remittances of any GST and QST payable no later than April 30.

Important note

This year, individuals have until May 1, 2017, to make remittances of any GST and QST payable, since the usual deadline, April 30, falls on a Sunday.