Revenu Québec Infos

The builder's rights and obligations vary according to whether the builder sells, leases or lives in a residential complex that he or she built or substantially renovated. Applicable rights and obligations likewise vary according to whether the builder sells, rents or lives in an addition to a multi-unit residential complex that he or she built.

Construction of a residential complex for the purpose of leasing it or living in it

In general, a builder that builds or substantially renovates a residential complex, or that builds an addition to a multi-unit residential complex, in order to lease it (in whole or in part) or to live in it, is considered to be both the seller and the purchaser of the residential complex or the addition to the multi-unit residential complex.

The builder is deemed to have made a self-supply of the residential complex or of the addition to the multi-unit residential complex. In this case, the builder must, as a rule, remit the taxes deemed collected and calculated on the fair market value of the complex or the addition.

The taxes paid on the construction or substantial renovations, as well as any un-recovered taxes paid on the acquisition of the land included in the residential complex, may give entitlement to an ITC and ITR, provided the builder is a registrant. If the builder is not a registrant, a tax rebate may be granted under certain conditions.

In addition, to recover a portion of the taxes paid on the self-supply, the builder can claim a new residential rental property rebate for the GST and the QST paid using form FP-524-V, New Residential Rental Property GST Rebate Application, and form VD-370.67-V, New Residential Rental Property QST Rebate.

For more information, see Construction or Renovation of Residential Complexes, Residential Complexes and New or Substantially Renovated Residential Rental Property.

Sale of a new residential complex or new residential rental property 

A builder who sells a new residential complex or a residential complex to which the builder has made substantial renovations, other than new residential rental property, to an individual can usually pay or credit the amount of the GST and QST rebate granted for a new residential complex to the individual. In these cases, the individual and the builder must complete form FP-2190.C-V, GST-QST New Housing Rebate Application: Rebate Granted by a Builder. The builder must then send it to Revenu Québec along with the GST and QST returns for the reporting period in which the builder paid or credited the rebate to the individual.

In the case of new residential rental property, the builder cannot pay or credit the individual the amount of the GST and QST rebate. The individuals can claim this rebate using form FP-524-V, New Residential Rental Property GST Rebate Application, and form VD-370.67-V, New Residential Rental Property QST Rebate.

For more information, see Residential Complexes, New or Substantially Renovated Housing and New or Substantially Renovated Residential Rental Property.

Lease of a residential complex built for the purpose of being sold

A builder registered for the QST that leases for residential purposes a single-unit residential complex or a residential unit held in co-ownership that he or she built in order to sell is deemed to have made a self-supply of the complex.

The builder can elect not to include the QST deemed collected in his or her net tax for the period in which the self-supply was made. To make this election, the builder must file form VD-224.1-V, Election Respecting the Self-Supply of a Residential Complex, with Revenu Québec. Payment of the QST can be deferred for a period of up to 12 months.

Note there is no such election under the GST system.

The builder's rights and obligations vary according to whether the builder sells, leases or lives in a residential complex that he or she built or substantially renovated. Applicable rights and obligations likewise vary according to whether the builder sells, rents or lives in an addition to a multi-unit residential complex that he or she built.

Construction of a residential complex for the purpose of leasing it or living in it

In general, a builder (This link will open a new window) that builds or substantially renovates a residential complex, or that builds an addition to a multi-unit residential complex, in order to lease it (in whole or in part) or to live in it, is considered to be both the seller and the purchaser of the residential complex or the addition to the multi-unit residential complex. 

The builder is deemed to have made a self-supply of the residential complex or of the addition to the multi-unit residential complex. In this case, the builder must, as a rule, remit the taxes deemed collected and calculated on the fair market value (This link will open a new window) of the complex or the addition.

The taxes paid on the construction or substantial renovations, as well as any un-recovered taxes paid on the acquisition of the land included in the residential complex, may give entitlement to an ITC and ITR, provided the builder is a registrant (This link will open a new window). If the builder is not a registrant, a tax rebate may be granted under certain conditions. 

In addition, to recover a portion of the taxes paid on the self-supply, the builder can claim a new residential rental property rebate for the GST and the QST paid using form FP-524-V, New Residential Rental Property GST Rebate Application, and form VD-370.67-V, New Residential Rental Property QST Rebate.

For more information, see Construction or Renovation of Residential Complexes, Residential Complexes and New or Substantially Renovated Residential Rental Property.

Sale of a new residential complex or new residential rental property 

A builder who sells a new residential complex or a residential complex to which the builder has made substantial renovations, other than new residential rental property, to an individual can usually pay or credit the amount of the GST and QST rebate granted for a new residential complex to the individual. In these cases, the individual and the builder must complete form FP-2190.C-V, GST-QST New Housing Rebate Application: Rebate Granted by a Builder. The builder must then send it to Revenu Québec along with the GST and QST returns for the reporting period in which the builder paid or credited the rebate to the individual.

In the case of new residential rental property, the builder cannot pay or credit the individual the amount of the GST and QST rebate. The individuals can claim this rebate using form FP-524-V, New Residential Rental Property GST Rebate Application, and form VD-370.67-V, New Residential Rental Property QST Rebate.

For more information, see Residential Complexes, New or Substantially Renovated Housing and New or Substantially Renovated Residential Rental Property.

Lease of a residential complex built for the purpose of being sold

A builder registered for the QST that leases for residential purposes a single-unit residential complex or a residential unit held in co-ownership that he or she built in order to sell is deemed to have made a self-supply of the complex. 

The builder can elect not to include the QST deemed collected in his or her net tax for the period in which the self-supply was made. To make this election, the builder must file form VD-224.1-V, Election Respecting the Self-Supply of a Residential Complex, with Revenu Québec. Payment of the QST can be deferred for a period of up to 12 months.

Note there is no such election under the GST system.

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 percentages Year(s) Percentage 2017 66.1 2018 65.8 2019 65.5 2020 and subsequent years 65.2

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.

On June 1, 2015, the rate of the tax credit for the acquisition of shares issued by Fondaction was set at 20% for any eligible share acquired after May 31, 2015, and before June 1, 2016.

In the Budget Speech delivered on March 17, 2016, the Minister of Finance of Québec announced that the rate of the tax credit would be maintained at 20% for any eligible share acquired after May 31, 2016, and before June 1, 2018. Accordingly, for 2016, if an employee has authorized you to withhold an amount from his or her pay for the purchase of shares issued by Fondaction, you must use the 20% rate to calculate the amount of income tax to withhold.

If you use the source deduction table to determine the amount of income tax to withhold, you must, for any pay period during which Fondaction shares were purchased, subtract, from the remuneration paid to the employee, 100% of the amount deducted from the employee's remuneration for the purchase of such shares.

If you use the formulas, you must, for any pay period during which Fondaction shares were purchased, subtract, from the income tax payable for the year, 20% of the amount deducted from the employee's remuneration for the purchase of such shares.

On June 1, 2015, the rate of the tax credit for the acquisition of shares issued by Fondaction was set at 20% for any eligible share acquired after May 31, 2015, and before June 1, 2016.

In the Budget Speech delivered on March 17, 2016, the Minister of Finance of Québec announced that the rate of the tax credit would be maintained at 20% for any eligible share acquired after May 31, 2016, and before June 1, 2018. Accordingly, for 2016, if an employee has authorized you to withhold an amount from his or her pay for the purchase of shares issued by Fondaction, you must use the 20% rate to calculate the amount of income tax to withhold.

If you use the source deduction table to determine the amount of income tax to withhold, you must, for any pay period during which Fondaction shares were purchased, subtract, from the remuneration paid to the employee, 100% of the amount deducted from the employee's remuneration for the purchase of such shares.

If you use the formulas, you must, for any pay period during which Fondaction shares were purchased, subtract, from the income tax payable for the year, 20% of the amount deducted from the employee's remuneration for the purchase of such shares.

On June 1, 2015, the rate of the tax credit for the acquisition of shares issued by Fondaction was set at 20% for any eligible share acquired after May 31, 2015, and before June 1, 2016.

In the Budget Speech delivered on March 17, 2016, the Minister of Finance of Québec announced that the rate of the tax credit would be maintained at 20% for any eligible share acquired after May 31, 2016, and before June 1, 2018. Accordingly, for 2016, if an employee has authorized you to withhold an amount from his or her pay for the purchase of shares issued by Fondaction, you must use the 20% rate to calculate the amount of income tax to withhold.

If you use the source deduction table to determine the amount of income tax to withhold, you must, for any pay period during which Fondaction shares were purchased, subtract, from the remuneration paid to the employee, 100% of the amount deducted from the employee's remuneration for the purchase of such shares.

If you use the formulas, you must, for any pay period during which Fondaction shares were purchased, subtract, from the income tax payable for the year, 20% of the amount deducted from the employee's remuneration for the purchase of such shares.

On June 1, 2015, the rate of the tax credit for the acquisition of shares issued by Fondaction was set at 20% for any eligible share acquired after May 31, 2015, and before June 1, 2016.

In the Budget Speech delivered on March 17, 2016, the Minister of Finance of Québec announced that the rate of the tax credit would be maintained at 20% for any eligible share acquired after May 31, 2016, and before June 1, 2018. Accordingly, for 2016, if an employee has authorized you to withhold an amount from his or her pay for the purchase of shares issued by Fondaction, you must use the 20% rate to calculate the amount of income tax to withhold.

If you use the source deduction table to determine the amount of income tax to withhold, you must, for any pay period during which Fondaction shares were purchased, subtract, from the remuneration paid to the employee, 100% of the amount deducted from the employee's remuneration for the purchase of such shares.

If you use the formulas, you must, for any pay period during which Fondaction shares were purchased, subtract, from the income tax payable for the year, 20% of the amount deducted from the employee's remuneration for the purchase of such shares.

On June 1, 2015, the rate of the tax credit for the acquisition of shares issued by Fondaction was set at 20% for any eligible share acquired after May 31, 2015, and before June 1, 2016.

In the Budget Speech delivered on March 17, 2016, the Minister of Finance of Québec announced that the rate of the tax credit would be maintained at 20% for any eligible share acquired after May 31, 2016, and before June 1, 2018. Accordingly, for 2016, if an employee has authorized you to withhold an amount from his or her pay for the purchase of shares issued by Fondaction, you must use the 20% rate to calculate the amount of income tax to withhold.

If you use the source deduction table to determine the amount of income tax to withhold, you must, for any pay period during which Fondaction shares were purchased, subtract, from the remuneration paid to the employee, 100% of the amount deducted from the employee's remuneration for the purchase of such shares.

If you use the formulas, you must, for any pay period during which Fondaction shares were purchased, subtract, from the income tax payable for the year, 20% of the amount deducted from the employee's remuneration for the purchase of such shares. 

A temporary refundable tax credit has been established to support the implementation and maintenance of major digital transformation projects in Québec.

The tax credit applies to eligible digitization contracts entered into after March 17, 2016, and before January 1, 2019, and is intended to encourage the implementation of projects that create in Québec at least 500 jobs that must be maintained for a period of seven years. 

The tax credit is equal to 24% of the qualified wages paid by a corporation to an eligible employee under an eligible digitization contract over a two-year period, up to a maximum of $20,000 per employee each year.

Investissement Québec must issue a certificate in respect of the contract for it to be considered an eligible digitization contract.

For more information, see pages A.59 to A.67 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Under Québec fiscal legislation, a taxpayer that is a corporation or an individual, including a trust, is required to pay income tax for a taxation year equal to 10% of: 

• the taxpayer's income from logging operations for the year; and 
• the taxpayer's share in the income of a partnership carrying on logging operations of which the taxpayer is a member, for the partnership's fiscal period that ends in the year.

Previously, a taxpayer was not required to pay the logging tax for a taxation year if: 

• the taxpayer's income from logging operations was $10,000 or less for the year; or
• the taxpayer's share in the income of a partnership carrying on logging operations of which the taxpayer is a member was $10,000 or less for the partnership's fiscal period that ends in the year.

However, on March 17, 2016, the logging tax exemption was raised from $10,000 to $65,000 for a taxation year of a taxpayer beginning after that date.

For more information, see page A.99 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

The tax credit relating to information technologies in small and medium-sized businesses has been enhanced in two ways. First, the eligibility criteria for the tax credit have been broadened to include corporations doing business in the wholesale and retail sectors. Second, the threshold amount of paid-up capital of a qualified corporation at which the tax credit rate falls to zero has been increased to $50 million.

Eligibility of corporations doing business in the wholesale and retail sectors

Fiscal legislation has been amended so that a corporation can claim the tax credit relating to information technologies for a taxation year in which the proportion of its eligible activities (manufacturing and processing activities, primary sector activities, and activities in the wholesale and retail sectors) for purposes of the tax credit is greater than 50%.

The proportion of eligible activities of a qualified corporation for a taxation year for purposes of the tax credit is calculated as follows: the salaries or wages incurred by the corporation in respect of its employees whose duties consist of manufacturing or processing activities, primary sector activities, or activities in the wholesale or retail sectors, divided by the salaries or wages incurred by the corporation in respect of all its employees.

This change applies in respect of a taxation year of a corporation ending after March 17, 2016, but only to expenditures related to the supply of a qualified management software package incurred after March 17, 2016, and before January 1, 2020, under an information technology integration contract the negotiation of which began after March 17, 2016, and before January 1, 2020, and in respect of which Investissement Québec has issued a certificate.

For more information, see pages A.57 and A.58 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Increase in the threshold amount of paid-up capital

Fiscal legislation has been amended so that the 20% rate of the tax credit relating to information technologies that a qualified corporation can claim for a taxation year will not be reduced if the corporation's paid-up capital for that year is $35 million or less.

That rate is reduced linearly for a taxation year if the paid-up capital of a qualified corporation is more than $35 million; it falls to zero if the qualified corporation's paid-up capital totals $50 million or more. Thus, a qualified corporation that has $50 million or more in paid-up capital for a taxation year cannot benefit from the tax credit.

This change applies in respect of a taxation year of a corporation ending after March 17, 2016.

For more information, see page A.58 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.

Fiscal legislation will be amended to provide that contributions made illegally or otherwise, directly or indirectly, for political purposes are not deductible in calculating a taxpayer's income from a business or property.

This change will apply to contributions made for political purposes after March 17, 2016. 

For more information, see pages A.72 and A. 73 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Effective as of the 2018 taxation year, the age of eligibility for the tax credit for experienced workers will be lowered to 62 years of age, the average retirement age of Quebecers. For this new category of workers, the maximum amount of eligible work income on which the tax credit will be calculated is $4,000.

For more information, see pages A.24 to A.27 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

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.

Rate increases

The fixed rates used to calculate the maximum amount of the tax credits respecting the work premium for a person living alone and for a couple without children were increased by two percentage points, effective 2016. The rate increased from 7% to 9%, in the case of the work premium, and from 9% to 11%, in the case of the adapted work premium for households whose capacity for employment is severely limited. 

For 2016, the maximum amount for the work premium increases from $564.48 to $725.76 for a person living alone and from $881.30 to $1,133.10 for a couple without children. The adapted work premium increases from $1,094.94 to $1,338.26 for a person living alone and from $1,641.96 to $2,006.84 for a couple without children. 

Advance payment requests from recipients of last-resort financial assistance

Beginning on January 1, 2017, the Ministère du Travail, de l'Emploi et de la Solidarité sociale will receive requests for advance payments from recipients of last-resort financial assistance and determine the payment amounts.

For more information, see pages A.18 to A.21 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Effective August 1, 2016, the municipal tax for 9-1-1 service for each telephone service will be $0.46 a month per telephone number or, in the case of a multi-line service other than a Centrex service, per outgoing access line.

Effective August 1, 2016, the municipal tax for 9-1-1 service for each telephone service will be $0.46 a month per telephone number or, in the case of a multi-line service other than a Centrex service, per outgoing access line.

Effective August 1, 2016, the municipal tax for 9-1-1 service for each telephone service will be $0.46 a month per telephone number or, in the case of a multi-line service other than a Centrex service, per outgoing access line.

Effective August 1, 2016, the municipal tax for 9-1-1 service for each telephone service (This link will open a new window) will be $0.46 a month per telephone number or, in the case of a multi-line service (This link will open a new window) other than a Centrex service, per outgoing access line.