Revenu Québec Infos

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

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

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

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

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

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

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

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

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

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

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

Environmental studies allowance

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

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

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

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

Refundable duties credit for losses

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

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

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

Application date

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

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

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

Environmental studies allowance

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

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

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

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

Refundable duties credit for losses

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

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

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

Application date

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

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

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

Qualified corporation

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

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

Eligible employee

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

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

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

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

Eligible training

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

Eligible training period

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

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

Recognized educational institution

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

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

Eligible training expenditures

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

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

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

Determination of the refundable tax credit

The refundable tax credit can be claimed by:

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

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

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

Total payroll

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

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

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

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

Qualified corporation

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

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

Eligible employee

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

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

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

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

Eligible training

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

Eligible training period

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

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

Recognized educational institution

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

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

Eligible training expenditures

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

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

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

Determination of the refundable tax credit

The refundable tax credit can be claimed by:

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

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

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

Total payroll

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

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

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

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

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

Qualified corporation

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

Qualified partnership

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

Eligible digital conversion costs

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

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

Qualified wages or salaries

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

Expenditure related to an eligible digital conversion contract

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

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

Calculating the refundable tax credit

The refundable tax credit can be granted to:

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

It is equal to 35% of the lesser of:

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

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

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

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

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

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

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

Qualified corporation

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

Qualified partnership

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

Eligible digital conversion costs

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

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

Qualified wages or salaries

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

Expenditure related to an eligible digital conversion contract

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

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

Calculating the refundable tax credit

The refundable tax credit can be granted to:

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

It is equal to 35% of the lesser of:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Clarifications regarding the income tax holiday

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

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

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

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

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

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

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

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

Application date

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

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

The following changes have been made to the compensation tax:

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

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

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

Adjustment of the compensation tax rate on wages paid

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

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

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

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

Terms of application

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

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

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

The following changes have been made to the compensation tax:

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

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

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

Adjustment of the compensation tax rate on wages paid

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

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

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

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

Terms of application

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

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

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

Eligibility of online-only productions

Tax legislation will be amended to take online-only productions into account. This means that corporations that hold a non-arm's length certificate issued by the Société de développement des entreprises culturelles (SODEC) in respect of a supplier of eligible online video services will be eligible for the tax credit, but only when it comes to eligible films they produce for corporations other than the supplier of online video services with which they are not dealing at arm's length.

This change will apply to film or television productions for which an application for an advance ruling, or an application for a qualification certificate if no application for an advance ruling was previously filed for the production, is filed with the SODEC after March 27, 2018.

Changes to assistance exclusions

To ensure that sources of funding for the cultural sector continue to be complementary, the following assistance will be excluded for the purposes of the refundable tax credit for Québec film production:

• any financial contribution paid by a public body that holds a broadcasting licence issued by the Canadian Radio-television and Telecommunications Commission or a similar foreign licence;
• financial assistance granted by the National Film Board of Canada, and the amount corresponding to the fair market value of assistance granted by that body in the form of property or services.

These changes will apply to assistance paid or granted after March 27, 2018.

Addition of Eurimages

Tax legislation will be amended to add financial assistance granted by Eurimages to the list of excluded assistance for the purposes of the refundable tax credit for Québec film and television production.

This change will apply to financial assistance granted after March 12, 2017.

For more information, see pages A.86 to A.91 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

Eligibility of online-only productions

Tax legislation will be amended to take online-only productions into account. This means that corporations that hold a non-arm's length certificate issued by the Société de développement des entreprises culturelles (SODEC) in respect of a supplier of eligible online video services will be eligible for the tax credit, but only when it comes to eligible films they produce for corporations other than the supplier of online video services with which they are not dealing at arm's length.

This change will apply to film or television productions for which an application for an advance ruling, or an application for a qualification certificate if no application for an advance ruling was previously filed for the production, is filed with the SODEC after March 27, 2018.

Changes to assistance exclusions

To ensure that sources of funding for the cultural sector continue to be complementary, the following assistance will be excluded for the purposes of the refundable tax credit for Québec film production:

• any financial contribution paid by a public body that holds a broadcasting licence issued by the Canadian Radio-television and Telecommunications Commission or a similar foreign licence;
• financial assistance granted by the National Film Board of Canada, and the amount corresponding to the fair market value of assistance granted by that body in the form of property or services.

These changes will apply to assistance paid or granted after March 27, 2018.

Addition of Eurimages

Tax legislation will be amended to add financial assistance granted by Eurimages to the list of excluded assistance for the purposes of the refundable tax credit for Québec film and television production.

This change will apply to financial assistance granted after March 12, 2017.

For more information, see pages A.86 to A.91 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

The refundable tax credit for cellulosic ethanol production in Québec has been extended for five years. The tax credit is now calculated using a fixed rate, and the monthly ceiling on cellulosic ethanol production has been increased.

Extension of the eligibility period

Tax legislation will be amended so that the eligibility period for the refundable tax credit for cellulosic ethanol production in Québec ends on March 31, 2023.

To be included in the eligible production of cellulosic ethanol of a qualified corporation for a particular month, eligible cellulosic ethanol must be produced after March 17, 2011, and before April 1, 2023, and the purchaser must take possession of it in the particular month, before April 1, 2023.

Change to the calculation of the refundable tax credit

Tax legislation will also be amended to provide that the refundable tax credit for cellulosic ethanol production in Québec will be calculated at a fixed rate of $0.16 per litre as of April 1, 2018.

If a qualified corporation's taxation year includes March 31, 2018, the tax credit is calculated in two ways:

• For each of the months in the part of the taxation year that precedes April 1, 2018, the credit must be calculated using the variable rate, taking into account the average monthly market price of ethanol.
• For each of the months in the part of the taxation year that follows March 31, 2018, the credit must be calculated using a fixed rate of $0.16 per litre.

Change to the monthly ceiling on the production of cellulosic ethanol

The monthly ceiling on the production of cellulosic ethanol for a qualified corporation increased on April 1, 2018. For a particular month beginning after March 31, 2018, it is calculated by multiplying 821,917 litres by the number of days in the particular month.

If a qualified corporation's taxation year includes March 31, 2018, the corporation's monthly ceiling on the production of cellulosic ethanol for each of the months in the part of the taxation year that precedes April 1, 2018, is calculated by multiplying 109,589 litres by the number of days in the month. Its monthly ceiling on the production of cellulosic ethanol for each of the months in the part of the taxation year that follows March 31, 2018, is calculated by multiplying 821,917 litres by the number of days in the month.

For more information, see pages A.95 to A.98 of Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

The refundable tax credit for cellulosic ethanol production in Québec has been extended for five years. The tax credit is now calculated using a fixed rate, and the monthly ceiling on cellulosic ethanol production has been increased.

Extension of the eligibility period

Tax legislation will be amended so that the eligibility period for the refundable tax credit for cellulosic ethanol production in Québec ends on March 31, 2023.

To be included in the eligible production of cellulosic ethanol of a qualified corporation for a particular month, eligible cellulosic ethanol must be produced after March 17, 2011, and before April 1, 2023, and the purchaser must take possession of it in the particular month, before April 1, 2023.

Change to the calculation of the refundable tax credit

Tax legislation will also be amended to provide that the refundable tax credit for cellulosic ethanol production in Québec will be calculated at a fixed rate of $0.16 per litre as of April 1, 2018.

If a qualified corporation's taxation year includes March 31, 2018, the tax credit is calculated in two ways:

• For each of the months in the part of the taxation year that precedes April 1, 2018, the credit must be calculated using the variable rate, taking into account the average monthly market price of ethanol.
• For each of the months in the part of the taxation year that follows March 31, 2018, the credit must be calculated using a fixed rate of $0.16 per litre.

Change to the monthly ceiling on the production of cellulosic ethanol

The monthly ceiling on the production of cellulosic ethanol for a qualified corporation increased on April 1, 2018. For a particular month beginning after March 31, 2018, it is calculated by multiplying 821,917 litres by the number of days in the particular month.

If a qualified corporation's taxation year includes March 31, 2018, the corporation's monthly ceiling on the production of cellulosic ethanol for each of the months in the part of the taxation year that precedes April 1, 2018, is calculated by multiplying 109,589 litres by the number of days in the month. Its monthly ceiling on the production of cellulosic ethanol for each of the months in the part of the taxation year that follows March 31, 2018, is calculated by multiplying 821,917 litres by the number of days in the month.

For more information, see pages A.95 to A.98 of Additional Information 2018-2019 (PDF – 3.73 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%.

In the Budget Speech delivered on March 27, 2018, the Minister of Finance of Québec announced that the rate of the tax credit would be maintained at 20% for all eligible shares acquired after May 31, 2018, but before June 1, 2021. Therefore, if an employee has authorized you to withhold an amount from his or her pay for the purchase, after May 31, 2018, of class A or B Fondaction shares, you must use the 20% rate to calculate the amount of income tax to withhold for any pay period during which such shares were purchased.

If you use the Source Deduction Table for Québec Income Tax (TP-1015.TI-V) to determine the amount of income tax to withhold, you must subtract from the remuneration paid to the employee 100% of the amount deducted for the purchase, after May 31, 2018, of class A or B Fondaction shares.

However, if you use the formulas in the guide Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V), you must subtract from the income tax payable for the year 20% of the amount deducted for the purchase, after May 31, 2018, of class A or B Fondaction shares.

On June 1, 2015, the rate of the tax credit for the acquisition of shares issued by Fondaction was set at 20%.

In the Budget Speech delivered on March 27, 2018, the Minister of Finance of Québec announced that the rate of the tax credit would be maintained at 20% for all eligible shares acquired after May 31, 2018, but before June 1, 2021. Therefore, if an employee has authorized you to withhold an amount from his or her pay for the purchase, after May 31, 2018, of class A or B Fondaction shares, you must use the 20% rate to calculate the amount of income tax to withhold for any pay period during which such shares were purchased.

If you use the Source Deduction Table for Québec Income Tax (TP-1015.TI-V) to determine the amount of income tax to withhold, you must subtract from the remuneration paid to the employee 100% of the amount deducted for the purchase, after May 31, 2018, of class A or B Fondaction shares.

However, if you use the formulas in the guide Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V), you must subtract from the income tax payable for the year 20% of the amount deducted for the purchase, after May 31, 2018, of class A or B Fondaction shares.

The refundable tax credit for the production of ethanol in Québec has been extended for five years. Moreover, to simplify the application of the tax credit and improve the predictability of the assistance qualified corporations can receive, a fixed rate will be used to calculate the tax credit. The monthly ceiling on the production of ethanol will also be raised.

Extension of the eligibility period

Tax legislation will be amended so that the eligibility period for the refundable tax credit for the production of ethanol in Québec ends on March 31, 2023.

Change to the calculation of the refundable tax credit

Tax legislation will also be amended to provide that the refundable tax credit for the production of ethanol in Québec will be calculated at a fixed rate of $0.03 per litre as of April 1, 2018.

If a qualified corporation's taxation year includes March 31, 2018, the tax credit is calculated in two ways:

• For eligible production of ethanol for each of the months in the part of the taxation year that precedes April 1, 2018, the variable rate for each of these months applies, taking into account the average monthly price of crude oil.
• For eligible production of ethanol for each of the months in the part of the taxation year that follows March 31, 2018, a fixed rate of $0.03 per litre applies.

Change to the monthly ceiling on the production of ethanol

The monthly ceiling on the production of ethanol for a qualified corporation increased on April 1, 2018, so that, for a particular month beginning after March 31, 2018, it is calculated by multiplying 821,917 litres by the number of days in the particular month.

If a qualified corporation's taxation year includes March 31, 2018, the corporation's monthly ceiling on the production of ethanol for each of the months in the part of the taxation year that precedes April 1, 2018, is calculated by multiplying 345,205 litres by the number of days in the month. Its monthly ceiling on the production of ethanol for each of the months in the part of the taxation year that follows March 31, 2018, is calculated by multiplying 821,917 litres by the number of days in the month.

For more information, see pages A.93 to A.95 of Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.