Revenu Québec Infos

Starting July 1, 2015, the GST and QST will no longer apply to products marketed exclusively for feminine hygiene purposes. The supply of sanitary napkins, tampons, sanitary belts, menstrual cups or other similar products will be zero-rated. The GST and QST will continue to apply, however, to the supply of deodorants, douches, sprays, syringes and feminine wipes.

Starting July 1, 2015, the GST and QST will no longer apply to products marketed exclusively for feminine hygiene purposes. The supply of sanitary napkins, tampons, sanitary belts, menstrual cups or other similar products will be zero-rated. The GST and QST will continue to apply, however, to the supply of deodorants, douches, sprays, syringes and feminine wipes.

The Act respecting the sectoral parameters of certain fiscal measures will be amended to provide that, in order to obtain a qualification certificate for purposes of the refundable tax credits designed to promote the creation of new financial services corporations, a corporation must show that none of its activities is the continuation, in whole or in part, of an activity previously engaged in by another person or a partnership.

Also, a corporation that has a valid qualification certificate for purposes of the above-mentioned tax credits will have to show the Minister of Finance that all the activities it carried on throughout the taxation year or the part of the taxation year (as applicable) for which an application for a certificate is made constitute activities that were not previously engaged in by another person or a partnership. Otherwise, an annual certificate will not be issued.

The amendments to the Act will be declaratory in nature.

For more information, see pages A.110 to A.112 of the document entitled Additional Information 2015-2016 (PDF – 1.96 MB), published by the Ministère des Finances.

The tax credit for Québec film productions (referred to in the Budget Speech as the refundable tax credit for Québec film and television production) will be reorganized so that a higher basic rate will apply in respect of a film, including a television program, that is not developed from a foreign concept or a foreign format.

New class of eligible films

The Act respecting the sectoral parameters of certain fiscal measures (hereinafter the "sectoral act") will be amended to introduce a new class of films. That class will include any film that is already eligible for the basic tax credit under the current rules and that is developed from a foreign concept or a foreign format.

This amendment will apply to film and television productions for which an application for an advance ruling or, where no such application has previously been filed in respect of the production, for which an application for a certificate is filed with the Société de développement des entreprises culturelles (SODEC) after March 26, 2015.

Increase in the basic rates

In addition, tax legislation will be amended to provide for an increase in the basic rates of the tax credit for Québec film productions in respect of eligible films that are not adapted from a foreign format.

Moreover, the current basic rates will continue to apply in respect of eligible films that are adapted from a foreign format. The various increases will remain the same in respect of all eligible films.

This amendment will apply to film and television productions for which an application for an advance ruling or, where no such application has previously been filed in respect of the production, for which an application for a certificate is filed with SODEC after March 26, 2015.

Other amendments

Furthermore, tax legislation and the sectoral act will be amended to restore the former rules pertaining to the criterion of "non-arm's length," thereby replacing the rules pertaining to the criterion of "associated corporations." Consequential amendments relating to the tax credit for film production services will also be made to tax legislation and the sectoral act.

With regard to corporations, the amendments to tax legislation will apply to labour expenditures or production costs, as the case may be, incurred in a taxation year that begins after March 26, 2015.

Also with regard to corporations, the amendments to the sectoral act will apply to taxation years that begin after March 26, 2015.

For more information, see pages A.84 to A.90 of the document entitled Additional Information 2015-2016 (PDF – 1.96 MB), published by the Ministère des Finances.

Tax legislation will be amended to restore the former parameters and eliminate the end date of the tax credit for the production of multimedia events or environments presented outside Québec (referred to in the Budget Speech as the tax credit for the production of multimedia environments or events staged outside Québec):

• The tax credit rate applicable to qualified labour expenditures will be 35%.
• The maximum tax credit in respect of a qualified production will be $350,000.
• The tax credit will also apply to qualified labour expenditures incurred after December 31, 2015.

The amendments relating to the tax credit rate and the maximum tax credit will apply to qualified productions for which an application for an advance ruling or, where no such application has previously been filed in respect of the production, for which an application for a certificate is filed with the Société de développement des entreprises culturelles (SODEC) after March 26, 2015.

For more information, see page A.94 of the document entitled Additional Information 2015-2016 (PDF – 1.96 MB), published by the Ministère des Finances.

Tax legislation will be amended to restore the former rate of 35% applicable to labour expenditures that qualify for the tax credit for the production of sound recordings (referred to in the Budget Speech as the refundable tax credit for sound recording production).

This amendment will apply to qualified property for which an application for an advance ruling or, where no such application has previously been filed in respect of the property, for which an application for a certificate is filed with the Société de développement des entreprises culturelles (SODEC) after March 26, 2015.

For more information, see pages A.90 and A.91 of the document entitled Additional Information 2015-2016 (PDF – 1.96 MB), published by the Ministère des Finances.

A number of changes will be made to the tax credit for the development of e-business (hereinafter the "TCEB") and a new non-refundable tax credit will be established.

Elimination of the end date of the TCEB

Tax legislation will be amended to eliminate the end date of the TCEB, which was supposed to be December 31, 2025. Consequently, a qualified corporation will still be able to claim the TCEB in respect of qualified wages it incurs after December 31, 2025, subject to the other conditions that apply.

Exclusion of wages relating to certain government contracts

Tax legislation will be amended to exclude from an employee's qualified wages, for purposes of the TCEB, any portion of the wages attributable to the employee's duties in carrying out work under an agreement entered into by the employer and a government entity.

This amendment will apply to wages that are incurred after September 30, 2015, by a qualified corporation in respect of an eligible employee and that are attributable to the employee's duties in carrying out work under an agreement with a government entity that is entered into, renewed or extended after that date.

Changes made to the concept of e-business related activities and to the criterion of "services supplied"

The Act respecting the sectoral parameters of certain fiscal measures (hereinafter the "sectoral act") will be amended to add the following particulars:

• Activities must be primarily related to e-business to be eligible for the TCEB.
• Activities carried out by a qualified corporation's employees are not to be considered related to e-business where the results of the activities are integrated into property intended for sale or are used to operate such property.
• Where the results of activities carried out by a qualified corporation's employees are integrated into property intended for sale or are used to operate such property, the gross income from such activities is not to be considered for purposes of the criterion relating to "services supplied," which must be met by the corporation to qualify for the TCEB.

With regard to qualified corporations, these amendments will apply to taxation years that begin after March 26, 2015.

Establishment of a non-refundable tax credit for the development of e-business

The overall level of tax assistance for e-business development activities will be restored to 30%, by adding to the current rate of 24% for the TCEB a new non-refundable tax credit whose rate will be 6%.

All the conditions in the sectoral act that apply to the TCEB will apply to the non-refundable tax credit. Also, for a taxation year, the certificates used for purposes of the TCEB will also be used for purposes of the new non-refundable tax credit.

Similarly, all the conditions in tax legislation that apply to the TCEB will apply to the non-refundable tax credit, subject to the rules for determining the amount of the new tax credit, which cannot be greater than $5,000 per employee, calculated on an annual basis.

Furthermore, a qualified corporation will be able to carry back over the three preceding taxation years or carry forward over the following 20 taxation years the portion of the tax credit that did not reduce its income tax payable for the taxation year to which the tax credit relates. However, no carry-over is possible in respect of either a taxation year for which the corporation is not entitled to the TCEB or a taxation year ending before March 27, 2015.

These amendments will apply to wages incurred after March 26, 2015, by a qualified corporation in respect of an eligible employee.

For more information, see pages A.80 to A.84 of the document entitled Additional Information 2015-2016 (PDF – 1.96 MB), published by the Ministère des Finances.

Various amendments will be made to the legislation establishing the following tax-advantaged funds:

• Fonds de solidarité FTQ
• Fondaction
• Capital régional et coopératif Desjardins

For more information, see pages A.62 to A.72 of the document entitled Additional Information 2015-2016 (PDF – 1.96 MB), published by the Ministère des Finances.

To encourage individuals to join or remain in the workforce, a new refundable tax credit, called the tax shield, has been created. This new tax credit will be implemented as of the 2016 taxation year. 

The purpose of the tax shield is to offset, further to an increase in work income, a part of the loss of the socio-fiscal transfers designed specifically to incentivize work, specifically the refundable tax credit attributing a work premium (the work premium or the adapted work premium) and the tax credit for childcare expenses.

The part of the tax shield respecting the work premium tax credit could reach $375 for a couple. The part of the tax shield respecting the tax credit for childcare expenses could represent an increase of a few percentage points in the rate of this tax credit. 

For more information, see pages A.12 to A.16 of the document Additional Information 2015-2016 (PDF – 1.96 MB) as well as pages B.19 to B.24 of the The Québec Economic Plan (PDF – 10,7 MB) published by the Ministère des Finances.

On June 1, 2015, the tax on lodging increases from $2 to $3 per overnight stay in the Chaudière-Appalaches tourism region. The tax on lodging applies at a rate of $3 per overnight stay if the accommodation unit supplied is billed and occupied after May 31, 2015. 

For more information, see the transitional rules that apply in the Chaudière-Appalaches tourism region. 

Several changes will be made to the tax credit for workers 65 or older as of the 2016 taxation year.

The changes will:

• lower the age of eligibility for the tax credit from 65 to 63 over a period of two years
• gradually increase the maximum amount of eligible work income on which the tax credit is calculated until it reaches $10,000 for all workers 65 or older, and
• make the tax credit reducible based on work income

For more information, see pages A.6 to A.12 of the document entitled Additional Information 2015-2016 (PDF – 1.96 MB), published by the Ministère des Finances.

Starting in 2016, the age at which you become eligible for the age amount will gradually be raised until it reaches 70. For 2020 and all subsequent taxation years, the eligibility age will remain 70.

For more information, see page A.16 of the document entitled Additional Information 2015-2016 (PDF – 1.96 MB), published by the Ministère des Finances.

Fiscal legislation will be amended to raise both the base rates and the increased rates of the tax credit for an on-the-job training period such that

• the base rate will increase from 24% to 40% where the eligible taxpayer is a corporation, and from 12% to 20% where the eligible taxpayer is an individual;
• the increased rate will increase from 32% to 50% where the eligible trainee is a person with a disability, and from 16% to 25% where the eligible trainee is an immigrant.

An eligible taxpayer in a given taxation year will be able to take advantage of the increase in the tax credit rates where the following conditions are met:

• the eligible trainee is a student trainee;
• the taxation year is at least the third consecutive taxation year for which the taxpayer is entitled to the tax credit in respect of a student trainee (or, if the taxpayer claiming the tax credit is doing so as a member of a qualified partnership, the fiscal period of the partnership ending in the taxation year is at least the third consecutive fiscal period for which the partnership incurred a qualified expenditure in respect of a student trainee);
• a qualified expenditure of the eligible taxpayer or the eligible partnership of which the taxpayer is a member, as the case may be, incurred in respect of a student trainee reached $2,500 for each of the three consecutive taxation years or more, or for each of the three consecutive fiscal periods or more, referred to in the previous paragraph.

These amendments will apply in respect of a qualified expenditure incurred after March 26, 2015, relative to an eligible training period beginning after that date.

For more information, see pages A.51 to A.52 of the document entitled Additional Information 2015-2016 (PDF – 1.96 MB) published by the Ministère des Finances.

Since June 4, 2014, Investissement Québec has not been able to accept applications for a certificate in connection with an information technology (IT) integration contract for purposes of the above-mentioned tax credit (referred to in the Budget Speech as the refundable tax credit for the integration of IT in manufacturing SMBs). The Act respecting the sectoral parameters of certain fiscal measures will be amended so that Investissement Québec can accept such applications filed after March 26, 2015, and before January 1, 2020.

Two-year extension of the tax credit

Tax legislation will be amended to extend for two years the tax credit relating to information technologies in small and medium-sized manufacturing businesses.

Reduction of the level of assistance

Furthermore, the tax credit rate, for a taxation year, will be 20% for a qualified corporation whose paid-up capital for the year is $15 million or less. The rate will be reduced linearly and reach zero for any qualified corporation whose paid-up capital for the year is $20 million or more.

Eligibility of primary sector corporations

In addition, tax legislation will be amended so that the term "qualified manufacturing or private sector corporation" means, for a taxation year, a qualified corporation whose proportion of manufacturing or processing activities and primary sector activities for the taxation year is more than 50%.

Activities attributable to agriculture, forestry, fishing, hunting, mining, quarrying, and oil and gas extraction will be considered primary sector activities.

Effective date

These amendments will apply to expenditures relating to the supply of a qualified management software package that are incurred after March 26, 2015, and before January 1, 2020, under an IT integration contract the negotiation of which began after March 26, 2015, and before January 1, 2020, and in respect of which Investissement Québec has issued a certificate.

For more information, see pages A.53 to A.56 of the document entitled Additional Information 2015-2016 (PDF – 1.96 MB), published by the Ministère des Finances.

For purposes of the goods and services tax (GST) and the Québec sales tax (QST), certain persons may jointly elect to have the taxable supplies made between them (with certain exceptions) deemed to have been made for no consideration.

Effective January 1, 2015, persons that wish to make such an election must complete form FP-4616-V, Election or Revocation of an Election to Have Certain Taxable Supplies Made Between Specified Members Deemed Made for No Consideration, and send it to us on or before the earliest of the dates by which the members making the election must file their GST and QST returns for the period that includes the effective date of the election. Previously, the election form did not have to be sent to Revenu Québec.

A group of more than two persons that wishes to make such an election between all members of the group can complete a single copy of form FP-4616-V. Only one member of the group has to sign the election form and send it to Revenu Québec.

Election already in effect before January 1, 2015

Persons whose election was in effect before January 1, 2015, that would like the election to remain in effect must make the election again, by completing form FP-4616-V and sending it to us before January 1, 2016. Neither the original election nor its effective date will change.

Where the effective dates of the elections made by members of a group of more than two persons are different, the group may

• complete a separate copy of form FP-4616-V for each effective date and send all copies of the form to us, or
• complete a single copy of form FP-4616-V, entering the effective date of December 31, 2014, and send it to us.

If the group chooses the second option, each member of the group must keep in its accounting records the copy of either form FP-25-V, form VD-336-V or form FP-2025-V that was previously completed and shows the original date of the election.

For purposes of the goods and services tax (GST) and the Québec sales tax (QST), certain persons may jointly elect to have the taxable supplies made between them (with certain exceptions) deemed to have been made for no consideration.

Effective January 1, 2015, persons that wish to make such an election must complete form FP-4616-V, Election or Revocation of an Election to Have Certain Taxable Supplies Made Between Specified Members Deemed Made for No Consideration, and send it to us on or before the earliest of the dates by which the members making the election must file their GST and QST returns for the period that includes the effective date of the election. Previously, the election form did not have to be sent to Revenu Québec.

A group of more than two persons that wishes to make such an election between all members of the group can complete a single copy of form FP-4616-V. Only one member of the group has to sign the election form and send it to Revenu Québec.

Election already in effect before January 1, 2015

Persons whose election was in effect before January 1, 2015, that would like the election to remain in effect must make the election again, by completing form FP-4616-V and sending it to us before January 1, 2016. Neither the original election nor its effective date will change.

Where the effective dates of the elections made by members of a group of more than two persons are different, the group may

• complete a separate copy of form FP-4616-V for each effective date and send all copies of the form to us, or
• complete a single copy of form FP-4616-V, entering the effective date of December 31, 2014, and send it to us.

If the group chooses the second option, each member of the group must keep in its accounting records the copy of either form FP-25-V, form VD-336-V or form FP-2025-V that was previously completed and shows the original date of the election.

For purposes of the goods and services tax (GST) and the Québec sales tax (QST), certain persons may jointly elect to have the taxable supplies made between them (with certain exceptions) deemed to have been made for no consideration.

Effective January 1, 2015, persons that wish to make such an election must complete form FP-4616-V, Election or Revocation of an Election to Have Certain Taxable Supplies Made Between Specified Members Deemed Made for No Consideration, and send it to us on or before the earliest of the dates by which the members making the election must file their GST and QST returns for the period that includes the effective date of the election. Previously, the election form did not have to be sent to Revenu Québec.

A group of more than two persons that wishes to make such an election between all members of the group can complete a single copy of form FP-4616-V. Only one member of the group has to sign the election form and send it to Revenu Québec.

Election already in effect before January 1, 2015

Persons whose election was in effect before January 1, 2015, that would like the election to remain in effect must make the election again, by completing form FP-4616-V and sending it to us before January 1, 2016. Neither the original election nor its effective date will change.

Where the effective dates of the elections made by members of a group of more than two persons are different, the group may

• complete a separate copy of form FP-4616-V for each effective date and send all copies of the form to us, or
• complete a single copy of form FP-4616-V, entering the effective date of December 31, 2014, and send it to us.

If the group chooses the second option, each member of the group must keep in its accounting records the copy of either form FP-25-V, form VD-336-V or form FP-2025-V that was previously completed and shows the original date of the election.

Tax legislation will be amended to make changes to the above-mentioned tax credit (referred to in the Budget Speech as the tax credit for investments relating to manufacturing and processing equipment).

Rate adjustments

Tax legislation will be amended to reduce, by 8%, the increased rate of the tax credit for investment that applies in respect of qualified property acquired for use primarily in

• a remote zone;
• the eastern part of the Bas-Saint-Laurent administrative region; or
• an intermediate zone.

Therefore, the maximum rate of the tax credit that a qualified corporation may claim in respect of qualified property acquired for use primarily in a remote zone will be 24% (the 4% base rate plus a 20% increase in the base rate).

Furthermore, the maximum rate of the tax credit that a qualified corporation may claim in respect of qualified property acquired for use primarily in the eastern part of the Bas-Saint-Laurent administrative region will be 16% (the 4% base rate plus a 12% increase in the base rate).

Likewise, the maximum rate of the tax credit that a qualified corporation may claim in respect of qualified property acquired for use primarily in an intermediate zone will be 8% (the 4% base rate plus a 4% increase in the base rate).

Finally, in view of the 8% reduction in tax assistance, a qualified corporation will no longer be able to claim the tax credit for investment in respect of eligible expenses incurred in another region.

These amendments to tax legislation will apply in respect of eligible expenses incurred after December 31, 2016.

Extension of the tax credit for investment and change in the definition of the term "qualified property" 

Tax legislation will be amended to extend by five years the period in which property must be acquired in order to be considered qualified property for purposes of the tax credit for investment. Thus, property may be considered qualified property if it is acquired before January 1, 2023.

The definition of the term "qualified property" will also be changed so that property acquired after December 31, 2016 (other than property acquired for use primarily in a remote zone, the eastern part of the Bas-Saint-Laurent administrative region or an intermediate zone) will not be considered qualified property for purposes of the tax credit for investment.

For more information, see pages A.48 to A.51 of the document entitled Additional Information 2015-2016 (PDF – 1.96 MB), published by the Ministère des Finances.

The rate of the tax credit for the acquisition of shares issued by Fondaction is changing to 20% for all class A and class B shares acquired after May 31, 2015, and before June 1, 2016. This means that, if an employee has authorized you to withhold an amount from his or her remuneration for the purchase, after May 31, 2015, and before June 1, 2016, of class A or class B shares issued by Fondaction, you must adjust the calculation of that employee's source deductions of income tax.

For more information, refer to document PZ-972-V, Temporary Change in the Rate of the Tax Credit for the Acquisition of Shares Issued by Fondaction.

The rate of the tax credit for the acquisition of shares issued by Fondaction is changing to 20% for all class A and class B shares acquired after May 31, 2015, and before June 1, 2016. This means that, if an employee has authorized you to withhold an amount from his or her remuneration for the purchase, after May 31, 2015, and before June 1, 2016, of class A or class B shares issued by Fondaction, you must adjust the calculation of that employee's source deductions of income tax.

For more information, refer to document PZ-972-V, Temporary Change in the Rate of the Tax Credit for the Acquisition of Shares Issued by Fondaction.