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Updated: 8 hours 41 min ago

Elimination of the Additional Contribution for Subsidized Educational Childcare

Thu, 11/07/2019 - 17:23

On November 7, 2019, the Minister of Finance of Québec announced the elimination of the additional contribution for subsidized educational childcare for all families as of 2019. As a result, you will no longer receive RL-30 slips.

If you had your income tax withholdings adjusted to help pay your additional contribution when you file your income tax return, the additional amount withheld for 2019 will be used to either reduce your income tax payable or increase your refund, as applicable.

To change the adjustment, complete one of the following forms and give it to your employer:

  • Source Deductions Return (TP-1015.3-V)
  • Request to Have Additional Income Tax Withheld at Source (TP-1017-V)

Tax on Lodging – Mandatory Registration for Digital Accommodation Platform Operators

Tue, 10/15/2019 - 11:25

So that the rules for collecting the tax on lodging better fit the reality of today's digital and sharing economies, Québec's Finance Minister announced new obligations for operators of digital accommodation platforms in the 2019–2020 budget speech delivered on March 21, 2019. Beginning on January 1, 2020, operators of digital accommodation platforms that receive an amount as consideration for the rental of a unit in a sleeping-accommodation establishment that is subject to the tax on lodging must:

  • register for the tax on lodging;
  • collect a 3.5% tax on the price of every overnight stay; and
  • report and remit the tax on lodging they collected in each tourism region by the last day of the month following the end of a calendar quarter.

The operator of a digital accommodation platform is a person who, via the platform:

  • brings together the supplier of an accommodation unit (for example, a hotel) and the recipient (for example, an individual renting a hotel room);
  • provides a framework for interactions between the supplier and the recipient; and
  • manages the financial transactions between the supplier and the recipient.

Note that the tax on lodging currently applies in all of Québec's tourism regions except Nunavik.

For more information, write to Contact-PNH@revenuquebec.ca or call us at 1 833 372-3850 (toll-free in Canada and the U.S.) or 1 819 348-9735 (charges apply).

Businesses that Used Abusive Tax Avoidance Schemes To Be Listed in the RENA

Thu, 09/19/2019 - 12:03

Further to the passage of Bill 37, the Act mainly to establish the Centre d'acquisitions gouvernementales and Infrastructures technologiques Québec, businesses that are imposed a penalty further to a final assessment based on the general anti-avoidance rule (GAAR) as well as the promoters of the transactions in question on whom a GAAR-based penalty has been imposed, will now be listed in the Registre des entreprises non admissibles aux contrats publics (RENA) for five years. The Act respecting contracting by public bodies will be amended to provide that the listing also apply to businesses related to a person that has been imposed a GAAR-based penalty.

Moreover, the penalties imposed will be taken into account by the Autorité des marchés publics when it comes to deciding whether or not to authorize a business to enter into contracts with a public body.

If you make a late preventive disclosure by duly completing and filing the form by the deadline, you will avoid:

  • incurring GAAR-based penalties with respect to the disclosed transaction;
  • being listed in the RENA.

As of now, you can send us a late preventive disclosure form for a transaction or a series of transactions, even though the deadline for making the disclosure under section 1079.8.10 of the Taxation Act has expired, as long as we receive your disclosure within 60 days of the passage of Bill 37. To make a late preventive disclosure, file form TP-1079.DI-V, Mandatory or Preventive Disclosure of Tax Planning, with a letter explaining that the form is being filed as a late preventive disclosure, in accordance with section 44 of Bill 37.

Late preventive disclosures for a transaction or a series of transactions for which a Revenu Québec or a Canada Revenue Agency audit has already begun will not be accepted.

For more information, see Bill 37.

Relief Regarding the Remittance of Source Deductions and Employer Contributions

Mon, 08/26/2019 - 09:34

If you are an employer whose remittance frequency is weekly or twice-monthly, Revenu Québec will accept that you remit the source deductions and employer contributions for the last period of December before January 16 of the following year, without penalty. However, you will have to pay interest, calculated as of the remittance date according to your remittance frequency.

This administrative policy will apply as of 2019. The first remittance covered by this policy will be the one for the last period of December 2019.

Mandatory Disclosure of Nominee Agreements

Thu, 08/22/2019 - 08:50

As stated in information bulletin 2019-5, which was published on May 17, 2019, the parties to a nominee agreement made as part of a transaction or series of transactions have the obligation to disclose it to Revenu Québec by filing an information return.

The return must be filed by:

  • the 90th day following the date the nominee agreement was concluded, if it was concluded on or after May 17, 2019; or
  • September 16, 2019, if the nominee agreement was concluded before May 17, 2019, and the tax consequences of the transaction or series of transactions to which the nominee agreement relates continue on or after May 17, 2019.

For more information, see information bulletin 2019-5.

Filing deadline extension

To maximize compliance with the new obligation, Revenu Québec is extending the deadline for filing the information returns from September 16, 2019, or the 90th day following the conclusion of the nominee agreement, to the later of the following dates:

  • the 90th day following the conclusion of the nominee agreement; or
  • the 90th day following the day the bill introducing the new measures receives assent.

Use of Referees, Scorekeepers and Evening Staff by Sports Centres and Operators of Sports Facilities

Thu, 05/23/2019 - 10:28

If you pay referees, scorekeepers or evening staff (whether self-employed or employees) for sports activities, you may be able to deduct those payments from your income as business expenses.

If the referee, scorekeeper or evening staff member is self-employed, you could be entitled to input tax credits (ITCs) and input tax refunds (ITRs) for taxable services the person provides, if he or she is a registered supplier.

However, if you are the employer of a referee, scorekeeper or evening staff member, you must make source deductions on the person's salary or wages and pay employer contributions. You must also issue your employee an RL-1 slip.

Both the self-employed person and employee must report the income.

For more information on determining whether someone is an employee or self-employed, refer to document IN-301-V, Employee or Self-Employed Person?

E-commerce: Certain Suppliers Outside Québec Required to Collect the QST Beginning September 1, 2019

Tue, 05/14/2019 - 11:03

Beginning September 1, 2019, certain suppliers outside Québec and operators of specified digital platforms that are registered for the GST/HST must register for the QST and collect the QST on certain taxable supplies they make in Québec and remit it to us.

Suppliers outside Québec that are registered for the GST/HST: mandatory QST registration beginning September 1, 2019

These suppliers must collect the QST on taxable supplies of corporeal moveable property, incorporeal moveable property or services they make in Québec to people whose usual place of residence is Québec and who are not registered for the QST.

Registration is mandatory for suppliers that meet the following conditions:

  • They do not have any establishments in Québec, nor do they carry on a business in Québec.
  • They are not currently registered for the QST.
  • They make more than $30,000 per year in supplies of services to consumers in Québec, other than supplies of services and incorporeal movable property made through specified digital platforms.
  • They supply corporeal moveable property, incorporeal moveable property or services to consumers in Québec who are not registered for the QST and whose usual place of residence is in Québec.

Operators of specified digital platforms are subject to similar rules.

Another similar measure, which has been in effect since January 1, 2019, applies to certain suppliers and operators of specified digital platforms that are located outside Canada and are not registered for the GST/HST.

A major step towards ensuring tax fairness!

The taxation of e-commerce currently represents a major challenge for Revenu Québec, in part due to the ever-increasing number of online transactions conducted. The new government measure is therefore entirely consistent with our commitment of taking concrete action to deal with these new taxation challenges and to working actively to ensure tax fairness in all areas.

For more information, go to the Suppliers Outside Québec section of our website.

Limits and Rates Related to the Use of an Automobile for 2019

Wed, 04/10/2019 - 09:00

The limits and rates for the deduction of automobile expenses and the calculation of the taxable benefits related to the use of an automobile for 2019 are as follows:

  • For purposes of capital cost allowance (CCA), the maximum capital cost of passenger vehicles remains unchanged at $30,000 (plus GST and QST) for vehicles purchased after 2018. 
  • The limit on the deduction of leasing costs remains unchanged at $800 per month (plus GST and QST) for leases entered into after 2018. Under a separate restriction, deductible leasing costs are prorated where the value of the passenger vehicle exceeds the maximum capital cost. 
  • The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes increased to 58 cents per kilometre for the first 5,000 kilometres and 52 cents for each additional kilometre. 
  • The limit on the deduction of interest paid on amounts borrowed to purchase a passenger vehicle remains unchanged at $300 per month for loans related to vehicles acquired after 2018. 
  • The prescribed rate used to determine the taxable benefit respecting the portion of operating expenses which relates to an employee's personal use of an automobile provided by the employer has been increased to 28 cents per kilometre. For taxpayers employed principally in selling or leasing automobiles, the prescribed rate has been increased to 25 cents per kilometre.

Repayment of Employment Income an Employer Paid by Mistake in a Previous Year

Wed, 02/27/2019 - 11:37

Employees generally have to repay employers the gross amount of any employment income received by mistake if they repay the amount in a different year than it was received. They also have to recover the excess income tax, Québec Pension Plan (QPP) contributions and Québec parental insurance plan (QPIP) premiums that were deducted from Revenu Québec.

However, effective January 15, 2019, employees can, under certain conditions, repay employers only the net amount of any employment income received by mistake (gross income they received by mistake minus source deductions), even if they repay the amount in a different year than it was received. In this situation, we will reimburse the employer, rather than the employee, any source deductions the employer made on the amount paid by mistake.

Note that employees can, under certain conditions, repay employers the net amount of any employment income received by mistake if they repay the amount in the same year it was received by mistake. For more information, see the Guide to Filing the RL-1 Slip: Employment and Other Income (RL-1.G-V).

Conditions

An employee can repay an employer the net amount of any employment income received by mistake if the following conditions are met:

  • The employment income was received by mistake because of a clerical, administrative or system error.
  • The employment income was received by mistake after 2015.
  • The employer has not yet filed an RL-1 slip for the employee showing the employee's actual employment income (the gross income paid in the year minus the gross income paid by mistake).
  • The employee has repaid the net amount or made an arrangement with the employer to repay the amount by December 31 of the third year after the year in which the employment income was received by mistake.

If these conditions are not met, the employee has to repay the employer the gross amount of any employment income the employee received by mistake in a previous year. For more information, see the RL-1.G-V guide.

Calculating the net amount of employment income paid by mistake in a previous year

The net amount is equal to the employment income paid by mistake in a previous year, minus:

  • Québec income tax withheld on the income paid by mistake (if the employer has made an election);
  • QPP contributions deducted from the income paid by mistake (if the employer has made an election);
  • QPIP premiums deducted from the income paid by mistake (if the employer has made an election).

Employers must make a separate election for each type of deduction made under a Québec law, regardless of their election for each type of deduction under a federal law. They must make the election by December 31 of the third year after the year in which the employment income was paid by mistake.

Instructions for employers

To be refunded source deductions and employer contributions in a situation in which an employee repays the net amount of employment income received by mistake, employers have to:

  • send us an amended RL-1 slip and RL-1 summary for the year in which they paid the amount to the employee by mistake;
  • give the employee an amended RL-1 slip for the year in which they paid the amount by mistake.

The following information must be entered on the amended RL-1 slip: 

  • in the “Code du relevé” box, the letter A;
  • in the “No du dernier relevé transmis” box, the number shown in the upper right-hand corner of the slip being amended;
  • in box A, the actual employment income (the employment income paid in the year, minus the gross income paid by mistake);
  • in boxes G and I, the actual pensionable and eligible salary or wages (that is, the pensionable and eligible salary or wages paid for the year, minus the gross income paid by mistake if this income was subject to QPP contributions and QPIP premiums);
  • in boxes B and H, the total QPP contributions and QPIP premiums withheld at source during the year (including the amounts withheld from the employment income paid by mistake if this income was subject to QPP contributions and QPIP premiums), minus the amounts withheld from the employment income paid by mistake if this income was subject to QPP contributions and QPIP premiums and the employer made the election to be refunded an amount equal to the net income;
  • in box E, the total Québec income tax withheld at source during the year (including the income tax withheld on the employment income paid by mistake), minus the income tax withheld on the employment income paid by mistake if the employer made an election to be refunded an amount equal to the net income;
  • in the other boxes, the amounts from RL-1 slip that has already been filed;
  • the word “Modifié” on copy 2 of the RL-1 slip given to the employee and copy 1 of the RL-1 slip filed with us (if the slip is filed on paper).
Instructions for employees

An employee who repays an employer the net amount of employment income received by mistake in a previous year does not have to recover the excess income tax, QPP contributions and QPIP premiums deducted from Revenu Québec, if the employer made an election to that effect. The employee will have to complete form TP-1.R-V, Request for an Adjustment to an Income Tax Return, to change the income tax return already filed.

E-Commerce: Suppliers Outside Canada Now Collecting QST

Mon, 01/21/2019 - 09:20

One of the measures that the Minister of Finance announced in the 2018–2019 Budget Speech given on March 27, 2018, was the creation of a new Québec sales tax (QST) registration service to ensure tax fairness for suppliers outside Québec and Québec businesses with regard to the collection of the QST.

As a result, foreign suppliers must register for the QST using the new service, and Canadian suppliers will have to follow suit by September 1, 2019. Some digital platforms that act as intermediaries between suppliers and consumers also have to register.

Foreign suppliers: Mandatory registration since January 1, 2019

Registration using the new system is mandatory for suppliers outside Canada that meet the following conditions:

  • They do not have any establishments in Canada, nor do they carry on a business in Canada.
  • They are not currently registered for the QST or the GST/HST.
  • They make more than $30,000 per year in supplies of services or incorporeal movable property in Québec to consumers, other than via certain digital platforms.
Canadian suppliers: Mandatory registration as of September 1, 2019

Registration using the new system will be mandatory for Canadian suppliers outside Québec that meet the following conditions:

  • They do not have any establishments in Québec, nor do they carry on a business in Canada.
  • They are not currently registered for the QST.
  • They are currently registered for the GST/HST.
  • They make more than $30,000 per year in supplies of services or incorporeal movable property in Québec to consumers, other than via certain digital platforms.
A major step toward tax fairness!

With online transactions more prevalent than ever, taxation in the digital economy represents a sizeable challenge for Revenu Québec. This measure is an important step toward our goal of ensuring tax fairness in every field.

To learn more, click Suppliers Outside Québec.

E-Commerce: Suppliers Outside Canada Now Collecting QST

Mon, 01/21/2019 - 09:19

A new measure that came into effect on January 1, 2019, has resulted in new Québec sales tax (QST) obligations for foreign businesses and operators of digital platforms for the distribution of property or services. Since they are now required to collect and remit QST on taxable sales of incorporeal movable property and services to individuals in Québec who are not registered for the QST, they must now charge QST on their online sales.

A major step toward tax fairness!

With online transactions more prevalent than ever, taxation in the digital economy represents a sizeable challenge for Revenu Québec. This measure is an important step toward our goal of ensuring tax fairness in every field.

To learn more, click Suppliers Outside Québec.

Ensuring Tax Fairness in the Digital Economy

Fri, 12/28/2018 - 10:28
Mandatory QST registration for suppliers outside Québec

To ensure tax fairness between suppliers outside Québec and those in Québec with respect to the collection of the Québec sales tax (QST), the Minister of Finance announced, in the 2018-2019 Budget Speech delivered on March 27, 2018, that a new QST registration service would be created.

As a result, suppliers outside Canada must register for the QST using the new service before January 1, 2019. Suppliers in Canada (outside Québec), must do so before September 1, 2019. Note that registration will also be mandatory for certain digital platforms acting as intermediaries between suppliers and consumers.

Suppliers outside Canada: mandatory registration before January 1, 2019

Registration is mandatory for suppliers outside Canada that meet the following conditions:

  • They do not have any establishments in Canada, nor do they operate a business here.
  • They are not already registered for the QST or the GST/HST.
  • The total of certain of their taxable supplies made in Québec to consumers (not including those made over certain digital platforms) exceed $30,000 per year.
  • They supply services and incorporeal moveable property in Québec to people who are not registered for the QST.
Suppliers in Canada (outside Québec): mandatory registration before September 1, 2019

Registration is mandatory for suppliers in Canada (outside Québec) that meet the following conditions:

  • They do not have any establishments in Canada, nor do they operate a business here.
  • They are not already registered for the QST.
  • The total of certain of their taxable supplies made in Québec to consumers (not including those made over certain digital platforms) exceed $30,000 per year.
  • They supply services and incorporeal moveable property in Québec to people who are not registered for the QST.
A key step toward ensuring tax fairness

With online transactions more prevalent than ever, taxation in the digital economy represents a sizeable challenge for Revenu Québec. This measure is an important step toward our goal of ensuring tax fairness in every field.

For more information, click Suppliers Outside Québec.

QPP Maximums, Exemption and Contribution Rates for 2019

Mon, 12/17/2018 - 11:50

The Québec Pension Plan (QPP) maximums and contribution rates have changed for 2019.

The table below shows the QPP maximums, exemption and contribution rates for 2018 and 2019.

2018 2019 Maximum pensionable earnings $55,900 $57,400 Basic exemption $3,500 $3,500 Maximum contributory earnings $52,400 $53,900 Employee and employer 2018 2019 Base contribution rate 5.40% 5.40% First additional contribution rate – 0.15% Contribution rate for the year 5.40% 5.55% Maximum base contribution $2,829.60 $2,910.60 Maximum first additional contribution – $80.85 Maximum annual contribution $2,829.60 $2,991.45 Self-employed person and person responsible for a family-type resource or an intermediate resource 2018 2019 Base contribution rate 10.80% 10.80% First additional contribution rate – 0.30% Contribution rate for the year 10.80% 11.10% Maximum base contribution $5,659.20 $5,821.20 Maximum first additional contribution – $161.70 Maximum annual contribution $5,659.20 $5,982.90

QPIP Maximums, Threshold and Rates for 2019

Thu, 12/13/2018 - 08:19

The Québec parental insurance plan (QPIP) maximums, threshold and rates for 2019 are as follows:

  • The maximum insurable earnings have been increased from $74,000 to $76,500.
  • The qualifying threshold remains $2,000.
  • The employee premium rate has been decreased from 0.548% to 0.526%.
  • The employer premium rate has been decreased from 0.767% to 0.736%.
  • The maximum employee premium has been decreased from $405.52 to $402.39.
  • The maximum employer premium has been decreased from $567.58 to $563.04 per employee.
  • The premium rate for self-employed persons and persons responsible for a family-type resource or an intermediate resource has been decreased from 0.973% to 0.934%.
  • The maximum premium for a self-employed person or a person responsible for a family-type resource or an intermediate resource has been decreased from $720.02 to $714.51.

Capital Cost Allowance

Thu, 12/06/2018 - 09:49
Harmonization with certain measures announced in the Economic Statement of the Department of Finance Canada

On November 21, 2018, the Department of Finance Canada released the 2018 Fall Economic Statement outlining a number of changes to federal tax legislation and regulations.

Subject to the special rules mentioned below with regard to a property that is qualified intellectual property or property that is composed of general-purpose electronic data processing equipment, the Québec tax regulations will be amended to incorporate, with adaptations based on their general principles, the following proposed amendments to the Income Tax Regulations concerning accelerated depreciation:

  • allow taxpayers to write off the full cost of machinery or equipment used in manufacturing or processing for the taxation year in which the property becomes available for use, where such property becomes available for use before 2024, with a gradual reduction afterwards;
  • allow taxpayers to write off the full cost of clean energy generation equipment, for the taxation year in which the property becomes available for use, where such property becomes available for use before 2024, with a gradual reduction afterwards;
  • introduce an accelerated investment incentive, namely, an accelerated capital cost allowance making it possible to claim up to three times the amount that could otherwise be deducted for the taxation year in which the property becomes available for use.
Accelerated depreciation of property that is qualified intellectual property or general-purpose electronic data processing equipment

The proposed changes to the federal tax system regarding accelerated depreciation will be adjusted, for the purposes of Quebec's tax system, so that a taxpayer may deduct, for the taxation year in which the property becomes available for use, the full cost of acquisition of a property that is qualified intellectual property or general-purpose electronic data processing equipment.

Qualified intellectual property means property acquired after December 3, 2018, that is a patent or a right to use patented information, a licence, a permit, know-how, a commercial secret or other similar property constituting knowledge, and that:

  • is property included in Class 14 of Schedule B to the Regulation respecting the Taxation Act, property included in Class 44 of that schedule or property that is incorporeal capital property;
  • is acquired by a taxpayer in the course of a technology transfer or is developed by or on behalf of the taxpayer with a view to enabling the taxpayer to implement an innovation or invention concerning the taxpayer's business;
  • begins to be used within a reasonable time after being acquired or after its development is completed;
  • is used, for the period covering the process of implementing the innovation or invention, only in Québec.

General-purpose electronic data processing equipment is property included in Class 50 of Schedule B to the Regulation respecting the Taxation Act.

For more information, see pages 8 to 11 of Information Bulletin 2018-9 (PDF – 533 KB) published by the Ministère des Finances on December 3, 2018.

Change and elimination of the additional capital cost allowance of 60%

The March 2018 Québec Economic Plan introduced an additional capital cost allowance of 60%.

The tax legislation will be amended to change the amount that a taxpayer may deduct in computing income, on account of the additional capital cost allowance of 60% in respect of qualified property, for the taxation year in which the property becomes available for use, and for the following year. These changes will apply to qualified property acquired after November 20, 2018, but not later than December 3, 2018.

The additional capital cost allowance of 60% was eliminated on December 4, 2018.

For more information, see pages 11 to 15 of Information Bulletin 2018-9 (PDF – 533 KB) published by the Ministère des Finances on December 3, 2018.

Introduction of an additional capital cost allowance of 30%

To encourage continued investment in manufacturing and processing equipment, clean energy generation equipment, general-purpose electronic data processing equipment and certain intellectual property, an additional capital cost allowance of 30% will be introduced. This additional capital cost allowance will be permanent.

The tax legislation will be amended to allow a taxpayer who acquires contemplated property after December 3, 2018, to deduct in computing income from a business for a taxation year, an amount corresponding to 30% of the amount deducted in computing such income, for the previous taxation year, on account of the capital cost allowance for the contemplated property.

Contemplated property is:

  • machinery or equipment used in manufacturing or processing, namely, property included in Class 53 of Schedule B to the Regulation respecting the Taxation Act;
  • clean energy generation equipment, namely, property included in Class 43.1 of the schedule or property included in Class 43.2 of the schedule;
  • property composed of general-purpose electronic data processing equipment and systems software for that equipment, namely, property included in Class 50 of the schedule, other than property that had allowed or could have allowed the taxpayer to claim the additional capital cost allowance of 60%;
  • qualified intellectual property.

For more information, see pages 15 to 16 of Information Bulletin 2018-9 (PDF – 533 KB) published by the Ministère des Finances on December 3, 2018.

Refundable Senior Assistance Tax Credit

Mon, 12/03/2018 - 17:53

A new tax credit has been created to provide assistance for seniors aged 70 or over on December 31, 2018. It is available for 2018 onward, and you can receive it even if you did not claim it in your income tax return.

Eligibility

Generally speaking, you can receive the new tax credit if:

  • you were resident in Québec on December 31; and
  • you or your spouse on December 31 is: 
    • a Canadian citizen,
    • a permanent resident or protected person within the meaning of the Immigration and Refugee Protection Act, or
    • a temporary resident or the holder of a temporary resident permit, within the meaning of the Immigration and Refugee Protection Act, who has been living in Canada for 18 months.
Amount of the tax credit

The maximum for the year is: 

  • $400 if you have a spouse on December 31 and he or she is also eligible;
  • $200 if you have a spouse but only one of you is eligible; or
  • $200 if you do not have a spouse.
 Reduction based on family income

The tax credit is reduced by 5% of the part of your family income that is over:

  • $36,600, if you have a spouse; or
  • $22,500, if you do not have a spouse.

You are not eligible for the tax credit if your family income is: 

  • $44,600 or more, if you have a spouse on December 31 and he or she is also eligible;
  • $40,600 or more, if you have a spouse but only one of you is eligible;
  • $26,500 or more, if you do not have a spouse.

Your family income is the amount on line 275 of your income tax return, plus, if you had a spouse on December 31, the amount on line 275 of his or her return. 

Splitting the tax credit

If you and your spouse on December 31 are both eligible, you can split the tax credit. To do so, you will have to file form TP-1029.SA-V, Senior Assistance Tax credit. Both of you will also have to file an income tax return.

For more information, see pages 5 through 8 of information bulletin 2018-9, published by the Ministère des Finances. 

Self-Assessment of Tax on the Purchase of Carbon Emission Allowances

Thu, 10/25/2018 - 13:55

On June 27, 2018, changes were made to the rules for reporting and paying GST/HST and QST on taxable supplies of carbon emission allowances made in Québec or elsewhere in Canada on a secondary market, such as those traded in cap-and-trade systems.

The changes generally apply only to the secondary market of carbon pollution pricing instruments, where businesses can sell surplus emission allowances to companies that have exceeded their emission targets. The initial supply of emission allowances by a government entity generally remains exempt.

Under the new rules, purchasers of emission allowances must self-assess the GST and QST payable on the purchase and remit them to us. (Under the former rules, the seller of the allowance would collect the GST and QST from the purchaser and remit them.)

Registrants that are entitled to input tax credits (ITCs) and input tax refunds (ITRs) in respect of the taxes payable on the purchase of taxable emission allowances can claim them in their regular GST/HST and QST returns.

The changes do not affect the application of the GST or QST, but simply the manner in which they are collected and remitted to Revenu Québec.

For more information, click Carbon Emission Allowances.

Financial Compensation for Holders of Taxi Owner's Permits — Tax Treatment

Mon, 10/15/2018 - 09:36

In the 2018-2019 Budget Speech delivered on March 27, 2018, the Minister of Finance announced a total of $250 million in financial assistance to compensate holders of taxi owner's permits for the loss in value of their permits.

If you have one or more of these permits, you received (or will receive) an amount of compensation calculated on the basis of the loss in value determined for your taxi servicing area. Since the compensation is considered a form of government assistance for income tax purposes, you will receive an RL-27 slip for it for 2018. The slip will be issued by February 28, 2019.

For more information, see Programme d'aide financière à la modernisation des services de transport par taxi on the Ministère des Transports, de la Mobilité durable et de l'Électrification des transports website (French only).

Tax effects

For tax purposes, taxi owner's permits are considered depreciable property. Since the compensation offsets the loss in your permit's value, it reduces both the capital cost of the permit and the undepreciated capital cost (UCC) for the permit's class of property.

Note that reducing the permit's capital cost may increase your capital gain if you sell the permit. Half of the gain will be taxable in the year of the sale.

Likewise, reducing the UCC will reduce the capital cost allowance (CCA) you can claim in respect of your permit in the future. Also, if the compensation you received is greater than the UCC for the class of property, reducing the UCC may result in CCA recpature at the end of the year you received the compensation.

New Reduction of the Health Service Fund Contribution for SMBs as of 2018

Fri, 08/24/2018 - 09:54

On August 15, 2018, the Minister of Finance announced a new reduction of the health services fund contribution rate.

Increase in total payroll threshold for the reduced contribution rate

For 2018, the total payroll threshold for the reduced health services fund contribution rate will increase from $5 million to $5.5 million. It will then rise gradually from 2019 to 2022 and be indexed annually as of 2023.

Decrease in health services fund contribution rate

If you are an employer other than a public-sector employer and your total payroll is less than $5.5 million, you can qualify for the reduced contribution rate, subject to certain conditions. You must use the contribution rate for your sector of activity to calculate your health services fund contribution for the year. 

See the table below for the health services fund contribution rates for 2018 for each sector of activity.

SMBs in the primary and manufacturing sectors Contribution rate for 2018 Total payroll (TP) Salaries or wages paid before March 28, 2018 Salaries or wages paid between March 28 and August 15, 2018 Salaries or wages paid after August 15, 2018 $1,000,000 or less 1.50% 1.45% 1.25% $1,000,001 to $5,499,999 0.8867% + (0.6133% x TP/1,000,000) 0.8256% + (0.6244% x TP/1,000,000) 0.5811% + (0.6689% x TP/1,000,000) $5,500,000 or more 4.26% 4.26% 4.26% SMBs in the service and construction sectors Contribution rate for 2018 Total payroll (TP) Salaries or wages paid before March 28, 2018 Salaries or wages paid between March 28 and August 15, 2018 Salaries or wages paid after August 15, 2018 $1,000,000 or less 2.30% 1.95% 1.75% $1,000,001 to $5,499,999 1.8644% + (0.4356% x TP/1,000,000) 1.4367% + (0.5133% x TP/1,000,000) 1.1922% + (0.5578% x TP/1,000,000) $5,500,000 or more 4.26% 4.26% 4.26%

If you stop carrying on a business or making payments in the year, you must calculate your health services fund contribution rate for 2018 as shown in the example below.

Example You are an employer in the primary and manufacturing sectors and you stop carrying on your business on August 29, 2018. Your total payroll for the period from January 1 to August 29, 2018, is less than $1 million. Salaries or wages paid before March 28, 2018 Salaries or wages paid between March 28 and August 15, 2018 Salaries or wages paid after August 15, 2018 Salaries or wages subject to the contribution $600,000 $300,000 $50,000 Contribution rate 1.50% 1.45% 1.25% Contribution to the health services fund $9,000 $4,350 $625 Contribution for the period from January 1 to August 29, 2018: $9,000 + $4,350 + $625 $13,975 Keep your calculations in case we ask for them. Reduction of the health services fund contribution for the creation of specialized jobs 

Form LE-34.1.12-V, Reduction of the Contribution to the Health Services Fund: Creation of Specialized Jobs, will be updated to incorporate the new rates for 2018. In addition, the denominator in the fraction used in the formula to determine your reduction rate if your total payroll is over $1 million has increased from $4 million to $4.5 million. 

Periodic payments of the health services fund contribution

Your periodic payments after August 15, 2018, may be adjusted to take into account the total payroll threshold increase for 2018. 

Reduction of the Health Services Fund Contribution Rate for SMBs

Fri, 07/13/2018 - 09:28

In the Budget Speech of March 27, 2018, the Minister of Finance of Québec announced a new plan to gradually reduce the health services fund contribution rate between 2018 and 2022. In addition, the total payroll threshold for the reduced contribution rate will be increased between 2019 and 2022 and then indexed annually as of 2023.

For 2018, if you are an employer other than a public-sector employer and your total payroll is less than $5 million, you can qualify for the reduced contribution rate, subject to certain conditions. You must use the contribution rate for your sector of activity to calculate your health services fund contribution for the year.  

See the table below for the health services fund contribution rates for 2018 for each sector of activity.

SMBs in the primary and manufacturing sectors Contribution rate for 2018 Total payroll (TP) Salaries or wages paid before March 28, 2018 Salaries or wages paid after March 27, 2018 $1,000,000 or less 1.50% 1.45% Entre $1,000,001 to $4,999,999 0.81% + (0.69% × TP/1,000,000) 0.7475% + (0.7025% × TP/1,000,000) $5,000,000 or more 4.26% 4.26% SMBs in the service and construction sectors Contribution rate for 2018 Total payroll (TP) Salaries or wages paid before March 28, 2018 Salaries or wages paid after March 27, 2018 $1,000,000 or less 2.30% 1.95% Entre $1,000,001 to $4,999,999 1.81% + (0.49% × TP/1,000,000) 1.3725% + (0.5775% × TP/1,000,000) $5,000,000 or more 4.26% 4.26%

If you stop carrying on a business or making payments in the year, you must calculate your health services fund contribution rate for 2018 as shown in the example below.

Example

You are an employer in the primary and manufacturing sectors and you stop carrying on your business on June 29, 2018. Your total payroll for the period from January 1 to June 29, 2018, is less than $1 million.

Salaries or wages paid before March 28, 2018 Salaries or wages paid after March 27, 2018 Keep your calculations in case we ask for them. Salaries or wages subject to the contribution $600,000 $300,000 Contribution rate 1.50% 1.45% Contribution to the health services fund $9,000 $4,350 Contribution for the period from January 1 to June 29, 2018: $9,000 + $4,350 $13,350

Form LE-34.1.12-V, Reduction of the Contribution to the Health Services Fund: Creation of Specialized Jobs, will be updated to incorporate the new rates for 2018.

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