T-0.1, r. 2 - Regulation respecting the Québec sales tax

Section 383r2 Disposition versions

2012-09-01

383R2. For the purposes of the definition of the expression “percentage of government funding” provided for in section 383 of the Act, the prescribed manner consists in determining, in respect of a person for his fiscal year, the percentage that corresponds to the greater of the following percentages:

(1)  the percentage that is equal to:

(a)  for the person’s first fiscal year, zero;

(b)  for the person’s second fiscal year, the percentage that would be determined under subparagraph 2 and the second paragraph if all references therein to “the fiscal year” were replaced by references to “the person’s first fiscal year”; and

(c)  for any other fiscal year, the percentage that would be determined under subparagraph 2 and the second paragraph if all references therein to “the fiscal year” were replaced by references to “the person’s 2 immediately preceding fiscal years”; or

(2)  the percentage determined by the following formula:

[A/(A + B + C - D)] x 100.

For the purposes of that formula:

(1)  A is the amount, if any, by which the total of all amounts, each of which is identified in the annual financial statements of the person for the fiscal year as government funding received or receivable in the fiscal year, depending upon the accounting method used to determine his revenue or funding for the fiscal year, exceeds the total of all government funding that he repaid in the fiscal year or that became receivable before the fiscal year and is not received during the fiscal year;

(2)  B is the total of the following amounts:

(a)  monetary gifts, other than government funding, that the person receives in the fiscal year;

(b)  the total of all amounts each of which is the amount, if any, by which the fair market value, at the time of receipt, of a financial instrument received by the person in the fiscal year exceeds the consideration paid or payable by him, where that value can be readily determined at that time;

(c)  the amount, if any, by which the total referred to in subclause i exceeds the total referred to in subclause ii:

i.  the total of all consideration that becomes due, or is paid without becoming due, in the fiscal year to the person for supplies made by the person, including consideration for a service, or for the use of property, that is provided by the person and to which section 29 of the Act applies, but not including any consideration for supplies of rights to participate in games of chance conducted by the person, supplies deemed under section 60 of the Act to have been made by the person, supplies by way of sale of immovables or capital property of the person, supplies of financial instruments, and supplies deemed under any of sections 209, 286 and 323.1 to 323.3 of the Act to have been made by the person or supplies by the person to which section 290 of the Act applies;

ii.  the total of all amounts paid or credited to recipients in the fiscal year as a reduction in, or a rebate or refund of, all or part of the consideration for supplies that the person made to them;

(d)  the amount, if any, by which the total referred to in subclause i exceeds the total referred to in subclause ii:

i.  the total of all amounts each of which is consideration that becomes due, or is paid without becoming due, to the person in the fiscal year for a supply of a right to participate in a game of chance conducted by the person or for a supply that he is deemed under section 60 of the Act to have made in the fiscal year in respect of a bet;

ii.  the total of all amounts each of which is an amount of money paid or payable by the person as a prize or winnings in the game or in satisfaction of the bet, or is the consideration paid or payable by him for property or a service that is given as a prize or winnings in the game or in satisfaction of the bet;

(3)  C is the total of the following amounts:

(a)  all amounts each of which is an amount of money that is interest or dividends that the person receives in the fiscal year;

(b)  all amounts of money that are distributed in the fiscal year to the person by a trust, otherwise than as a distribution of capital, in respect of the person’s right as a beneficiary, within the meaning of the second paragraph of section 646 of the Taxation Act (chapter I-3), under the trust;

(c)  all amounts that become due, or are paid without becoming due, to the person in the fiscal year in respect of a debt security issued by him to one of the following persons, or a loan granted to him by one of the following persons, but excluding any amount in respect of a loan where the interest on the loan is payable at least annually and is calculated at a rate that would be reasonable, in the circumstances, if the loan had been made between persons dealing with each other at arm’s length;

i.  another person with whom the person was not dealing at arms’s length at the time the loan was granted or the security was issued, as the case may be; or

ii.  another person who is, agreed to become or ceased to be an officer, employee, shareholder, partner or member of the person;

(d)  all consideration that becomes due, or is paid without becoming due, to the person in the fiscal year for an equity security issued by him; and

(e)  all monetary contributions of capital that are received by the person in the fiscal year, other than government funding and amounts referred to in any of clauses a to d; and

(4)  D is the total of the following amounts:

(a)  25% of the total determined for B in this formula determined for the fiscal year; and

(b)  all amounts paid by the person in the fiscal year as repayments of amounts that are included in the total for B or C for the fiscal year, or would be so included if the person had received them in the fiscal year.

O.C. 1607-92, s. 383R2; O.C. 1463-2001, s. 22.