Revenu Québec Infos

To recognize the involvement of individuals who help care for a relative with a severe impairment and with whom they do not live, a new component will be added to the tax credit for caregivers as of the 2018 taxation year.

This refundable tax credit will now comprise four components. The fourth component will apply to caregivers who regularly and continuously help a relative who they neither house nor co-reside with.

Individual eligible for the new component of the tax credit

An individual will be able to claim a refundable tax credit of up to $533 for each relative, provided:

• the individual is resident in Québec at the end of the year for which the tax credit is claimed (or, if the individual dies in the year, on the date of his or her death); and
• the relative is considered an eligible relative throughout the required minimum period of support for the particular year (see below).

However, an individual will not be able to claim the tax credit for a particular taxation year if he or she is a dependant of another person for that year.

Amount of the tax credit

Under the new component, an individual can claim a maximum of $533 for each eligible relative. This amount will be reduced at a rate of 16% for each dollar that the eligible relative's income for the year for which the tax credit is claimed exceeds $23,700.

Apart from the reduction rate, the various parameters of the new component will be automatically adjusted each year as of the 2019 taxation year.

Eligible relatives

For the purposes of the new component, a person will be considered an eligible relative of an individual for a minimum period of support provided to the person by the individual for a year, if, throughout that period, the person meets the following conditions:

• the person's principal place of residence is situated in Québec;
• the person is either the child, grandson, granddaughter, nephew, niece, brother, sister, father, mother, uncle, aunt, grandfather, grandmother, great-uncle or great-aunt of the individual or of the individual's spouse, or another direct ascendant of the individual or of the individual's spouse;
• the person does not live in a dwelling situated in a private seniors' residence or in a public network facility;
• the person has a severe and prolonged impairment because of which, according to the certificate from a physician, the person needs assistance in carrying out a basic activity of daily living.

Minimum period of support

The minimum period of support provided to a person by an individual for a particular taxation year will correspond to a period of at least 365 consecutive days commencing in the year or in the preceding year, of which at least 183 are in the particular year during which the individual provided unremunerated regular, continuous assistance to the relative. The assistance must have helped the relative carry out a basic activity of daily living.

NoteEffective March 27, 2018, nurse practitioners are authorized, for the purposes of the refundable tax credit for caregivers, to issue certifications confirming that an eligible relative is unable to live alone or needs assistance in carrying out a basic activity of daily living because of a severe and prolonged impairment in his or her physical or mental functions.

For more information, see pages A.27 and A.33 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

A non-refundable tax credit for first-time home buyers has been introduced for the 2018 taxation year.

Qualifying home

A qualifying home of an individual is a housing unit located in Québec that was acquired at a particular time after December 31, 2017, by:

• the individual or the individual's spouse, where the individual intends to inhabit the home as a principal place of residence not later than one year after the particular time and it is the individual's first housing unit;
• the individual, where the individual intends that the home be inhabited by a specified disabled person as a principal place of residence not later than one year after the particular time, and the housing unit was acquired by the individual for the specified disabled person to live in:
  • a home that is more accessible by the specified disabled person or in which the specified disabled person is more mobile or functional, or
  • an environment better suited to the specified disabled person's personal needs and care.

NoteA housing unit is an individual house that is detached, semi-detached or a row house, a manufactured home or mobile home, an apartment in an immovable under divided co-ownership (condominium) or an apartment in a multiple-unit residential complex.

A housing unit is a first housing unit if the following conditions are met:

• The individual did not own, whether alone or jointly, a housing unit that was occupied by the individual in the particular period that began at the beginning of the fourth preceding calendar year that ended before the acquisition of the housing unit and that ended on the day before the acquisition of the housing unit;
• In the particular period, the individual's spouse did not own, whether alone or jointly, a housing unit inhabited by the individual during their marriage (or during their civil or de facto union).

A specified disabled person is, at a particular time:

• the individual or a person who is related to the individual at the particular time;
• a person who is eligible for the tax credit for a severe and prolonged impairment in mental or physical functions for the taxation year that includes the particular time;
• a person who would have been eligible for the tax credit if no individual had included, in the calculation of the non-refundable tax credit for medical expenses for the year, an amount in respect of remuneration for an attendant or care in a nursing home in respect of the person; or
• a person in respect of whom the supplement for handicapped children is paid for the month that includes the particular time.

Calculation of the tax credit

The tax credit is calculated by multiplying the rate for the first taxable income bracket of the personal income tax table for the year (which is currently 15%) by $5,000. Thus, the maximum value of the tax credit that an individual can deduct from his or her income tax payable for the year is $750.

To claim the tax credit, an individual must meet the following conditions:

• The individual is not a trust.
• The individual is resident in Québec at the end of a taxation year (or, if the individual dies in the year, on the date of the individual's death).
• The qualifying home was acquired in the year.

If, for a taxation year, more than one individual may claim the first-time home buyers' tax credit in respect of a qualifying home, the total of the amounts that each of these individuals may claim, in the calculation of the tax otherwise payable by each of them for the year, may not exceed the amount that would be allowed if only one of them were eligible for the tax credit for the year.

For more information, see pages A.15 to A.19 of Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

A non-refundable tax credit for first-time home buyers has been introduced for the 2018 taxation year.

Qualifying home

A qualifying home of an individual is a housing unit located in Québec that was acquired at a particular time after December 31, 2017, by:

• the individual or the individual's spouse, where the individual intends to inhabit the home as a principal place of residence not later than one year after the particular time and it is the individual's first housing unit;
• the individual, where the individual intends that the home be inhabited by a specified disabled person as a principal place of residence not later than one year after the particular time, and the housing unit was acquired by the individual for the specified disabled person to live in:
  • a home that is more accessible by the specified disabled person or in which the specified disabled person is more mobile or functional, or
  • an environment better suited to the specified disabled person's personal needs and care.

NoteA housing unit is an individual house that is detached, semi-detached or a row house, a manufactured home or mobile home, an apartment in an immovable under divided co-ownership (condominium) or an apartment in a multiple-unit residential complex.

A housing unit is a first housing unit if the following conditions are met:

• The individual did not own, whether alone or jointly, a housing unit that was occupied by the individual in the particular period that began at the beginning of the fourth preceding calendar year that ended before the acquisition of the housing unit and that ended on the day before the acquisition of the housing unit;
• In the particular period, the individual's spouse did not own, whether alone or jointly, a housing unit inhabited by the individual during their marriage (or during their civil or de facto union).

A specified disabled person is, at a particular time:

• the individual or a person who is related to the individual at the particular time;
• a person who is eligible for the tax credit for a severe and prolonged impairment in mental or physical functions for the taxation year that includes the particular time;
• a person who would have been eligible for the tax credit if no individual had included, in the calculation of the non-refundable tax credit for medical expenses for the year, an amount in respect of remuneration for an attendant or care in a nursing home in respect of the person; or
• a person in respect of whom the supplement for handicapped children is paid for the month that includes the particular time.

Calculation of the tax credit

The tax credit is calculated by multiplying the rate for the first taxable income bracket of the personal income tax table for the year (which is currently 15%) by $5,000. Thus, the maximum value of the tax credit that an individual can deduct from his or her income tax payable for the year is $750.

To claim the tax credit, an individual must meet the following conditions:

• The individual is not a trust.
• The individual is resident in Québec at the end of a taxation year (or, if the individual dies in the year, on the date of the individual's death).
• The qualifying home was acquired in the year.

If, for a taxation year, more than one individual may claim the first-time home buyers' tax credit in respect of a qualifying home, the total of the amounts that each of these individuals may claim, in the calculation of the tax otherwise payable by each of them for the year, may not exceed the amount that would be allowed if only one of them were eligible for the tax credit for the year.

For more information, see pages A.15 to A.19 of Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

To encourage employers to offer more training periods to Aboriginal people and, consequently, increase their participation in the labour market, the rate of the refundable tax credit for on-the-job training periods has been raised in respect of such trainees.

In addition, both the weekly qualified expenditure limit and the maximum hourly rate have been increased for all existing categories of eligible trainees for the purposes of this tax credit.

Lastly, to encourage employers to offer more training periods in resource regions, the rate of the tax credit has been increased for qualified training periods in these regions.

Aboriginal trainees

Tax legislation will be amended so that a rate of 32% for corporations and 16% for individuals applies where an eligible employer makes a qualified expenditure in respect of an eligible trainee who is an Aboriginal person.

In addition, tax legislation will be amended so that an Aboriginal person means a person who is, at any given time during an eligible training period:

• an Indian registered pursuant to the Indian Act; or
• an Inuit beneficiary pursuant to the Act respecting Cree, Inuit and Naskapi native persons.

Lastly, tax legislation will be amended to raise the rates as follows, where an eligible employer makes a qualified expenditure in respect of a trainee who is an Aboriginal person enrolled in an education program or a prescribed program:

• from 32% to 50% for corporations;
• from 16% to 25% for individuals.

However, for a taxation year, an eligible employer may benefit from the higher rates in respect of a trainee who is an Aboriginal person enrolled in an education program or a prescribed program, only if the eligible employer's qualified expenditure in respect of such a trainee is at least $2,500 for at least three consecutive taxation years or, in the case of a partnership, for at least three consecutive fiscal periods.

Increase in the weekly limit and the maximum hourly rate

The weekly limit will be raised to:

• $875 per week for eligible trainees enrolled in a prescribed program, or disabled eligible trainees who are apprentice trainees or trainees enrolled in an education program;
• $1,225 per week for disabled eligible trainees enrolled in a prescribed program;
• $700 per week in the case of all other eligible trainees.

Accordingly, tax legislation will be amended to increase the hourly rates from $18 to $21 for an eligible trainee and from $30 to $35 for an eligible supervisor.

Increase respecting resource regions

Tax legislation will be amended so that a rate of 32% for corporations and 16% for individuals applies where an eligible employer makes a qualified expenditure in respect of an eligible trainee who serves an eligible training period in an establishment, of the eligible employer, located in an eligible region.

Tax legislation will also be amended to raise as follows the rates of the tax credit in respect of an eligible trainee enrolled in an education program or a prescribed program who serves an eligible training period, in an establishment, of an eligible employer, located in an eligible region:

• from 32% to 50% for corporations;
• from 16% to 25% for individuals.

However, for a taxation year, an eligible employer may benefit from the higher rates in respect of a trainee enrolled in an education program or a prescribed program, only if the eligible employer's qualified expenditure in respect of such a trainee is at least $2,500 for at least three consecutive taxation years or, in the case of a partnership, for at least three consecutive fiscal periods.

For the purposes of this amendment, the following resource regions are considered eligible regions:

• the administrative regions described in the Décret concernant la révision des limites des régions administratives du Québec:
  • administrative region 01 Bas-Saint-Laurent,
  • administrative region 02 Saguenay–Lac-Saint-Jean,
  • administrative region 08 Abitibi-Témiscamingue,
  • administrative region 09 Côte-Nord,
  • administrative region 10 Nord-du-Québec,
  • administrative region 11 Gaspésie–Îles-de-la-Madeleine;
• the following regional county municipalities:
  • Municipalité régionale de comté d'Antoine-Labelle,
  • Municipalité régionale de comté de La Vallée-de-la-Gatineau,
  • Municipalité régionale de comté de Mékinac,
  • Municipalité régionale de comté de Pontiac;
• the urban agglomeration of La Tuque, as described in section 8 of the Act respecting the exercise of certain municipal powers in certain urban agglomerations.

Application date

These changes will apply to qualified expenditures incurred after March 27, 2018, in respect of eligible training periods beginning after that date.

For more information, see pages A.69 and A.74 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

To encourage employers to offer more training periods to Aboriginal people and, consequently, increase their participation in the labour market, the rate of the refundable tax credit for on-the-job training periods has been raised in respect of such trainees.

In addition, both the weekly qualified expenditure limit and the maximum hourly rate have been increased for all existing categories of eligible trainees for the purposes of this tax credit.

Lastly, to encourage employers to offer more training periods in resource regions, the rate of the tax credit has been increased for qualified training periods in these regions.

Aboriginal trainees

Tax legislation will be amended so that a rate of 32% for corporations and 16% for individuals applies where an eligible employer makes a qualified expenditure in respect of an eligible trainee who is an Aboriginal person.

In addition, tax legislation will be amended so that an Aboriginal person means a person who is, at any given time during an eligible training period:

• an Indian registered pursuant to the Indian Act; or
• an Inuit beneficiary pursuant to the Act respecting Cree, Inuit and Naskapi native persons.

Lastly, tax legislation will be amended to raise the rates as follows, where an eligible employer makes a qualified expenditure in respect of a trainee who is an Aboriginal person enrolled in an education program or a prescribed program:

• from 32% to 50% for corporations;
• from 16% to 25% for individuals.

However, for a taxation year, an eligible employer may benefit from the higher rates in respect of a trainee who is an Aboriginal person enrolled in an education program or a prescribed program, only if the eligible employer's qualified expenditure in respect of such a trainee is at least $2,500 for at least three consecutive taxation years or, in the case of a partnership, for at least three consecutive fiscal periods.

Increase in the weekly limit and the maximum hourly rate

The weekly limit will be raised to:

• $875 per week for eligible trainees enrolled in a prescribed program, or disabled eligible trainees who are apprentice trainees or trainees enrolled in an education program;
• $1,225 per week for disabled eligible trainees enrolled in a prescribed program;
• $700 per week in the case of all other eligible trainees.

Accordingly, tax legislation will be amended to increase the hourly rates from $18 to $21 for an eligible trainee and from $30 to $35 for an eligible supervisor.

Increase respecting resource regions

Tax legislation will be amended so that a rate of 32% for corporations and 16% for individuals applies where an eligible employer makes a qualified expenditure in respect of an eligible trainee who serves an eligible training period in an establishment, of the eligible employer, located in an eligible region.

Tax legislation will also be amended to raise as follows the rates of the tax credit in respect of an eligible trainee enrolled in an education program or a prescribed program who serves an eligible training period, in an establishment, of an eligible employer, located in an eligible region:

• from 32% to 50% for corporations;
• from 16% to 25% for individuals.

However, for a taxation year, an eligible employer may benefit from the higher rates in respect of a trainee enrolled in an education program or a prescribed program, only if the eligible employer's qualified expenditure in respect of such a trainee is at least $2,500 for at least three consecutive taxation years or, in the case of a partnership, for at least three consecutive fiscal periods.

For the purposes of this amendment, the following resource regions are considered eligible regions:

• the administrative regions described in the Décret concernant la révision des limites des régions administratives du Québec:
  • administrative region 01 Bas-Saint-Laurent,
  • administrative region 02 Saguenay–Lac-Saint-Jean,
  • administrative region 08 Abitibi-Témiscamingue,
  • administrative region 09 Côte-Nord,
  • administrative region 10 Nord-du-Québec,
  • administrative region 11 Gaspésie–Îles-de-la-Madeleine;
• the following regional county municipalities:
  • Municipalité régionale de comté d'Antoine-Labelle,
  • Municipalité régionale de comté de La Vallée-de-la-Gatineau,
  • Municipalité régionale de comté de Mékinac,
  • Municipalité régionale de comté de Pontiac;
• the urban agglomeration of La Tuque, as described in section 8 of the Act respecting the exercise of certain municipal powers in certain urban agglomerations.

Application date

These changes will apply to qualified expenditures incurred after March 27, 2018, in respect of eligible training periods beginning after that date.

For more information, see pages A.69 and A.74 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

As of the 2018 taxation year, the independent living tax credit for seniors will enable more seniors to obtain items needed to maximize their independence and ensure their safety. Accordingly, the threshold at which the tax credit may be claimed in respect of expenses paid for qualified property has been reduced to $250 and the list of qualified property expanded.

The tax credit will be equal to 20% of the amount that exceeds $250 after the total of the amounts paid for the acquisition or rental, including installation costs, of qualified property intended for use in the individual's principal place of residence has been calculated. The amount must have been paid in the year by an individual or by the person who is the individual's spouse at the time of payment.

The following items have been added to the list of qualified property:

• alert systems for individuals with hearing impairments
• hearing aids
• walkers
• rollators
• canes
• crutches
• non-motorized wheelchairs

For more information, see pages A.36 to A.38 of Additional Information 2018–2019 (PDF – 3.73 MB) published by the Ministère des Finances.

As of the 2018 taxation year, the independent living tax credit for seniors will enable more seniors to obtain items needed to maximize their independence and ensure their safety. Accordingly, the threshold at which the tax credit may be claimed in respect of expenses paid for qualified property has been reduced to $250 and the list of qualified property expanded.

The tax credit will be equal to 20% of the amount that exceeds $250 after the total of the amounts paid for the acquisition or rental, including installation costs, of qualified property intended for use in the individual's principal place of residence has been calculated. The amount must have been paid in the year by an individual or by the person who is the individual's spouse at the time of payment.

The following items have been added to the list of qualified property:

• alert systems for individuals with hearing impairments
• hearing aids
• walkers
• rollators
• canes
• crutches
• non-motorized wheelchairs

For more information, see pages A.36 to A.38 of Additional Information 2018–2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Salary overpayments occur when, because of a clerical, administrative or computer error, an employer pays an employee salary to which he or she was not entitled. To make things easier for both employers and employees, we have harmonized our administrative policy on the repayment of salary overpayments with that of the Canada Revenue Agency.

Under our new policy, salary overpayments can be repaid based on the employee's net salary (gross salary overpaid minus source deductions) if the following conditions are met:

• The overpayment is repaid in the calendar year in which the error occurred.
• The employer is able to subtract the overpaid source deductions and employer contributions from its next remittance to Revenu Québec, and the remittance is made for the calendar year in question.

If either condition is not met, the new policy does not apply. The employee must then repay the gross salary overpaid, and the employer must remit the related source deductions and employer contributions. 

The Guide to Filing the RL-1 Slip: Employment and Other Income (RL-1.G-V) will be updated at a later date to reflect the changes.

Salary overpayments occur when, because of a clerical, administrative or computer error, an employer pays an employee salary to which he or she was not entitled. To make things easier for both employers and employees, we have harmonized our administrative policy on the repayment of salary overpayments with that of the Canada Revenue Agency.

Under our new policy, salary overpayments can be repaid based on the employee's net salary (gross salary overpaid minus source deductions) if the following conditions are met:

• The overpayment is repaid in the calendar year in which the error occurred.
• The employer is able to subtract the overpaid source deductions and employer contributions from its next remittance to Revenu Québec, and the remittance is made for the calendar year in question.

If either condition is not met, the new policy does not apply. The employee must then repay the gross salary overpaid, and the employer must remit the related source deductions and employer contributions. 

The Guide to Filing the RL-1 Slip: Employment and Other Income (RL-1.G-V) will be updated at a later date to reflect the changes.

Salary overpayments occur when, because of a clerical, administrative or computer error, an employer pays an employee salary to which he or she was not entitled. To make things easier for both employers and employees, we have harmonized our administrative policy on the repayment of salary overpayments with that of the Canada Revenue Agency.

Under our new policy, salary overpayments can be repaid based on the employee's net salary (gross salary overpaid minus source deductions) if the following conditions are met:

• The overpayment is repaid in the calendar year in which the error occurred.
• The employer is able to subtract the overpaid source deductions and employer contributions from its next remittance to Revenu Québec, and the remittance is made for the calendar year in question.

If either condition is not met, the new policy does not apply. The employee must then repay the gross salary overpaid, and the employer must remit the related source deductions and employer contributions. 

The Guide to Filing the RL-1 Slip: Employment and Other Income (RL-1.G-V) will be updated at a later date to reflect the changes.

To take the reality of the mining industry into account and protect the environment, social acceptability and transparency, the Mining Tax Act will be amended in order to introduce an environmental studies allowance.

Environmental studies allowance

The environmental studies allowance will be similar to the allowance for community consultations.

Thus, an operator may deduct, in calculating its annual profit for a fiscal year, an amount on account of the environmental studies allowance that may not exceed the balance of its cumulative environmental studies expenses account at the end of the fiscal year.

The balance of the cumulative environmental studies expenses account of an operator at the end of a fiscal year corresponds to the amount by which the aggregate of the amounts each of which represents 50% of environmental studies expenses incurred by the operator in the fiscal year or a preceding fiscal year, but after March 27, 2018, exceeds the aggregate of the amounts on account of the environmental studies allowance deducted in the calculation of the operator's annual profit for a preceding fiscal year.
 

Environmental studies expenses, for the purposes of calculating the allowance, includes expenses of the same nature as the environmental studies expenses included in the cumulative exploration expenses of an operator.

Refundable duties credit for losses

Changes have been made to the refundable duties credit for losses of an operator based on the introduction of the environmental studies allowance.

Consequently, the refundable duties credit for losses that an operator may claim for a fiscal year ending after March 27, 2018, may not exceed 16% of the lesser of the following amounts:

• its adjusted annual loss for the fiscal year; and
• the amount equal to the total of:
  • the amount corresponding to the pre-production development expenses it incurred for the fiscal year that does not exceed the amount it deducted for the fiscal year as an pre-production development allowance,
  • the amount corresponding to community consultation expenses it incurred for the fiscal year that does not exceed the amount it deducted for the fiscal year as an allowance for community consultations,
  • the amount corresponding to the environmental studies expenses it incurred for the fiscal year that does not exceed the amount it deducted for the fiscal year as an environmental studies allowance, and
  • if the operator is an eligible operator for the fiscal year, 50% of the amount corresponding to the exploration expenses it incurred for the fiscal year that does not exceed the amount it deducted for the fiscal year as an exploration allowance.

Application date

These changes will apply to a fiscal year of an operator that ends after March 27, 2018, in respect of environmental studies expenses incurred after that day.

For more information, see pages A.124 to A.127 of Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

To take the reality of the mining industry into account and protect the environment, social acceptability and transparency, the Mining Tax Act will be amended in order to introduce an environmental studies allowance.

Environmental studies allowance

The environmental studies allowance will be similar to the allowance for community consultations.

Thus, an operator may deduct, in calculating its annual profit for a fiscal year, an amount on account of the environmental studies allowance that may not exceed the balance of its cumulative environmental studies expenses account at the end of the fiscal year.

The balance of the cumulative environmental studies expenses account of an operator at the end of a fiscal year corresponds to the amount by which the aggregate of the amounts each of which represents 50% of environmental studies expenses incurred by the operator in the fiscal year or a preceding fiscal year, but after March 27, 2018, exceeds the aggregate of the amounts on account of the environmental studies allowance deducted in the calculation of the operator's annual profit for a preceding fiscal year.
 

Environmental studies expenses, for the purposes of calculating the allowance, includes expenses of the same nature as the environmental studies expenses included in the cumulative exploration expenses of an operator.

Refundable duties credit for losses

Changes have been made to the refundable duties credit for losses of an operator based on the introduction of the environmental studies allowance.

Consequently, the refundable duties credit for losses that an operator may claim for a fiscal year ending after March 27, 2018, may not exceed 16% of the lesser of the following amounts:

• its adjusted annual loss for the fiscal year; and
• the amount equal to the total of:
  • the amount corresponding to the pre-production development expenses it incurred for the fiscal year that does not exceed the amount it deducted for the fiscal year as an pre-production development allowance,
  • the amount corresponding to community consultation expenses it incurred for the fiscal year that does not exceed the amount it deducted for the fiscal year as an allowance for community consultations,
  • the amount corresponding to the environmental studies expenses it incurred for the fiscal year that does not exceed the amount it deducted for the fiscal year as an environmental studies allowance, and
  • if the operator is an eligible operator for the fiscal year, 50% of the amount corresponding to the exploration expenses it incurred for the fiscal year that does not exceed the amount it deducted for the fiscal year as an exploration allowance.

Application date

These changes will apply to a fiscal year of an operator that ends after March 27, 2018, in respect of environmental studies expenses incurred after that day.

For more information, see pages A.124 to A.127 of Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

A refundable tax credit has been introduced to encourage small and medium-sized businesses (SMBs) to offer training to their workers. The tax credit will enable qualified corporations to receive tax assistance of up to $5,460 a year for each eligible employee who participates in eligible training. Qualified corporations and corporations that are members of a partnership can claim the tax credit for eligible training expenditures if they carry on an SMB for which the payroll is less than $7 million. The expenditures must have been incurred by the qualified corporation or partnership after March 27, 2018, but before January 1, 2023.

Qualified corporation

For a given taxation year, “qualified corporation” means a corporation, other than an excluded corporation, that has an establishment in Québec and carries on a business in Québec.

A corporation, other than an excluded corporation, that is a member of a partnership that has an establishment in Québec and carries on a business in Québec can claim the tax credit for a taxation year in which the partnership's fiscal period ends. However, it must claim the tax credit in proportion to its share of the partnership's income or loss for the fiscal period.

Eligible employee

For a given taxation year or fiscal period, “eligible employee” means an employee of the corporation or partnership (other than an excluded employee) who works at an establishment in Québec.

In addition, the employee must meet the following conditions for the year or fiscal period, as applicable:

• the employee holds full-time employment involving a minimum of 26 hours of work per week, for an expected minimum duration of 40 weeks;
• the employee's duties consist in undertaking or directly supervising activities of the qualified corporation or partnership at one of its establishments in Québec.

A shareholder that holds less than 10% of the shares in any class of the qualified corporation's capital stock is considered to be an “excluded employee.”

Eligible training

“Eligible training” means training received by an eligible employee during an eligible training period through a recognized educational institution. The training may lead to a diploma, although this is not an eligibility requirement for the tax credit.

Eligible training period

“Eligible training period” refers to a period in the normal weekly work schedule of an eligible employee during which the employee is given time away from his or her usual duties to participate in eligible training.

For a given taxation year or fiscal period, an eligible employee's total eligible training periods cannot exceed 520 hours and his or her weekly work schedule cannot exceed 40 hours for the purpose of calculating the limit.

Recognized educational institution

“Recognized educational institution” means an educational institution that is:

• a secondary-level or college-level educational institution under the authority of the Ministère de l'Éducation et de l'Enseignement supérieur;
• accredited for purposes of subsidies under section 77 of the Act respecting private education;
• mentioned in the list established by the Minister of Higher Education, Research, Science and Technology under any of subparagraphs 1 to 3 of the first paragraph of section 56 of the Act respecting financial assistance for education expenses;
• operated by a person holding a permit issued by the Minister of Education, Recreation and Sports under section 12 of the Act respecting private education, provided that it offers a vocational education or vocational training program referred to in Chapter I of that Act.

Eligible training expenditures

For a given taxation year or fiscal period, “eligible training expenditures” of a qualified corporation or a partnership means salaries and wages calculated in accordance with the Taxation Act that the qualified corporation or partnership incurs in respect of an eligible employee for the taxation year or fiscal period, as applicable, after March 27, 2018, but before January 1, 2023.

The salary and wages must be attributable to an eligible training period and paid to an employee before the refundable tax credit is claimed.

In addition, the maximum hourly rate for eligible training expenditures is $35. If an eligible employee is not remunerated on an hourly basis, the employee's hourly rate is deemed to correspond to the ratio between the employee's annualized salary or wages and 2,080 hours.

Determination of the refundable tax credit

The refundable tax credit can be claimed by:

• a qualified corporation for a taxation year; or
• a corporation, other than an excluded corporation, that is a member of a partnership for a taxation year in which the partnership's fiscal period ends. However, it must claim the tax credit in proportion to its share of the partnership's income or loss for the fiscal period.

The tax credit corresponds to an amount equal to 30% of eligible training expenditures that the qualified corporation or the partnership paid to an eligible employee for the taxation year or the fiscal period, where the total payroll of the qualified corporation or the partnership for the taxation year or the fiscal period, as applicable, does not exceed $5 million.

The 30% rate is reduced linearly if the total payroll exceeds $5 million, and it is zero if the total payroll is $7 million or more.

Total payroll

The “total payroll” of a qualified corporation or a partnership for a taxation year or a fiscal period, respectively, corresponds to the total payroll determined as provided in the Act respecting the Régie de l'assurance maladie du Québec.

Note that the total payroll is determined by taking into account the payroll of all corporations or partnerships with which the qualified corporation or partnership is associated.

For more information, see pages A.74 and A.77 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

A refundable tax credit has been introduced to encourage small and medium-sized businesses (SMBs) to offer training to their workers. The tax credit will enable qualified corporations to receive tax assistance of up to $5,460 a year for each eligible employee who participates in eligible training. Qualified corporations and corporations that are members of a partnership can claim the tax credit for eligible training expenditures if they carry on an SMB for which the payroll is less than $7 million. The expenditures must have been incurred by the qualified corporation or partnership after March 27, 2018, but before January 1, 2023.

Qualified corporation

For a given taxation year, “qualified corporation” means a corporation, other than an excluded corporation, that has an establishment in Québec and carries on a business in Québec.

A corporation, other than an excluded corporation, that is a member of a partnership that has an establishment in Québec and carries on a business in Québec can claim the tax credit for a taxation year in which the partnership's fiscal period ends. However, it must claim the tax credit in proportion to its share of the partnership's income or loss for the fiscal period.

Eligible employee

For a given taxation year or fiscal period, “eligible employee” means an employee of the corporation or partnership (other than an excluded employee) who works at an establishment in Québec.

In addition, the employee must meet the following conditions for the year or fiscal period, as applicable:

• the employee holds full-time employment involving a minimum of 26 hours of work per week, for an expected minimum duration of 40 weeks;
• the employee's duties consist in undertaking or directly supervising activities of the qualified corporation or partnership at one of its establishments in Québec.

A shareholder that holds less than 10% of the shares in any class of the qualified corporation's capital stock is considered to be an “excluded employee.”

Eligible training

“Eligible training” means training received by an eligible employee during an eligible training period through a recognized educational institution. The training may lead to a diploma, although this is not an eligibility requirement for the tax credit.

Eligible training period

“Eligible training period” refers to a period in the normal weekly work schedule of an eligible employee during which the employee is given time away from his or her usual duties to participate in eligible training.

For a given taxation year or fiscal period, an eligible employee's total eligible training periods cannot exceed 520 hours and his or her weekly work schedule cannot exceed 40 hours for the purpose of calculating the limit.

Recognized educational institution

“Recognized educational institution” means an educational institution that is:

• a secondary-level or college-level educational institution under the authority of the Ministère de l'Éducation et de l'Enseignement supérieur;
• accredited for purposes of subsidies under section 77 of the Act respecting private education;
• mentioned in the list established by the Minister of Higher Education, Research, Science and Technology under any of subparagraphs 1 to 3 of the first paragraph of section 56 of the Act respecting financial assistance for education expenses;
• operated by a person holding a permit issued by the Minister of Education, Recreation and Sports under section 12 of the Act respecting private education, provided that it offers a vocational education or vocational training program referred to in Chapter I of that Act.

Eligible training expenditures

For a given taxation year or fiscal period, “eligible training expenditures” of a qualified corporation or a partnership means salaries and wages calculated in accordance with the Taxation Act that the qualified corporation or partnership incurs in respect of an eligible employee for the taxation year or fiscal period, as applicable, after March 27, 2018, but before January 1, 2023.

The salary and wages must be attributable to an eligible training period and paid to an employee before the refundable tax credit is claimed.

In addition, the maximum hourly rate for eligible training expenditures is $35. If an eligible employee is not remunerated on an hourly basis, the employee's hourly rate is deemed to correspond to the ratio between the employee's annualized salary or wages and 2,080 hours.

Determination of the refundable tax credit

The refundable tax credit can be claimed by:

• a qualified corporation for a taxation year; or
• a corporation, other than an excluded corporation, that is a member of a partnership for a taxation year in which the partnership's fiscal period ends. However, it must claim the tax credit in proportion to its share of the partnership's income or loss for the fiscal period.

The tax credit corresponds to an amount equal to 30% of eligible training expenditures that the qualified corporation or the partnership paid to an eligible employee for the taxation year or the fiscal period, where the total payroll of the qualified corporation or the partnership for the taxation year or the fiscal period, as applicable, does not exceed $5 million.

The 30% rate is reduced linearly if the total payroll exceeds $5 million, and it is zero if the total payroll is $7 million or more.

Total payroll

The “total payroll” of a qualified corporation or a partnership for a taxation year or a fiscal period, respectively, corresponds to the total payroll determined as provided in the Act respecting the Régie de l'assurance maladie du Québec.

Note that the total payroll is determined by taking into account the payroll of all corporations or partnerships with which the qualified corporation or partnership is associated.

For more information, see pages A.74 and A.77 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

A temporary refundable tax credit has been introduced to support the start or continuation of the digital transformation of print media companies.

This refundable tax credit will provide qualified corporations (other than excluded corporations) and qualified partnerships with tax assistance of up to $7 million annually for expenditures they incur after March 27, 2018, and before January 1, 2023, for the purpose of the digital transformation of their print media activities.

Qualified corporation

For a taxation year, a qualified corporation is a corporation, other than an excluded corporation, that has an establishment in Québec, carries on a business in Québec and holds a qualification certificate issued by Investissement Québec for the year.

Qualified partnership

For a fiscal period, a qualified partnership is a partnership that has an establishment in Québec, carries on a business in Québec and holds a qualification certificate issued by Investissement Québec for the period.

Eligible digital conversion costs

The eligible digital conversion costs for a taxation year of a qualified corporation or a fiscal period of a qualified partnership are the costs incurred by the corporation or partnership for the year or period that:

• are reasonable in the circumstances;
• correspond to the total of amounts paid by the corporation or partnership for the year or period in respect of qualified wages or salaries of its employees, and expenditures related to an eligible digital conversion contract.

Qualified wages or salaries

For a taxation year or a fiscal period, qualified wages or salaries refers to the portion of wages or salaries calculated in accordance with the Taxation Act that a qualified corporation or qualified partnership incurs, for that year or period, in respect of a qualified employee (for whom Investissement Québec has issued a qualification certificate). The wages or salaries must have been incurred after March 27, 2018, and before January 1, 2023, and be reasonably attributable to eligible digital conversion activities of an eligible medium that is specified on a qualification certificate issued to the corporation or partnership by Investissement Québec for that year or period.

Expenditure related to an eligible digital conversion contract

For a taxation year or a fiscal period, an expenditure related to an eligible digital conversion contract means 80% of the portion of a qualified corporation's or a qualified partnership's expenditure for costs provided for in an eligible digital conversion contract (for which Investissement Québec has issued a qualification certificate). The costs must relate to the acquisition or lease of qualified property, the supply of eligible services, a right of use or an eligible licence and must have been incurred by the corporation after March 27, 2018, and before January 1, 2023, and be reasonably attributable to eligible digital conversion activities of an eligible medium specified on a qualification certificate issued to the corporation or partnership by Investissement Québec for that year or period.

However, qualified property acquired under an eligible digital conversion contract must be acquired before January 1, 2022.

Calculating the refundable tax credit

The refundable tax credit can be granted to:

• a qualified corporation for a taxation year;
• a corporation, other than an excluded corporation, that is a member of a qualified partnership for a taxation year in which the partnership's fiscal period ends, in proportion to its share of the qualified partnership's income or loss for the fiscal period.

It is equal to 35% of the lesser of:

• the eligible digital conversion costs incurred by the corporation or the partnership for the taxation year or fiscal period; or
• the annual limit on eligible digital conversion costs applicable to a taxation year or fiscal period.

The annual limit on eligible digital conversion costs applicable to a taxation year or fiscal period corresponds to $20 million if the qualified corporation or qualified partnership is not associated with any other qualified corporation or qualified partnership in the taxation year or fiscal period.

Where the qualified corporation or qualified partnership is associated with another qualified corporation or qualified partnership in the taxation year or fiscal period, the $20 million must be shared between the qualified corporations and qualified partnerships, in accordance with the usual rules.

Thus, in general, the maximum amount of the refundable tax credit for a taxation year or fiscal period is $7 million.

For more information, see pages A.77 to A.85 of Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

A temporary refundable tax credit has been introduced to support the start or continuation of the digital transformation of print media companies.

This refundable tax credit will provide qualified corporations (other than excluded corporations) and qualified partnerships with tax assistance of up to $7 million annually for expenditures they incur after March 27, 2018, and before January 1, 2023, for the purpose of the digital transformation of their print media activities.

Qualified corporation

For a taxation year, a qualified corporation is a corporation, other than an excluded corporation, that has an establishment in Québec, carries on a business in Québec and holds a qualification certificate issued by Investissement Québec for the year.

Qualified partnership

For a fiscal period, a qualified partnership is a partnership that has an establishment in Québec, carries on a business in Québec and holds a qualification certificate issued by Investissement Québec for the period.

Eligible digital conversion costs

The eligible digital conversion costs for a taxation year of a qualified corporation or a fiscal period of a qualified partnership are the costs incurred by the corporation or partnership for the year or period that:

• are reasonable in the circumstances;
• correspond to the total of amounts paid by the corporation or partnership for the year or period in respect of qualified wages or salaries of its employees, and expenditures related to an eligible digital conversion contract.

Qualified wages or salaries

For a taxation year or a fiscal period, qualified wages or salaries refers to the portion of wages or salaries calculated in accordance with the Taxation Act that a qualified corporation or qualified partnership incurs, for that year or period, in respect of a qualified employee (for whom Investissement Québec has issued a qualification certificate). The wages or salaries must have been incurred after March 27, 2018, and before January 1, 2023, and be reasonably attributable to eligible digital conversion activities of an eligible medium that is specified on a qualification certificate issued to the corporation or partnership by Investissement Québec for that year or period.

Expenditure related to an eligible digital conversion contract

For a taxation year or a fiscal period, an expenditure related to an eligible digital conversion contract means 80% of the portion of a qualified corporation's or a qualified partnership's expenditure for costs provided for in an eligible digital conversion contract (for which Investissement Québec has issued a qualification certificate). The costs must relate to the acquisition or lease of qualified property, the supply of eligible services, a right of use or an eligible licence and must have been incurred by the corporation after March 27, 2018, and before January 1, 2023, and be reasonably attributable to eligible digital conversion activities of an eligible medium specified on a qualification certificate issued to the corporation or partnership by Investissement Québec for that year or period.

However, qualified property acquired under an eligible digital conversion contract must be acquired before January 1, 2022.

Calculating the refundable tax credit

The refundable tax credit can be granted to:

• a qualified corporation for a taxation year;
• a corporation, other than an excluded corporation, that is a member of a qualified partnership for a taxation year in which the partnership's fiscal period ends, in proportion to its share of the qualified partnership's income or loss for the fiscal period.

It is equal to 35% of the lesser of:

• the eligible digital conversion costs incurred by the corporation or the partnership for the taxation year or fiscal period; or
• the annual limit on eligible digital conversion costs applicable to a taxation year or fiscal period.

The annual limit on eligible digital conversion costs applicable to a taxation year or fiscal period corresponds to $20 million if the qualified corporation or qualified partnership is not associated with any other qualified corporation or qualified partnership in the taxation year or fiscal period.

Where the qualified corporation or qualified partnership is associated with another qualified corporation or qualified partnership in the taxation year or fiscal period, the $20 million must be shared between the qualified corporations and qualified partnerships, in accordance with the usual rules.

Thus, in general, the maximum amount of the refundable tax credit for a taxation year or fiscal period is $7 million.

For more information, see pages A.77 to A.85 of Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Two of the three annual limits on childcare expenses eligible for the refundable tax credit for childcare expenses have been increased. Beginning with the 2018 taxation year, the applicable limits are:

• $13,000 for childcare expenses paid in respect of a child with a severe and prolonged impairment in mental or physical functions; and
• $9,500 for childcare expenses paid in respect of a child who does not have such an impairment and who is under 7 at the end of a year, or who would have been had the child been living.

In addition, all three annual limits on childcare expenses eligible for the refundable tax credit for childcare expenses ($13,000, $9,500 and $5,000) will be automatically adjusted each year as of the 2019 taxation year.

For more information, see pages A.40 through A.43 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Two of the three annual limits on childcare expenses eligible for the refundable tax credit for childcare expenses have been increased. Beginning with the 2018 taxation year, the applicable limits are:

• $13,000 for childcare expenses paid in respect of a child with a severe and prolonged impairment in mental or physical functions; and
• $9,500 for childcare expenses paid in respect of a child who does not have such an impairment and who is under 7 at the end of a year, or who would have been had the child been living.

In addition, all three annual limits on childcare expenses eligible for the refundable tax credit for childcare expenses ($13,000, $9,500 and $5,000) will be automatically adjusted each year as of the 2019 taxation year.

For more information, see pages A.40 through A.43 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

To encourage more projects with a structuring effect on the Québec economy, investment projects for the development of an eligible digital platform may, under certain conditions, be recognized for the purposes of the tax holiday for large investment projects.

An “eligible digital platform” is a computer environment that enables content management or use, that serves as an intermediary in accessing information, services or property supplied or edited by a corporation or partnership, or by a third party, and that is not a tax-exempt platform.

Clarifications regarding the income tax holiday

Eligible activities pertaining to a large investment project for the development of an eligible digital platform means activities relating to the use of the eligible digital platform. Accordingly, activities that consist in selling property or offering services via the digital platform are not eligible activities pertaining to the large investment project.

Consequently, the income tax holiday applies only to income that is reasonably attributable to the use of the eligible digital platform. This income includes:

• fees and royalties charged by the operator of the eligible digital platform to use the platform as an intermediary;
• the portion of subscription fees respecting the eligible digital platform that may reasonably be considered to have been paid for the use of the platform;
• amounts paid by third parties to use the eligible digital platform as a gateway to their website;
• other such amounts.

The portion of subscription fees paid for services received or property acquired, other than the right to use the platform, is not eligible for the income tax holiday.

Clarifications regarding the holiday from employer health services fund (HSF) contributions

Salaries and wages paid to employees of the corporation or partnership for activities relating to the maintenance and upgrade of digital platform components, support service, customer service relating to the use of the platform, and other similar activities give entitlement to the holiday from employer HSF contributions.

Salaries and wages paid to an employee by the corporation or partnership for the portion of the employee's time devoted to eligible activities relating to the large investment project and other activities of the corporation or partnership do not give entitlement to the holiday from employer HSF contributions.

Salaries and wages paid by the corporation or partnership to its employees whose tasks consist in developing the eligible digital platform do not give entitlement to the holiday from employer HSF contributions.

Application date

These measures apply to investment projects that begin after March 27, 2018.

For more information, see pages A.66 to A.69 of Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

The following changes have been made to the compensation tax:

• reduction of the tax rate applicable to salaries and wages paid during the period from April 1, 2018, to March 31, 2022;
• introduction of a maximum annual amount for salaries and wages paid by a financial institution after March 31, 2018, that are subject to the tax.

The tax rate applicable to salaries and wages paid by financial institutions during the period from April 1, 2022, to March 31, 2024, remains unchanged. The date on which the tax will be eliminated (March 31, 2024) also remains unchanged.

In addition, there have been no changes to the calculation of the compensation tax on insurance premiums or to the calculation of amounts determined with respect to an insurance fund. In these cases, the compensation tax rate is 0.48% until March 31, 2022, and 0.30% from April 1, 2022, to March 31, 2024.

Adjustment of the compensation tax rate on wages paid

The table below shows the adjusted compensation tax rates for financial institutions according to the period concerned.

Adjusted compensation tax rates for financial institutions April 1, 2018, to March 31, 2019 April 1, 2019 to March 31, 2020 April 1, 2020, to March 31, 2022 April 1, 2022, to March 31, 2024 Bank, loan corporation, trust corporation or corporation trading in securities 4.29% 4.22% 4.14% 2.80%* Savings and credit union 3.39% 3.30% 3.26% 2.20%* Any other person 1.37% 1.34% 1.32% 0.90%* *    This rate has not been adjusted. Maximum amount of salaries and wages paid that are subject to the compensation tax

The maximum amount of salaries and wages paid after March 31, 2018, by a person that is a financial institution throughout a taxation year, and that are subject to the compensation tax for a given year, is as follows:

• in the case of a bank, a loan corporation, a trust corporation or a corporation trading in securities: $1.1 billion;
• in the case of a savings and credit union: $550 million;
• in the case of any other person: $275 million.

Terms of application

New rules specifying how to apply the maximum amount of salaries and wages subject to the compensation tax and the new tax rates have been introduced for financial institutions. These new rules apply to the following situations:

• a taxation year includes April 1, 2018 (the effective date of the changes);
• a taxation year includes March 31, 2024 (the date on which the compensation tax is to be eliminated);
• a taxation year has fewer than 365 days;
• a person subject to the tax is a financial institution for only a part of a taxation year.

For more information, see pages A.116 to A.124 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.