On January 25, 2017, Revenu Québec posted the following announcement on their website:
Management fees billed between related corporations qualify as operating expenses if the following conditions are met:
As a rule, if management fees are denied as operating expenses for one corporation, we will not subtract an amount equal to the fees from the income of the related corporation that provided the management services.
What this means, essentially, is that Quebec will double-tax amounts it deems not to meet these conditions.
Please consult your Crowe BGK advisor to help you examine and analyze any management fees that may run afoul of these rules.
About the Author:
Sam Lackman, CPA, CA, is a Senior Tax Manager at Crowe BGK.
Connect with him: email@example.com