Revenu Québec Infos

In calculating the taxable benefits related to the use of an automobile or the automobile expenses that can be deducted for income tax purposes, you must take into account certain limits and prescribed rates. The limits and rates for 2016 are listed below:

• For purposes of capital cost allowance (CCA), the ceiling on the capital cost of passenger vehicles is $30,000 (plus GST and QST) for vehicles purchased after 2015. 
• The limit on deductible leasing costs is $800 per month (plus GST and QST) for leases entered into after 2015. Under a separate restriction, deductible leasing costs are prorated where the value of the passenger vehicle exceeds the capital cost ceiling. 
• The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes is 54 cents per kilometre for the first 5,000 kilometres and 48 cents for each additional kilometre. 
• The maximum allowable interest deduction for amounts borrowed to purchase a passenger vehicle is $300 per month for loans related to vehicles acquired after 2015. 
• 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 is 26 cents per kilometre. For taxpayers employed principally in selling or leasing automobiles, the prescribed rate is 23 cents per kilometre.

Income-based limits eliminated

Effective as of the 2016 taxation year, tax legislation will be amended to eliminate income-related limits for the purposes of calculating the tax credits for gifts. Thus:

• for the purposes of calculating the tax credit for charitable donations and other gifts, the total eligible amount of the individual's charitable donations for a given taxation year will correspond to the individual's total charitable donations for the year;
• for the purposes of calculating the tax credit for cultural patronage, the total eligible amount of the individual's patronage gifts for a given taxation year will correspond to the individual's total patronage gifts for the year;
• for the purposes of calculating the additional tax credit of 25% for a large cultural donation, the eligible amount of an individual's large cultural donation for a given taxation year must be determined without taking into account the individual's income for the year.

Partial increase in the rate of the tax credit for charitable donations and other gifts

Effective as of the 2017 taxation year, tax legislation will be amended to increase the amount of the tax credit for charitable donations and other gifts for individuals whose marginal tax rate is higher than 24%. The maximum amount that an individual will be able to claim for this tax credit for a given taxation year will therefore be equal to the total of the following amounts:

• 20% of the lesser of $200 or the individual's total eligible gifts for the year;
• 25.75% of the lesser of the following amounts:
  • the amount by which the individual's total eligible gifts for the year exceeds $200, or
  • the amount by which the individual's taxable income for the year exceeds the threshold for the year of the fourth tax bracket of the personal income tax table;
• 24% of the amount by which the individual's total eligible gifts for the year exceeds the aggregate of $200 and the amount of such gifts to which the rate of 25.75% applies.

For more information see pages A.22 to A.24 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

In calculating the taxable benefits related to the use of an automobile or the automobile expenses that can be deducted for income tax purposes, you must take into account certain limits and prescribed rates. The limits and rates for 2016 are listed below:

• For purposes of capital cost allowance (CCA), the ceiling on the capital cost of passenger vehicles is $30,000 (plus GST and QST) for vehicles purchased after 2015. 
• The limit on deductible leasing costs is $800 per month (plus GST and QST) for leases entered into after 2015. Under a separate restriction, deductible leasing costs are prorated where the value of the passenger vehicle exceeds the capital cost ceiling. 
• The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes is 54 cents per kilometre for the first 5,000 kilometres and 48 cents for each additional kilometre. 
• The maximum allowable interest deduction for amounts borrowed to purchase a passenger vehicle is $300 per month for loans related to vehicles acquired after 2015. 
• 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 is 26 cents per kilometre. For taxpayers employed principally in selling or leasing automobiles, the prescribed rate is 23 cents per kilometre.

As part of the budget speech of March 26, 2015, an easing of the tax provisions applicable to the disposition of qualified shares of corporations in the primary or manufacturing sectors carried out in conjunction with a transfer of a family business was announced. For the application of the easing, a transfer of a family business will be designated as qualifying, in respect of a taxpayer, where the following seven qualification criteria are met.

Criterion 1

The taxpayer disposing of the shares concerned is an individual other than a trust.

Criterion 2

The taxpayer (or the taxpayer's spouse), while he or she held the shares concerned, played an active role in a business carried on by the corporation in question, or by a corporation in which the corporation in question held a “substantial interest” according to the meaning given to this expression in the Income Tax Act, during the 24-month period immediately preceding the disposition of the shares concerned.

Criterion 3

The taxpayer (or the taxpayer's spouse) does not, after the disposition of the shares concerned, play an active role in a business actively carried on by the acquirer or by the corporation in question (or by a corporation in which the corporation in question holds a substantial interest), except for:

• an active role aimed at fostering a harmonious transfer of the knowledge possessed by the taxpayer (or the taxpayer's spouse) of a business carried on by such a corporation to the other persons active in carrying on the business; or 
• an active role in a business carried on by such a corporation, if substantially all of the income of the business is not derived from the sale, rental or development, as applicable, of property similar to, or the providing of services similar to, those of a business carried on by the corporation in question, the acquirer or any corporation in which the corporation in question or the acquirer held an interest, directly or indirectly.

Criterion 4

The taxpayer (or the taxpayer's spouse) does not, during the period beginning one month after the disposition of the shares concerned and ending at the end of a series of operations including the disposition of the shares concerned, have de jure control of the corporation in question or of a corporation in which the corporation in question had a substantial interest, and neither the taxpayer nor the taxpayer's spouse belong to a group of persons having the de jure control of such a corporation, except for:

• a corporation carrying on a business, if substantially all of the income of the business is not derived from the sale, rental or development, as applicable, of property similar to, or the providing of services similar to, those of a business carried on by the corporation in question, the acquirer or any corporation in which the corporation in question or the acquirer held an interest, directly or indirectly;
• a corporation that is not actively carrying on a business.

Criterion 5

The taxpayer (or the taxpayer's spouse) does not, during the period beginning one month after the disposition of the shares concerned and ending at the end of a series of operations including the disposition of the shares concerned, hold, directly or indirectly, common shares of the corporation in question or a corporation in which the corporation in question had a substantial interest, except for common shares in a corporation that is:

• carrying on a business, if substantially all of the income of the business is not derived from the sale, rental or development, as applicable, of property similar to, or the providing of services similar to, those of a business carried on by the corporation in question, the acquirer or any corporation in which the corporation in question or the acquirer held an interest, directly or indirectly;
• not actively carrying on a business.

Criterion 6

The total fair market value of all the residual financial interests (in any form whatsoever) held, during the period beginning one month after the disposition of the shares concerned and ending at the end of a series of operations (excluding payment of those residual financial interests) including the disposition of the shares concerned, directly or indirectly, by all of the taxpayers benefiting from the easing (as well as their spouse, even if that spouse does not benefit from the easing) in a particular corporation must not be greater than 60% (80% in the case of a farming or fishing business) of the fair market value of the aggregate of the issued shares of a particular corporation.

Criterion 7

For the period beginning immediately after the disposition of the shares concerned and ending at the end of a series of operations including the disposition of the shares concerned, at least one person participating in the body of shareholders of the acquirer (or the spouse of such a person) plays an active role in carrying on the business carried on by the corporation in question or a business carried on by a corporation in which the corporation in question had an interest.

Application date

The easing will apply to dispositions of shares occurring after March 17, 2016.

For more information, see pages A.38 to A.44 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

As part of the budget speech of March 26, 2015, an easing of the tax provisions applicable to the disposition of qualified shares of corporations in the primary or manufacturing sectors carried out in conjunction with a transfer of a family business was announced. For the application of the easing, a transfer of a family business will be designated as qualifying, in respect of a taxpayer, where the following seven qualification criteria are met.

Criterion 1

The taxpayer disposing of the shares concerned is an individual other than a trust.

Criterion 2

The taxpayer (or the taxpayer's spouse), while he or she held the shares concerned, played an active role in a business carried on by the corporation in question, or by a corporation in which the corporation in question held a “substantial interest” according to the meaning given to this expression in the Income Tax Act, during the 24-month period immediately preceding the disposition of the shares concerned.

Criterion 3

The taxpayer (or the taxpayer's spouse) does not, after the disposition of the shares concerned, play an active role in a business actively carried on by the acquirer or by the corporation in question (or by a corporation in which the corporation in question holds a substantial interest), except for:

• an active role aimed at fostering a harmonious transfer of the knowledge possessed by the taxpayer (or the taxpayer's spouse) of a business carried on by such a corporation to the other persons active in carrying on the business; or 
• an active role in a business carried on by such a corporation, if substantially all of the income of the business is not derived from the sale, rental or development, as applicable, of property similar to, or the providing of services similar to, those of a business carried on by the corporation in question, the acquirer or any corporation in which the corporation in question or the acquirer held an interest, directly or indirectly.

Criterion 4

The taxpayer (or the taxpayer's spouse) does not, during the period beginning one month after the disposition of the shares concerned and ending at the end of a series of operations including the disposition of the shares concerned, have de jure control of the corporation in question or of a corporation in which the corporation in question had a substantial interest, and neither the taxpayer nor the taxpayer's spouse belong to a group of persons having the de jure control of such a corporation, except for:

• a corporation carrying on a business, if substantially all of the income of the business is not derived from the sale, rental or development, as applicable, of property similar to, or the providing of services similar to, those of a business carried on by the corporation in question, the acquirer or any corporation in which the corporation in question or the acquirer held an interest, directly or indirectly;
• a corporation that is not actively carrying on a business.

Criterion 5

The taxpayer (or the taxpayer's spouse) does not, during the period beginning one month after the disposition of the shares concerned and ending at the end of a series of operations including the disposition of the shares concerned, hold, directly or indirectly, common shares of the corporation in question or a corporation in which the corporation in question had a substantial interest, except for common shares in a corporation that is:

• carrying on a business, if substantially all of the income of the business is not derived from the sale, rental or development, as applicable, of property similar to, or the providing of services similar to, those of a business carried on by the corporation in question, the acquirer or any corporation in which the corporation in question or the acquirer held an interest, directly or indirectly;
• not actively carrying on a business.

Criterion 6

The total fair market value of all the residual financial interests (in any form whatsoever) held, during the period beginning one month after the disposition of the shares concerned and ending at the end of a series of operations (excluding payment of those residual financial interests) including the disposition of the shares concerned, directly or indirectly, by all of the taxpayers benefiting from the easing (as well as their spouse, even if that spouse does not benefit from the easing) in a particular corporation must not be greater than 60% (80% in the case of a farming or fishing business) of the fair market value of the aggregate of the issued shares of a particular corporation.

Criterion 7

For the period beginning immediately after the disposition of the shares concerned and ending at the end of a series of operations including the disposition of the shares concerned, at least one person participating in the body of shareholders of the acquirer (or the spouse of such a person) plays an active role in carrying on the business carried on by the corporation in question or a business carried on by a corporation in which the corporation in question had an interest.

Application date

The easing will apply to dispositions of shares occurring after March 17, 2016.

For more information, see pages A.38 to A.44 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

As part of the budget speech of March 26, 2015, an easing of the tax provisions applicable to the disposition of qualified shares of corporations in the primary or manufacturing sectors carried out in conjunction with a transfer of a family business was announced. For the application of the easing, a transfer of a family business will be designated as qualifying, in respect of a taxpayer, where the following seven qualification criteria are met.

Criterion 1

The taxpayer disposing of the shares concerned is an individual other than a trust.

Criterion 2

The taxpayer (or the taxpayer's spouse), while he or she held the shares concerned, played an active role in a business carried on by the corporation in question, or by a corporation in which the corporation in question held a “substantial interest” according to the meaning given to this expression in the Income Tax Act, during the 24-month period immediately preceding the disposition of the shares concerned.

Criterion 3

The taxpayer (or the taxpayer's spouse) does not, after the disposition of the shares concerned, play an active role in a business actively carried on by the acquirer or by the corporation in question (or by a corporation in which the corporation in question holds a substantial interest), except for:

• an active role aimed at fostering a harmonious transfer of the knowledge possessed by the taxpayer (or the taxpayer's spouse) of a business carried on by such a corporation to the other persons active in carrying on the business; or 
• an active role in a business carried on by such a corporation, if substantially all of the income of the business is not derived from the sale, rental or development, as applicable, of property similar to, or the providing of services similar to, those of a business carried on by the corporation in question, the acquirer or any corporation in which the corporation in question or the acquirer held an interest, directly or indirectly.

Criterion 4

The taxpayer (or the taxpayer's spouse) does not, during the period beginning one month after the disposition of the shares concerned and ending at the end of a series of operations including the disposition of the shares concerned, have de jure control of the corporation in question or of a corporation in which the corporation in question had a substantial interest, and neither the taxpayer nor the taxpayer's spouse belong to a group of persons having the de jure control of such a corporation, except for:

• a corporation carrying on a business, if substantially all of the income of the business is not derived from the sale, rental or development, as applicable, of property similar to, or the providing of services similar to, those of a business carried on by the corporation in question, the acquirer or any corporation in which the corporation in question or the acquirer held an interest, directly or indirectly;
• a corporation that is not actively carrying on a business.

Criterion 5

The taxpayer (or the taxpayer's spouse) does not, during the period beginning one month after the disposition of the shares concerned and ending at the end of a series of operations including the disposition of the shares concerned, hold, directly or indirectly, common shares of the corporation in question or a corporation in which the corporation in question had a substantial interest, except for common shares in a corporation that is:

• carrying on a business, if substantially all of the income of the business is not derived from the sale, rental or development, as applicable, of property similar to, or the providing of services similar to, those of a business carried on by the corporation in question, the acquirer or any corporation in which the corporation in question or the acquirer held an interest, directly or indirectly;
• not actively carrying on a business.

Criterion 6

The total fair market value of all the residual financial interests (in any form whatsoever) held, during the period beginning one month after the disposition of the shares concerned and ending at the end of a series of operations (excluding payment of those residual financial interests) including the disposition of the shares concerned, directly or indirectly, by all of the taxpayers benefiting from the easing (as well as their spouse, even if that spouse does not benefit from the easing) in a particular corporation must not be greater than 60% (80% in the case of a farming or fishing business) of the fair market value of the aggregate of the issued shares of a particular corporation.

Criterion 7

For the period beginning immediately after the disposition of the shares concerned and ending at the end of a series of operations including the disposition of the shares concerned, at least one person participating in the body of shareholders of the acquirer (or the spouse of such a person) plays an active role in carrying on the business carried on by the corporation in question or a business carried on by a corporation in which the corporation in question had an interest.

Application date

The easing will apply to dispositions of shares occurring after March 17, 2016.

For more information, see pages A.38 to A.44 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

As part of the budget speech of March 26, 2015, an easing of the tax provisions applicable to the disposition of qualified shares of corporations in the primary or manufacturing sectors carried out in conjunction with a transfer of a family business was announced. For the application of the easing, a transfer of a family business will be designated as qualifying, in respect of a taxpayer, where the following seven qualification criteria are met.

Criterion 1

The taxpayer disposing of the shares concerned is an individual other than a trust.

Criterion 2

The taxpayer (or the taxpayer's spouse), while he or she held the shares concerned, played an active role in a business carried on by the corporation in question, or by a corporation in which the corporation in question held a “substantial interest” according to the meaning given to this expression in the Income Tax Act, during the 24-month period immediately preceding the disposition of the shares concerned.

Criterion 3

The taxpayer (or the taxpayer's spouse) does not, after the disposition of the shares concerned, play an active role in a business actively carried on by the acquirer or by the corporation in question (or by a corporation in which the corporation in question holds a substantial interest), except for:

• an active role aimed at fostering a harmonious transfer of the knowledge possessed by the taxpayer (or the taxpayer's spouse) of a business carried on by such a corporation to the other persons active in carrying on the business; or 
• an active role in a business carried on by such a corporation, if substantially all of the income of the business is not derived from the sale, rental or development, as applicable, of property similar to, or the providing of services similar to, those of a business carried on by the corporation in question, the acquirer or any corporation in which the corporation in question or the acquirer held an interest, directly or indirectly.

Criterion 4

The taxpayer (or the taxpayer's spouse) does not, during the period beginning one month after the disposition of the shares concerned and ending at the end of a series of operations including the disposition of the shares concerned, have de jure control of the corporation in question or of a corporation in which the corporation in question had a substantial interest, and neither the taxpayer nor the taxpayer's spouse belong to a group of persons having the de jure control of such a corporation, except for:

• a corporation carrying on a business, if substantially all of the income of the business is not derived from the sale, rental or development, as applicable, of property similar to, or the providing of services similar to, those of a business carried on by the corporation in question, the acquirer or any corporation in which the corporation in question or the acquirer held an interest, directly or indirectly;
• a corporation that is not actively carrying on a business.

Criterion 5

The taxpayer (or the taxpayer's spouse) does not, during the period beginning one month after the disposition of the shares concerned and ending at the end of a series of operations including the disposition of the shares concerned, hold, directly or indirectly, common shares of the corporation in question or a corporation in which the corporation in question had a substantial interest, except for common shares in a corporation that is:

• carrying on a business, if substantially all of the income of the business is not derived from the sale, rental or development, as applicable, of property similar to, or the providing of services similar to, those of a business carried on by the corporation in question, the acquirer or any corporation in which the corporation in question or the acquirer held an interest, directly or indirectly;
• not actively carrying on a business.

Criterion 6

The total fair market value of all the residual financial interests (in any form whatsoever) held, during the period beginning one month after the disposition of the shares concerned and ending at the end of a series of operations (excluding payment of those residual financial interests) including the disposition of the shares concerned, directly or indirectly, by all of the taxpayers benefiting from the easing (as well as their spouse, even if that spouse does not benefit from the easing) in a particular corporation must not be greater than 60% (80% in the case of a farming or fishing business) of the fair market value of the aggregate of the issued shares of a particular corporation.

Criterion 7

For the period beginning immediately after the disposition of the shares concerned and ending at the end of a series of operations including the disposition of the shares concerned, at least one person participating in the body of shareholders of the acquirer (or the spouse of such a person) plays an active role in carrying on the business carried on by the corporation in question or a business carried on by a corporation in which the corporation in question had an interest.

Application date

The easing will apply to dispositions of shares occurring after March 17, 2016.

For more information, see pages A.38 to A.44 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

In the Budget Speech delivered on March 17, 2016, the Minister of Finance of Québec announced that the health contribution would be reduced gradually beginning in 2016 and ultimately eliminated in 2018. More specifically, for 2016, the maximum amount of the health contribution has been reduced as follows:

• from $100 to $50, for income greater than $18,570 but not greater than $41,265; and
• from $200 to $175, for income greater than $41,265 but not greater than $134,095.

Accordingly, you must take the reduction into account when calculating source deductions as of July 1, 2016. In addition, the amounts used to calculate the health contribution included in calculating source deductions of income tax have been reduced (from $50 to $0 and from $175 to $150) so that individuals can benefit from the reduction retroactively to January 1, 2016. The Source Deduction Table for Québec Income Tax (TP-1015.TI-V), the guide entitled Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V) and the WinRAS application have all been updated to reflect the changes. As a result, be sure to use the 2016-07 version of the table, guide or application for any pay period beginning after June 30, 2016.

Instalment Payments

Individuals who are required to pay their income tax in instalments may adjust any instalment payment due after March 31, 2016, in accordance with the usual rules, to take into account the effects of the new reduction plan leading to the elimination of the health contribution.

In the Budget Speech delivered on March 17, 2016, the Minister of Finance of Québec announced that the health contribution would be reduced gradually beginning in 2016 and ultimately eliminated in 2018. More specifically, for 2016, the maximum amount of the health contribution has been reduced as follows:

• from $100 to $50, for income greater than $18,570 but not greater than $41,265; and
• from $200 to $175, for income greater than $41,265 but not greater than $134,095.

Accordingly, you must take the reduction into account when calculating source deductions as of July 1, 2016. In addition, the amounts used to calculate the health contribution included in calculating source deductions of income tax have been reduced (from $50 to $0 and from $175 to $150) so that individuals can benefit from the reduction retroactively to January 1, 2016. The Source Deduction Table for Québec Income Tax (TP-1015.TI-V), the guide entitled Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V) and the WinRAS application have all been updated to reflect the changes. As a result, be sure to use the 2016-07 version of the table, guide or application for any pay period beginning after June 30, 2016.

Instalment Payments

Individuals who are required to pay their income tax in instalments may adjust any instalment payment due after March 31, 2016, in accordance with the usual rules, to take into account the effects of the new reduction plan leading to the elimination of the health contribution.

In the Budget Speech delivered on March 17, 2016, the Minister of Finance of Québec announced that the health contribution would be reduced gradually beginning in 2016 and ultimately eliminated in 2018. More specifically, for 2016, the maximum amount of the health contribution has been reduced as follows:

• from $100 to $50, for income greater than $18,570 but not greater than $41,265; and
• from $200 to $175, for income greater than $41,265 but not greater than $134,095.

Accordingly, you must take the reduction into account when calculating source deductions as of July 1, 2016. In addition, the amounts used to calculate the health contribution included in calculating source deductions of income tax have been reduced (from $50 to $0 and from $175 to $150) so that individuals can benefit from the reduction retroactively to January 1, 2016. The Source Deduction Table for Québec Income Tax (TP-1015.TI-V), the guide entitled Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V) and the WinRAS application have all been updated to reflect the changes. As a result, be sure to use the 2016-07 version of the table, guide or application for any pay period beginning after June 30, 2016.

Instalment Payments

Individuals who are required to pay their income tax in instalments may adjust any instalment payment due after March 31, 2016, in accordance with the usual rules, to take into account the effects of the new reduction plan leading to the elimination of the health contribution.

In the Budget Speech delivered on March 17, 2016, the Minister of Finance of Québec announced that the health contribution would be reduced gradually beginning in 2016 and ultimately eliminated in 2018. More specifically, for 2016, the maximum amount of the health contribution has been reduced as follows:

• from $100 to $50, for income greater than $18,570 but not greater than $41,265; and
• from $200 to $175, for income greater than $41,265 but not greater than $134,095.

Accordingly, you must take the reduction into account when calculating source deductions as of July 1, 2016. In addition, the amounts used to calculate the health contribution included in calculating source deductions of income tax have been reduced (from $50 to $0 and from $175 to $150) so that individuals can benefit from the reduction retroactively to January 1, 2016. The Source Deduction Table for Québec Income Tax (TP-1015.TI-V), the guide entitled Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V) and the WinRAS application have all been updated to reflect the changes. As a result, be sure to use the 2016-07 version of the table, guide or application for any pay period beginning after June 30, 2016.

Instalment Payments

Individuals who are required to pay their income tax in instalments may adjust any instalment payment due after March 31, 2016, in accordance with the usual rules, to take into account the effects of the new reduction plan leading to the elimination of the health contribution.

There has been a 25% increase in the rates of the refundable tax credit relating to resources that qualified corporations can claim in respect of eligible expenses related to mineral resources that were incurred in the Near North or the Far North of Québec. Thus, the tax credit has been increased from 31% to 38.75% for a corporation that does not operate a mineral resource and is not a member of an associated group having a member who operates such a resource. The tax credit has been increased from 15% to 18.75% for other corporations.

The increased rates of the refundable tax credit relating to resources apply in respect of eligible expenses incurred after March 17, 2016.

For more information, see pages A.67 and A.68 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

There has been a 25% increase in the rates of the refundable tax credit relating to resources that qualified corporations can claim in respect of eligible expenses related to mineral resources that were incurred in the Near North or the Far North of Québec. Thus, the tax credit has been increased from 31% to 38.75% for a corporation that does not operate a mineral resource and is not a member of an associated group having a member who operates such a resource. The tax credit has been increased from 15% to 18.75% for other corporations.

The increased rates of the refundable tax credit relating to resources apply in respect of eligible expenses incurred after March 17, 2016.

For more information, see pages A.67 and A.68 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

There has been a 25% increase in the rates of the refundable tax credit relating to resources that qualified corporations can claim in respect of eligible expenses related to mineral resources that were incurred in the Near North or the Far North of Québec. Thus, the tax credit has been increased from 31% to 38.75% for a corporation that does not operate a mineral resource and is not a member of an associated group having a member who operates such a resource. The tax credit has been increased from 15% to 18.75% for other corporations.

The increased rates of the refundable tax credit relating to resources apply in respect of eligible expenses incurred after March 17, 2016.

For more information, see pages A.67 and A.68 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

There has been a 25% increase in the rates of the refundable tax credit relating to resources that qualified corporations can claim in respect of eligible expenses related to mineral resources that were incurred in the Near North or the Far North of Québec. Thus, the tax credit has been increased from 31% to 38.75% for a corporation that does not operate a mineral resource and is not a member of an associated group having a member who operates such a resource. The tax credit has been increased from 15% to 18.75% for other corporations.

The increased rates of the refundable tax credit relating to resources apply in respect of eligible expenses incurred after March 17, 2016.

For more information, see pages A.67 and A.68 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

The deduction for qualified innovative manufacturing corporations (hereinafter referred to as the "DIMC") is particularly intended for corporations in the manufacturing and processing sector that cannot claim the small business deduction.

The purpose of the DIMC is to encourage a qualified innovative manufacturing corporation to profit in Québec from a patent it has been granted as the result of scientific research and experimental development (R&D) work that it carried out in Québec. The DIMC will enable such a corporation to reduce its taxable income for a taxation year by an amount equal to a portion of the value of a qualified patented part integrated into qualified property that the corporation sold, leased or rented that year.

Calculation of the DIMC

Fiscal legislation will be amended so that a qualified innovative manufacturing corporation can deduct, in calculating its taxable income for a taxation year, a specified annual percentage of the lesser of:

• the total value of all qualified patented parts incorporated into qualified property that the corporation sold, leased or rented in the year; and
• the DIMC ceiling.

The following table shows the specified annual percentages for 2017 to 2020 and subsequent years.

Specified annual percentagesYear(s)Percentage201766.1201865.8201965.52020 and subsequent years65.2

For a particular taxation year, the DIMC ceiling will correspond to 50% of the net income derived from the sale, lease or rental of the qualified property shown in the separate accounts that a qualified innovative manufacturing corporation will be required to keep in that regard for the year.

The term "qualified innovative manufacturing corporation" refers to a corporation of which at least 50% of the activities, for a particular taxation year, consist of activities in the manufacturing and processing sector carried out in Québec.

The proportion of a corporation's activities in the manufacturing and processing sector will be determined using the following formula: the labour cost for activities in the manufacturing and processing sector carried out in Québec divided by the labour cost for all activities carried out in Québec.

For a particular taxation year, a qualified innovative manufacturing corporation will be required to have at least $15 million in paid-up capital calculated either for its previous taxation year or, if the corporation is in its first fiscal period, on the basis of its financial statements prepared at the beginning of the fiscal period in accordance with generally accepted accounting principles.

The term "qualified property" of a qualified innovative manufacturing corporation, for a particular taxation year, refers to property:

• that incorporates at least one qualified patented part for which the patent did not expire in the year;
• that the corporation sold, leased or rented in the year;
• in respect of which the corporation derived, for the year, gross income reasonably attributable to an establishment of the corporation located in Québec; and
• in respect of which the corporation kept separate accounts.

The term "qualified patented part" of a qualified innovative manufacturing corporation, for a particular taxation year, refers to an invention for which the corporation owns or co-owns a patent under the Patent Act or any other legislation of a jurisdiction other than Canada having the same effect.

Also, for the five-year period preceding the year in which an application for a patent for the invention was filed under the Patent Act or any other legislation of a jurisdiction other than Canada having the same effect, the total qualified R&D expenditures paid by the qualified innovative manufacturing corporation and any corporation associated with it in the year in which the R&D work was carried out will have to have been at least $500,000.

Furthermore, the corporation or associated corporation, where applicable, will have to have benefited from a refundable tax credit for R&D in respect of those R&D expenditures.

In addition, the only patents that will qualify for the DIMC are those for which an application was properly filed with the competent authorities after March 17, 2016, under the Patent Act or any other legislation of a jurisdiction other than Canada having the same effect.

Effective date

This new deduction for innovative manufacturing corporations will apply in respect of a taxation year of a corporation beginning after December 31, 2016.

For more information, see pages A.49 to A.56 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

The deduction for qualified innovative manufacturing corporations (hereinafter referred to as the "DIMC") is particularly intended for corporations in the manufacturing and processing sector that cannot claim the small business deduction.

The purpose of the DIMC is to encourage a qualified innovative manufacturing corporation to profit in Québec from a patent it has been granted as the result of scientific research and experimental development (R&D) work that it carried out in Québec. The DIMC will enable such a corporation to reduce its taxable income for a taxation year by an amount equal to a portion of the value of a qualified patented part integrated into qualified property that the corporation sold, leased or rented that year.

Calculation of the DIMC

Fiscal legislation will be amended so that a qualified innovative manufacturing corporation can deduct, in calculating its taxable income for a taxation year, a specified annual percentage of the lesser of:

• the total value of all qualified patented parts incorporated into qualified property that the corporation sold, leased or rented in the year; and
• the DIMC ceiling.

The following table shows the specified annual percentages for 2017 to 2020 and subsequent years.

Specified annual percentagesYear(s)Percentage201766.1201865.8201965.52020 and subsequent years65.2

For a particular taxation year, the DIMC ceiling will correspond to 50% of the net income derived from the sale, lease or rental of the qualified property shown in the separate accounts that a qualified innovative manufacturing corporation will be required to keep in that regard for the year.

The term "qualified innovative manufacturing corporation" refers to a corporation of which at least 50% of the activities, for a particular taxation year, consist of activities in the manufacturing and processing sector carried out in Québec.

The proportion of a corporation's activities in the manufacturing and processing sector will be determined using the following formula: the labour cost for activities in the manufacturing and processing sector carried out in Québec divided by the labour cost for all activities carried out in Québec.

For a particular taxation year, a qualified innovative manufacturing corporation will be required to have at least $15 million in paid-up capital calculated either for its previous taxation year or, if the corporation is in its first fiscal period, on the basis of its financial statements prepared at the beginning of the fiscal period in accordance with generally accepted accounting principles.

The term "qualified property" of a qualified innovative manufacturing corporation, for a particular taxation year, refers to property:

• that incorporates at least one qualified patented part for which the patent did not expire in the year;
• that the corporation sold, leased or rented in the year;
• in respect of which the corporation derived, for the year, gross income reasonably attributable to an establishment of the corporation located in Québec; and
• in respect of which the corporation kept separate accounts.

The term "qualified patented part" of a qualified innovative manufacturing corporation, for a particular taxation year, refers to an invention for which the corporation owns or co-owns a patent under the Patent Act or any other legislation of a jurisdiction other than Canada having the same effect.

Also, for the five-year period preceding the year in which an application for a patent for the invention was filed under the Patent Act or any other legislation of a jurisdiction other than Canada having the same effect, the total qualified R&D expenditures paid by the qualified innovative manufacturing corporation and any corporation associated with it in the year in which the R&D work was carried out will have to have been at least $500,000.

Furthermore, the corporation or associated corporation, where applicable, will have to have benefited from a refundable tax credit for R&D in respect of those R&D expenditures.

In addition, the only patents that will qualify for the DIMC are those for which an application was properly filed with the competent authorities after March 17, 2016, under the Patent Act or any other legislation of a jurisdiction other than Canada having the same effect.

Effective date

This new deduction for innovative manufacturing corporations will apply in respect of a taxation year of a corporation beginning after December 31, 2016.

For more information, see pages A.49 to A.56 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

The deduction for qualified innovative manufacturing corporations (hereinafter referred to as the "DIMC") is particularly intended for corporations in the manufacturing and processing sector that cannot claim the small business deduction.

The purpose of the DIMC is to encourage a qualified innovative manufacturing corporation to profit in Québec from a patent it has been granted as the result of scientific research and experimental development (R&D) work that it carried out in Québec. The DIMC will enable such a corporation to reduce its taxable income for a taxation year by an amount equal to a portion of the value of a qualified patented part integrated into qualified property that the corporation sold, leased or rented that year.

Calculation of the DIMC

Fiscal legislation will be amended so that a qualified innovative manufacturing corporation can deduct, in calculating its taxable income for a taxation year, a specified annual percentage of the lesser of:

• the total value of all qualified patented parts incorporated into qualified property that the corporation sold, leased or rented in the year; and
• the DIMC ceiling.

The following table shows the specified annual percentages for 2017 to 2020 and subsequent years.

Specified annual percentagesYear(s)Percentage201766.1201865.8201965.52020 and subsequent years65.2

For a particular taxation year, the DIMC ceiling will correspond to 50% of the net income derived from the sale, lease or rental of the qualified property shown in the separate accounts that a qualified innovative manufacturing corporation will be required to keep in that regard for the year.

The term "qualified innovative manufacturing corporation" refers to a corporation of which at least 50% of the activities, for a particular taxation year, consist of activities in the manufacturing and processing sector carried out in Québec.

The proportion of a corporation's activities in the manufacturing and processing sector will be determined using the following formula: the labour cost for activities in the manufacturing and processing sector carried out in Québec divided by the labour cost for all activities carried out in Québec.

For a particular taxation year, a qualified innovative manufacturing corporation will be required to have at least $15 million in paid-up capital calculated either for its previous taxation year or, if the corporation is in its first fiscal period, on the basis of its financial statements prepared at the beginning of the fiscal period in accordance with generally accepted accounting principles.

The term "qualified property" of a qualified innovative manufacturing corporation, for a particular taxation year, refers to property:

• that incorporates at least one qualified patented part for which the patent did not expire in the year;
• that the corporation sold, leased or rented in the year;
• in respect of which the corporation derived, for the year, gross income reasonably attributable to an establishment of the corporation located in Québec; and
• in respect of which the corporation kept separate accounts.

The term "qualified patented part" of a qualified innovative manufacturing corporation, for a particular taxation year, refers to an invention for which the corporation owns or co-owns a patent under the Patent Act or any other legislation of a jurisdiction other than Canada having the same effect.

Also, for the five-year period preceding the year in which an application for a patent for the invention was filed under the Patent Act or any other legislation of a jurisdiction other than Canada having the same effect, the total qualified R&D expenditures paid by the qualified innovative manufacturing corporation and any corporation associated with it in the year in which the R&D work was carried out will have to have been at least $500,000.

Furthermore, the corporation or associated corporation, where applicable, will have to have benefited from a refundable tax credit for R&D in respect of those R&D expenditures.

In addition, the only patents that will qualify for the DIMC are those for which an application was properly filed with the competent authorities after March 17, 2016, under the Patent Act or any other legislation of a jurisdiction other than Canada having the same effect.

Effective date

This new deduction for innovative manufacturing corporations will apply in respect of a taxation year of a corporation beginning after December 31, 2016.

For more information, see pages A.49 to A.56 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

The deduction for qualified innovative manufacturing corporations (hereinafter referred to as the "DIMC") is particularly intended for corporations in the manufacturing and processing sector that cannot claim the small business deduction.

The purpose of the DIMC is to encourage a qualified innovative manufacturing corporation to profit in Québec from a patent it has been granted as the result of scientific research and experimental development (R&D) work that it carried out in Québec. The DIMC will enable such a corporation to reduce its taxable income for a taxation year by an amount equal to a portion of the value of a qualified patented part integrated into qualified property that the corporation sold, leased or rented that year.

Calculation of the DIMC

Fiscal legislation will be amended so that a qualified innovative manufacturing corporation can deduct, in calculating its taxable income for a taxation year, a specified annual percentage of the lesser of:

• the total value of all qualified patented parts incorporated into qualified property that the corporation sold, leased or rented in the year; and
• the DIMC ceiling.

The following table shows the specified annual percentages for 2017 to 2020 and subsequent years.

Specified annual percentagesYear(s)Percentage201766.1201865.8201965.52020 and subsequent years65.2

For a particular taxation year, the DIMC ceiling will correspond to 50% of the net income derived from the sale, lease or rental of the qualified property shown in the separate accounts that a qualified innovative manufacturing corporation will be required to keep in that regard for the year.

The term "qualified innovative manufacturing corporation" refers to a corporation of which at least 50% of the activities, for a particular taxation year, consist of activities in the manufacturing and processing sector carried out in Québec.

The proportion of a corporation's activities in the manufacturing and processing sector will be determined using the following formula: the labour cost for activities in the manufacturing and processing sector carried out in Québec divided by the labour cost for all activities carried out in Québec.

For a particular taxation year, a qualified innovative manufacturing corporation will be required to have at least $15 million in paid-up capital calculated either for its previous taxation year or, if the corporation is in its first fiscal period, on the basis of its financial statements prepared at the beginning of the fiscal period in accordance with generally accepted accounting principles.

The term "qualified property" of a qualified innovative manufacturing corporation, for a particular taxation year, refers to property:

• that incorporates at least one qualified patented part for which the patent did not expire in the year;
• that the corporation sold, leased or rented in the year;
• in respect of which the corporation derived, for the year, gross income reasonably attributable to an establishment of the corporation located in Québec; and
• in respect of which the corporation kept separate accounts.

The term "qualified patented part" of a qualified innovative manufacturing corporation, for a particular taxation year, refers to an invention for which the corporation owns or co-owns a patent under the Patent Act or any other legislation of a jurisdiction other than Canada having the same effect.

Also, for the five-year period preceding the year in which an application for a patent for the invention was filed under the Patent Act or any other legislation of a jurisdiction other than Canada having the same effect, the total qualified R&D expenditures paid by the qualified innovative manufacturing corporation and any corporation associated with it in the year in which the R&D work was carried out will have to have been at least $500,000.

Furthermore, the corporation or associated corporation, where applicable, will have to have benefited from a refundable tax credit for R&D in respect of those R&D expenditures.

In addition, the only patents that will qualify for the DIMC are those for which an application was properly filed with the competent authorities after March 17, 2016, under the Patent Act or any other legislation of a jurisdiction other than Canada having the same effect.

Effective date

This new deduction for innovative manufacturing corporations will apply in respect of a taxation year of a corporation beginning after December 31, 2016.

For more information, see pages A.49 to A.56 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

The amount of qualified expenditures included in calculating the tax credits in the cultural sector that a qualified corporation can claim must be reduced by the amount of any government assistance and any non-government assistance, other than an excluded amount of assistance, that the corporation received or is entitled to receive.

Fiscal legislation will be amended so that amounts of assistance granted by Québec City under its program entitled Soutien à la production cinématographique et télévisuelle and by the Société des célébrations du 375e anniversaire de Montréal constitute excluded amounts of assistance for the purposes of certain tax credits in the cultural sector.

For more information, see pages A.71 and A.72 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.