The Minister of Finance, Mr. Eric Girard, tabled on March 21, 2019 the 2019-2020 Quebec budget plan. Here are the main proposed tax measures:
As of the 2019 taxation year, the tax credit for experienced workers will be renamed the tax credit for career extension. The following changes will also be made to the credit:
Adjustment of maximum eligible work income based on worker’s age (in dollars)
Maximum eligible work income above the first $5,000
Age of worker
As of 2019
65 or over
As of 2020-2021, the Drive Green program, which offers incentives to purchase or lease certain electric vehicles and related equipment, will be reviewed. Proposed changes include:
Review of the eligibility requirements for the maximum rebate under the Drive Green program(dollars)
$60,000 to $75,000
$75,000 to $125,000
$125,000 and over
The additional contribution for childcare, which can reach $13.90 per day, calculated over the basic contribution of $8.25 per day, will be eliminated on a gradual basis between 2019 and 2022.
To support SMBs in their efforts to retain experienced workers, the budget provides for the implementation of a measure to reduce the cost of Quebec payroll taxes. It will apply to Québec payroll taxes for workers aged 60 and over.
Eligible businesses will be able to benefit from a tax credit relating to payroll taxes of:
The rate will be reduced linearly for a total payroll between $1 million and the threshold for the reduced rates of employer contribution to the Health Services Fund (HSF).
For the purposes of the refundable tax credit to foster the retention of experienced workers, a qualified corporation will mean a corporation that has an establishment in Québec and carries on a business there, whose paid-up capital, for the preceding year, is less than $15 million and, except where the corporation is a primary and manufacturing sector corporation for the year, whose total remunerated hours, for the year, exceeds 5,000.
These amendments will be applicable in respect of a taxation year that ends after December 31, 2018.
A corporation that carries out a large investment project in Québec may, under certain conditions, claim a tax holiday in respect of the income from its eligible activities relating to the project and a holiday from employer contributions to the HSF regarding the portion of wages paid to its employees that is attributable to the time they devote to such activities.
To further stimulate the carrying out of structuring projects in the designated regions, the capital investment threshold applicable to them will be reduced from $75 million to $50 million.
This change will apply to investment projects for which an application for an initial qualification certificate is filed after March 21, 2019.
This change may also apply to investment projects in respect of which a corporation has already applied for an initial qualification certificate on or before March 21, 2019, but which began to be carried out after March 21, 2019.
Since January 1, 2019, the Act respecting labour standards provides that an employer is required to pay indemnities to certain employees, where they are absent from work to fulfill family obligations or for health reasons.
The Act also provides that tips must be taken into account in determining these new indemnities.
To take into account the new measures, the tax legislation will be amended to provide that the eligible expenses for the refundable tax credit for the reporting of tips will include the portion of these indemnities attributable to tips that were paid in the taxation year or fiscal period, as applicable.
These amendments will apply to indemnities paid after December 31, 2018.
The government intends to amend the tax legislation so as to strengthen the mandatory disclosure mechanism and improve the rules governing the use of nominee contracts. The amendments will be announced at a later date.
Legislative amendments will be made so that businesses on which a penalty has been imposed further to a final assessment for abusive tax avoidance, as well as the promoters of the transactions in question on whom a penalty has been imposed on the same basis, are listed in the register of enterprises ineligible for public contracts.
The Attestation de Revenu Québec will be mandatory for cleaning contracts in the amount of $10,000 or more for public buildings such as:
The Attestation de Revenu Québec will be applicable to persons registered for the QST.
The administrative terms and conditions as well as the information to be provided to Revenu Québec will be specified at a later date.
There is currently inconsistency in the information security dealers and brokers provide to investors.
Therefore, Revenu Québec will establish, in cooperation with the sector, a new tax slip that will make it easier to report financial market transactions.
Changes will be made to the tax on lodging system so that a person operating a digital accommodation platform will henceforth be required to register with Revenu Québec for the purposes of collecting and remitting the tax on lodging.
A person so registered will be required, in respect of any accommodation unit covered by the system rented in a sleeping-accommodation establishment located in a participating tourist region, to collect the 3.5% tax on the price of every overnight stay, render an account of it and remit it in accordance with the existing terms and conditions under the tax on lodging system, where such a unit is supplied through the person’s digital accommodation platform and is billed at a time when the person’s registration is in effect.
These changes will apply after the date on which the bill implementing these measures is assented to.
Isabelle Nadeau, B.C.L., LL.B., LL.M. Tax, is a Partner at Crowe BGK
Connect with her: [email protected]
Jean-François Senécal, LL.B., D. Tax, is a Senior Tax Manager at Crowe BGK
Connect with him: [email protected]
Jianyi Li is a Tax Specialist at Crowe BGK