I-3 - Taxation Act

Section 1029.8.36.0.0.10 Disposition versions

2022-06-03

1029.8.36.0.0.10. In this division,

“eligible employee” of an individual, a corporation or a partnership means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“eligible individual” means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means, subject to the second paragraph, the aggregate of the following amounts, but does not include any amount relating to the broadcasting or promotion of the property: 

(a)  the salaries or wages directly attributable to the production of the property that are incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in relation to the stages of production of the property, from the preproduction stage to the performance before an audience, or in relation to another stage of production of the property carried out after the performance before an audience within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation to its eligible employees; and

(b)  the portion of the remuneration, other than salary or wages, that relates to services rendered to the corporation in relation to the production of the property and that is related to the stages of production of the property provided for in paragraph a, that is incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, and that is paid by the corporation

i.  to an eligible individual, to the extent that that portion of the remuneration is reasonably attributable to services personally rendered by the eligible individual as part of the production of the property, to the wages of the eligible individual’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by another eligible individual who is an artist subject to the Act respecting the professional status of artists in the visual arts, film, the recording arts, literature, arts and crafts and the performing arts (chapter S-32.1) and to whom that portion of the remuneration is paid again by the eligible individual,

ii.  to a particular corporation having an establishment in Québec, other than a corporation referred to in subparagraph iii, to the extent that that portion of the remuneration is reasonably attributable either to the wages of the particular corporation’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status of artists in the visual arts, film, the recording arts, literature, arts and crafts and the performing arts and to whom that portion of the remuneration is paid again by the particular corporation,

iii.  to a corporation having an establishment in Québec all the issued capital stock of which, except directors’ qualifying shares, belongs to an eligible individual and the activities of which consist principally in the provision of the eligible individual’s services, to the extent that that portion of the remuneration is reasonably attributable to services rendered by the eligible individual as part of the production of the property, or

iv.  to a partnership carrying on a business in Québec and having an establishment therein, to the extent that that portion of the remuneration is reasonably attributable to services rendered, as part of the production of the property, by an eligible individual who is a member of the partnership, to the wages of the partnership’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status of artists in the visual arts, film, the recording arts, literature, arts and crafts and the performing arts and to whom that portion of the remuneration is paid again by the partnership;

“qualified corporation” for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on therein a performance production business that is a qualified business, but does not include

(a)  a corporation that, at any time in the year or during the 24 months preceding the year, is controlled, directly or indirectly in any manner whatever, by one or more persons not resident in Québec;

(a.1)  a corporation that, at any time in the year or during the 24 months preceding the year, would be controlled by a particular person, if each share of the capital stock of a corporation owned by a person not resident in Québec were owned by the particular person;

(b)  a corporation that is exempt from tax for the year under Book VIII; or

(c)  a corporation that is controlled, directly or indirectly in any manner whatever, by one or more corporations that are exempt from tax under Book VIII at any time in the year and whose mission is cultural;

(d)  (subparagraph repealed);

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure of the corporation for the year in respect of the property,

(2)  any repayment made in the year by the corporation, another person or a partnership, as the case may be, pursuant to a legal obligation, of any assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the property, in subparagraph ii or in subparagraph d of the second paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the production of the property, in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, up to 20/7 of the tax under Part III.1.0.4 that the corporation is required to pay in a taxation year preceding the year because of that subparagraph i in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure of the corporation or an amount determined under subparagraph 2, exceeds the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the property, for a taxation year preceding the year, exceeds 20/7 of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a year preceding the year by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance and non-government assistance that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, under subparagraph i of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year,

(2)  the amount of any benefit or advantage that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, to the extent that that amount has not, under subparagraph ii of subparagraph d of the second paragraph, reduced the amount of that labour expenditure of the corporation for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that, for a taxation year preceding the year in respect of the property, is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph b of the definition of “labour expenditure”, to the extent that the amount has not, under subparagraph iii of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  65% of the amount by which the production costs directly attributable to the production of the property that are incurred by the corporation before the end of the year in respect of the property until the performance of the property before an audience or within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation, exceeds the aggregate of

(1)  the amount of any government assistance and non-government assistance attributable to those costs that the corporation or a person or partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, and that the corporation, person or partnership, as the case may be, has not repaid at that time pursuant to a legal obligation, and

(2)  the amount of any benefit or advantage attributable to those costs, that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, exceeds

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the production of the property for a taxation year preceding the year exceeds 20/7 of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a taxation year preceding the year in respect of the production of the property;

“qualified performance” of a corporation means a property that is a performance in respect of which the corporation holds, for one of the following periods, a favourable advance ruling given or a certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  the period covering the stage of pre-production of the property through the end of the first full year after the first performance of the property before an audience;

(b)  the period covering the second full year after the first performance of the property before an audience; or

(c)  the period covering the third full year after the first performance of the property before an audience;

“salary or wages” means the income computed pursuant to Chapters I and II of Title II of Book III.

For the purposes of the definition of “labour expenditure” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of that definition, the salaries or wages directly attributable to the production of a property that is a qualified performance are, where an eligible employee directly undertakes, supervises or supports the production of the property, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the production of the property;

(b)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, except such remuneration paid to a performing artist, or an expenditure as remuneration that is, or may reasonably be considered to be, incurred by a corporation, as a mandatary, on behalf of another person;

(b.1)  despite subparagraph a, in relation to a property that is a circus show, an aquatic show or an ice show in respect of which any of the periods specified in paragraphs a to c of the definition of “qualified performance” in the first paragraph began before 14 March 2008 and had not ended on 13 March 2008, a salary or wages or another remuneration does not include an expenditure that the corporation incurs in respect of the property before

i.  14 March 2008, or

ii.  if it is later, the date included in a period for which a favourable advance ruling has been given or a certificate has been issued by the Société de développement des entreprises culturelles in respect of the property, that is the date from which the Société de développement des entreprises culturelles recognizes the performance as qualifying for the purposes of this division;

(c)  the amount referred to in paragraph a or b of that definition shall be determined by considering, where the salary or wages, or remuneration, as the case may be, relates to the performance of the property before an audience, only the performances that occur in the three years after the first performance of the property before an audience;

(d)  the amount of the labour expenditure of a corporation for a taxation year in respect of a property is to be reduced, where applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds either to the salaries or wages described in paragraph a of that definition or to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, that are included in that labour expenditure of the corporation for the year, and the aggregate of

i.  the amount of any government assistance and non-government assistance attributable to the particular amount that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year,

ii.  the amount of any benefit or advantage attributable to the particular amount that a person or a partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for that year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property, or in any other form or manner, and

iii.  if the particular amount corresponds to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year, that is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in that subparagraph; and

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure for the year in respect of a property is deemed to be nil.

For the purposes of the definitions of “labour expenditure” and “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which any of the three periods in respect of which an amount is deemed to have been paid by the corporation under section 1029.8.36.0.0.11 is completed; and

(b)  an expenditure that would, but for this subparagraph, be a labour expenditure of a corporation for a particular taxation year in respect of a property that is a qualified performance or would constitute production costs directly attributable to the production of such a property, such expenditure being otherwise incurred in the particular year, and that is outstanding at the particular time the corporation first files with the Minister the prescribed form containing prescribed information provided for in the first paragraph of section 1029.8.36.0.0.11 for that particular year, in respect of the property, or, in the absence of such filing with the Minister, on the corporation’s filing-due date for that particular year, is deemed not to be incurred in the particular year and to be incurred in a subsequent taxation year if that expenditure is paid in that subsequent year and after the particular time or after that filing-due date, as the case may be, or in the taxation year that immediately follows that subsequent year and before the time the corporation first files with the Minister that prescribed form for that subsequent year, in respect of the property.

For the purposes of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the production costs directly attributable to the production of a property that is a qualified performance are the following amounts, but do not include however the costs incurred for the broadcasting or promotion of the property:

i.  the portion of the production costs, other than the production fees and administration costs, to the extent that they are included in the production cost, cost or capital cost, as the case may be, of the property to the corporation, and

ii.  the production fees and administration costs;

(b)  the production costs directly attributable to the production of a property that is a qualified performance include the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the production of the property, which corresponds to the portion of the depreciation of the particular property, for a taxation year, determined in accordance with the generally accepted accounting principles, relating to the use of the particular property by the corporation in the year, as part of the production of the property;

(b.1)  despite subparagraphs a and b, the production costs directly attributable to the production of a property that is a circus show, an aquatic show or an ice show referred to in subparagraph b.1 of the second paragraph do not include an expenditure that the corporation incurred in respect of the property before the date determined in accordance with that subparagraph b.1 and the portion of the cost of acquisition of a particular property referred to in subparagraph b is determined without taking into account the use of the particular property by the corporation before that date;

(c)  the amount of a benefit attributable to production costs includes the portion of the proceeds of disposition by a corporation of a particular property used by it as part of the production of a property that is a qualified performance that relates to the portion of the cost of acquisition of the particular property that has already been included in the production costs of the property up to the amount of the portion of the cost of acquisition of the particular property that has already been so included in the production costs of the property; and

(d)  where that subparagraph i applies in respect of a property for which an application for an advance ruling or, in the absence of such an application, an application for a certificate is filed with the Société de développement des entreprises culturelles before 11 March 2020, the portion of that subparagraph before subparagraph 1 is to be read as if “65%” were replaced by “50%”.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, an amount of assistance received by a corporation, another person or a partnership, as the case may be, is deemed, in respect of a property that is a qualified performance, to be repaid by the corporation, the other person or the partnership in a taxation year, pursuant to a legal obligation, if that amount

(a)  reduced, for the purpose of computing the amount that a corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.11, in respect of the property,

i.  because of subparagraph d of the second paragraph, a labour expenditure of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, a qualified labour expenditure of the corporation in respect of the property, or

iii.  (subparagraph repealed);

(b)  was not received by the corporation, the other person or the partnership; and

(c)  ceased in the taxation year to be an amount that the corporation, the other person or the partnership may reasonably expect to receive.

For the purposes of paragraph c of the definition of “qualified corporation” in the first paragraph, a corporation whose mission is cultural does not include a corporation whose mandate consists in making investments.

Where the amount deemed to have been paid to the Minister by a corporation on account of its tax payable for a taxation year under section 1029.8.36.0.0.11 is determined,

(a)  in relation to the portion of a qualified labour expenditure referred to in subparagraph i of subparagraph a of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “20/7” were replaced wherever it appears by “100/29.1667”; and

(b)  in relation to the portion of a qualified labour expenditure referred to in subparagraph b of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “20/7” were replaced wherever it appears by “25/7”.

For the purposes of this division, the Minister may extend, by not more than one year, the period described in paragraph c of the definition of “qualified performance” in the first paragraph in respect of a property of a corporation, where the corporation establishes, to the Minister’s satisfaction, that it reduced the number of performances of the property before an audience or ceased the performance of the property and that the reduction or cessation, as the case may be, is directly attributable to the measures put in place to mitigate the effects of the COVID-19 pandemic. In such a case, the period for which the favourable advance ruling was given or for which the certificate was issued in respect of the corporation is deemed to correspond to the period so extended.

2000, c. 39, s. 147; 2001, c. 51, s. 115; 2002, c. 9, s. 63; 2003, c. 9, s. 208; 2004, c. 21, s. 314; 2005, c. 1, s. 234; 2005, c. 23, s. 159; 2005, c. 38, s. 245; 2006, c. 13, s. 116; 2006, c. 36, s. 130; 2007, c. 12, s. 156; 2010, c. 5, s. 153; 2011, c. 1, s. 67; 2013, c. 10, s. 108; 2015, c. 21, s. 423; 2017, c. 1, s. 276; 2019, c. 14, s. 326; 2021, c. 14, s. 133; 2021, c. 36, s. 113; 2022, c. 20, s. 39.

2021-12-10

1029.8.36.0.0.10. In this division,

“eligible employee” of an individual, a corporation or a partnership means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“eligible individual” means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means, subject to the second paragraph, the aggregate of the following amounts, but does not include any amount relating to the broadcasting or promotion of the property: 

(a)  the salaries or wages directly attributable to the production of the property that are incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in relation to the stages of production of the property, from the preproduction stage to the performance before an audience, or in relation to another stage of production of the property carried out after the performance before an audience within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation to its eligible employees; and

(b)  the portion of the remuneration, other than salary or wages, that relates to services rendered to the corporation in relation to the production of the property and that is related to the stages of production of the property provided for in paragraph a, that is incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, and that is paid by the corporation

i.  to an eligible individual, to the extent that that portion of the remuneration is reasonably attributable to services personally rendered by the eligible individual as part of the production of the property, to the wages of the eligible individual’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by another eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists (chapter S-32.1) and to whom that portion of the remuneration is paid again by the eligible individual,

ii.  to a particular corporation having an establishment in Québec, other than a corporation referred to in subparagraph iii, to the extent that that portion of the remuneration is reasonably attributable either to the wages of the particular corporation’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the particular corporation,

iii.  to a corporation having an establishment in Québec all the issued capital stock of which, except directors’ qualifying shares, belongs to an eligible individual and the activities of which consist principally in the provision of the eligible individual’s services, to the extent that that portion of the remuneration is reasonably attributable to services rendered by the eligible individual as part of the production of the property, or

iv.  to a partnership carrying on a business in Québec and having an establishment therein, to the extent that that portion of the remuneration is reasonably attributable to services rendered, as part of the production of the property, by an eligible individual who is a member of the partnership, to the wages of the partnership’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the partnership;

“qualified corporation” for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on therein a performance production business that is a qualified business, but does not include

(a)  a corporation that, at any time in the year or during the 24 months preceding the year, is controlled, directly or indirectly in any manner whatever, by one or more persons not resident in Québec;

(a.1)  a corporation that, at any time in the year or during the 24 months preceding the year, would be controlled by a particular person, if each share of the capital stock of a corporation owned by a person not resident in Québec were owned by the particular person;

(b)  a corporation that is exempt from tax for the year under Book VIII; or

(c)  a corporation that is controlled, directly or indirectly in any manner whatever, by one or more corporations that are exempt from tax under Book VIII at any time in the year and whose mission is cultural;

(d)  (subparagraph repealed);

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure of the corporation for the year in respect of the property,

(2)  any repayment made in the year by the corporation, another person or a partnership, as the case may be, pursuant to a legal obligation, of any assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the property, in subparagraph ii or in subparagraph d of the second paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the production of the property, in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, up to 20/7 of the tax under Part III.1.0.4 that the corporation is required to pay in a taxation year preceding the year because of that subparagraph i in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure of the corporation or an amount determined under subparagraph 2, exceeds the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the property, for a taxation year preceding the year, exceeds 20/7 of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a year preceding the year by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance and non-government assistance that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, under subparagraph i of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year,

(2)  the amount of any benefit or advantage that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, to the extent that that amount has not, under subparagraph ii of subparagraph d of the second paragraph, reduced the amount of that labour expenditure of the corporation for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that, for a taxation year preceding the year in respect of the property, is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph b of the definition of “labour expenditure”, to the extent that the amount has not, under subparagraph iii of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  65% of the amount by which the production costs directly attributable to the production of the property that are incurred by the corporation before the end of the year in respect of the property until the performance of the property before an audience or within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation, exceeds the aggregate of

(1)  the amount of any government assistance and non-government assistance attributable to those costs that the corporation or a person or partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, and that the corporation, person or partnership, as the case may be, has not repaid at that time pursuant to a legal obligation, and

(2)  the amount of any benefit or advantage attributable to those costs, that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, exceeds

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the production of the property for a taxation year preceding the year exceeds 20/7 of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a taxation year preceding the year in respect of the production of the property;

“qualified performance” of a corporation means a property that is a performance in respect of which the corporation holds, for one of the following periods, a favourable advance ruling given or a certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  the period covering the stage of pre-production of the property through the end of the first full year after the first performance of the property before an audience;

(b)  the period covering the second full year after the first performance of the property before an audience; or

(c)  the period covering the third full year after the first performance of the property before an audience;

“salary or wages” means the income computed pursuant to Chapters I and II of Title II of Book III.

For the purposes of the definition of “labour expenditure” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of that definition, the salaries or wages directly attributable to the production of a property that is a qualified performance are, where an eligible employee directly undertakes, supervises or supports the production of the property, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the production of the property;

(b)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, except such remuneration paid to a performing artist, or an expenditure as remuneration that is, or may reasonably be considered to be, incurred by a corporation, as a mandatary, on behalf of another person;

(b.1)  despite subparagraph a, in relation to a property that is a circus show, an aquatic show or an ice show in respect of which any of the periods specified in paragraphs a to c of the definition of “qualified performance” in the first paragraph began before 14 March 2008 and had not ended on 13 March 2008, a salary or wages or another remuneration does not include an expenditure that the corporation incurs in respect of the property before

i.  14 March 2008, or

ii.  if it is later, the date included in a period for which a favourable advance ruling has been given or a certificate has been issued by the Société de développement des entreprises culturelles in respect of the property, that is the date from which the Société de développement des entreprises culturelles recognizes the performance as qualifying for the purposes of this division;

(c)  the amount referred to in paragraph a or b of that definition shall be determined by considering, where the salary or wages, or remuneration, as the case may be, relates to the performance of the property before an audience, only the performances that occur in the three years after the first performance of the property before an audience;

(d)  the amount of the labour expenditure of a corporation for a taxation year in respect of a property is to be reduced, where applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds either to the salaries or wages described in paragraph a of that definition or to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, that are included in that labour expenditure of the corporation for the year, and the aggregate of

i.  the amount of any government assistance and non-government assistance attributable to the particular amount that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year,

ii.  the amount of any benefit or advantage attributable to the particular amount that a person or a partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for that year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property, or in any other form or manner, and

iii.  if the particular amount corresponds to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year, that is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in that subparagraph; and

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure for the year in respect of a property is deemed to be nil.

For the purposes of the definitions of “labour expenditure” and “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which any of the three periods in respect of which an amount is deemed to have been paid by the corporation under section 1029.8.36.0.0.11 is completed; and

(b)  an expenditure that would, but for this subparagraph, be a labour expenditure of a corporation for a particular taxation year in respect of a property that is a qualified performance or would constitute production costs directly attributable to the production of such a property, such expenditure being otherwise incurred in the particular year, and that is outstanding at the particular time the corporation first files with the Minister the prescribed form containing prescribed information provided for in the first paragraph of section 1029.8.36.0.0.11 for that particular year, in respect of the property, or, in the absence of such filing with the Minister, on the corporation’s filing-due date for that particular year, is deemed not to be incurred in the particular year and to be incurred in a subsequent taxation year if that expenditure is paid in that subsequent year and after the particular time or after that filing-due date, as the case may be, or in the taxation year that immediately follows that subsequent year and before the time the corporation first files with the Minister that prescribed form for that subsequent year, in respect of the property.

For the purposes of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the production costs directly attributable to the production of a property that is a qualified performance are the following amounts, but do not include however the costs incurred for the broadcasting or promotion of the property:

i.  the portion of the production costs, other than the production fees and administration costs, to the extent that they are included in the production cost, cost or capital cost, as the case may be, of the property to the corporation, and

ii.  the production fees and administration costs;

(b)  the production costs directly attributable to the production of a property that is a qualified performance include the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the production of the property, which corresponds to the portion of the depreciation of the particular property, for a taxation year, determined in accordance with the generally accepted accounting principles, relating to the use of the particular property by the corporation in the year, as part of the production of the property;

(b.1)  despite subparagraphs a and b, the production costs directly attributable to the production of a property that is a circus show, an aquatic show or an ice show referred to in subparagraph b.1 of the second paragraph do not include an expenditure that the corporation incurred in respect of the property before the date determined in accordance with that subparagraph b.1 and the portion of the cost of acquisition of a particular property referred to in subparagraph b is determined without taking into account the use of the particular property by the corporation before that date;

(c)  the amount of a benefit attributable to production costs includes the portion of the proceeds of disposition by a corporation of a particular property used by it as part of the production of a property that is a qualified performance that relates to the portion of the cost of acquisition of the particular property that has already been included in the production costs of the property up to the amount of the portion of the cost of acquisition of the particular property that has already been so included in the production costs of the property; and

(d)  where that subparagraph i applies in respect of a property for which an application for an advance ruling or, in the absence of such an application, an application for a certificate is filed with the Société de développement des entreprises culturelles before 11 March 2020, the portion of that subparagraph before subparagraph 1 is to be read as if “65%” were replaced by “50%”.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, an amount of assistance received by a corporation, another person or a partnership, as the case may be, is deemed, in respect of a property that is a qualified performance, to be repaid by the corporation, the other person or the partnership in a taxation year, pursuant to a legal obligation, if that amount

(a)  reduced, for the purpose of computing the amount that a corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.11, in respect of the property,

i.  because of subparagraph d of the second paragraph, a labour expenditure of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, a qualified labour expenditure of the corporation in respect of the property, or

iii.  (subparagraph repealed);

(b)  was not received by the corporation, the other person or the partnership; and

(c)  ceased in the taxation year to be an amount that the corporation, the other person or the partnership may reasonably expect to receive.

For the purposes of paragraph c of the definition of “qualified corporation” in the first paragraph, a corporation whose mission is cultural does not include a corporation whose mandate consists in making investments.

Where the amount deemed to have been paid to the Minister by a corporation on account of its tax payable for a taxation year under section 1029.8.36.0.0.11 is determined,

(a)  in relation to the portion of a qualified labour expenditure referred to in subparagraph i of subparagraph a of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “20/7” were replaced wherever it appears by “100/29.1667”; and

(b)  in relation to the portion of a qualified labour expenditure referred to in subparagraph b of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “20/7” were replaced wherever it appears by “25/7”.

For the purposes of this division, the Minister may extend, by not more than one year, the period described in paragraph c of the definition of “qualified performance” in the first paragraph in respect of a property of a corporation, where the corporation establishes, to the Minister’s satisfaction, that it reduced the number of performances of the property before an audience or ceased the performance of the property and that the reduction or cessation, as the case may be, is directly attributable to the measures put in place to mitigate the effects of the COVID-19 pandemic. In such a case, the period for which the favourable advance ruling was given or for which the certificate was issued in respect of the corporation is deemed to correspond to the period so extended.

2000, c. 39, s. 147; 2001, c. 51, s. 115; 2002, c. 9, s. 63; 2003, c. 9, s. 208; 2004, c. 21, s. 314; 2005, c. 1, s. 234; 2005, c. 23, s. 159; 2005, c. 38, s. 245; 2006, c. 13, s. 116; 2006, c. 36, s. 130; 2007, c. 12, s. 156; 2010, c. 5, s. 153; 2011, c. 1, s. 67; 2013, c. 10, s. 108; 2015, c. 21, s. 423; 2017, c. 1, s. 276; 2019, c. 14, s. 326; 2021, c. 14, s. 133; 2021, c. 36, s. 113.

2021-06-02

1029.8.36.0.0.10. In this division,

“eligible employee” of an individual, a corporation or a partnership means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“eligible individual” means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means, subject to the second paragraph, the aggregate of the following amounts, but does not include any amount relating to the broadcasting or promotion of the property: 

(a)  the salaries or wages directly attributable to the production of the property that are incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in relation to the stages of production of the property, from the preproduction stage to the performance before an audience, or in relation to another stage of production of the property carried out after the performance before an audience within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation to its eligible employees; and

(b)  the portion of the remuneration, other than salary or wages, that relates to services rendered to the corporation in relation to the production of the property and that is related to the stages of production of the property provided for in paragraph a, that is incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, and that is paid by the corporation

i.  to an eligible individual, to the extent that that portion of the remuneration is reasonably attributable to services personally rendered by the eligible individual as part of the production of the property, to the wages of the eligible individual’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by another eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists (chapter S-32.1) and to whom that portion of the remuneration is paid again by the eligible individual,

ii.  to a particular corporation having an establishment in Québec, other than a corporation referred to in subparagraph iii, to the extent that that portion of the remuneration is reasonably attributable either to the wages of the particular corporation’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the particular corporation,

iii.  to a corporation having an establishment in Québec all the issued capital stock of which, except directors’ qualifying shares, belongs to an eligible individual and the activities of which consist principally in the provision of the eligible individual’s services, to the extent that that portion of the remuneration is reasonably attributable to services rendered by the eligible individual as part of the production of the property, or

iv.  to a partnership carrying on a business in Québec and having an establishment therein, to the extent that that portion of the remuneration is reasonably attributable to services rendered, as part of the production of the property, by an eligible individual who is a member of the partnership, to the wages of the partnership’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the partnership;

“qualified corporation” for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on therein a performance production business that is a qualified business, but does not include

(a)  a corporation that, at any time in the year or during the 24 months preceding the year, is controlled, directly or indirectly in any manner whatever, by one or more persons not resident in Québec;

(a.1)  a corporation that, at any time in the year or during the 24 months preceding the year, would be controlled by a particular person, if each share of the capital stock of a corporation owned by a person not resident in Québec were owned by the particular person;

(b)  a corporation that is exempt from tax for the year under Book VIII; or

(c)  a corporation that is controlled, directly or indirectly in any manner whatever, by one or more corporations that are exempt from tax under Book VIII at any time in the year and whose mission is cultural;

(d)  (subparagraph repealed);

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure of the corporation for the year in respect of the property,

(2)  any repayment made in the year by the corporation, another person or a partnership, as the case may be, pursuant to a legal obligation, of any assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the property, in subparagraph ii or in subparagraph d of the second paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the production of the property, in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, up to 20/7 of the tax under Part III.1.0.4 that the corporation is required to pay in a taxation year preceding the year because of that subparagraph i in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure of the corporation or an amount determined under subparagraph 2, exceeds the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the property, for a taxation year preceding the year, exceeds 20/7 of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a year preceding the year by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance and non-government assistance that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, under subparagraph i of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year,

(2)  the amount of any benefit or advantage that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, to the extent that that amount has not, under subparagraph ii of subparagraph d of the second paragraph, reduced the amount of that labour expenditure of the corporation for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that, for a taxation year preceding the year in respect of the property, is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph b of the definition of “labour expenditure”, to the extent that the amount has not, under subparagraph iii of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  65% of the amount by which the production costs directly attributable to the production of the property that are incurred by the corporation before the end of the year in respect of the property until the performance of the property before an audience or within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation, exceeds the aggregate of

(1)  the amount of any government assistance and non-government assistance attributable to those costs that the corporation or a person or partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, and that the corporation, person or partnership, as the case may be, has not repaid at that time pursuant to a legal obligation, and

(2)  the amount of any benefit or advantage attributable to those costs, that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, exceeds

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the production of the property for a taxation year preceding the year exceeds 20/7 of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a taxation year preceding the year in respect of the production of the property;

“qualified performance” of a corporation means a property that is a performance in respect of which the corporation holds, for one of the following periods, a favourable advance ruling given or a certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  the period covering the stage of pre-production of the property through the end of the first full year after the first performance of the property before an audience;

(b)  the period covering the second full year after the first performance of the property before an audience; or

(c)  the period covering the third full year after the first performance of the property before an audience;

“salary or wages” means the income computed pursuant to Chapters I and II of Title II of Book III.

For the purposes of the definition of “labour expenditure” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of that definition, the salaries or wages directly attributable to the production of a property that is a qualified performance are, where an eligible employee directly undertakes, supervises or supports the production of the property, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the production of the property;

(b)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, except such remuneration paid to a performing artist, or an expenditure as remuneration that is, or may reasonably be considered to be, incurred by a corporation, as a mandatary, on behalf of another person;

(b.1)  despite subparagraph a, in relation to a property that is a circus show, an aquatic show or an ice show in respect of which any of the periods specified in paragraphs a to c of the definition of “qualified performance” in the first paragraph began before 14 March 2008 and had not ended on 13 March 2008, a salary or wages or another remuneration does not include an expenditure that the corporation incurs in respect of the property before

i.  14 March 2008, or

ii.  if it is later, the date included in a period for which a favourable advance ruling has been given or a certificate has been issued by the Société de développement des entreprises culturelles in respect of the property, that is the date from which the Société de développement des entreprises culturelles recognizes the performance as qualifying for the purposes of this division;

(c)  the amount referred to in paragraph a or b of that definition shall be determined by considering, where the salary or wages, or remuneration, as the case may be, relates to the performance of the property before an audience, only the performances that occur in the three years after the first performance of the property before an audience;

(d)  the amount of the labour expenditure of a corporation for a taxation year in respect of a property is to be reduced, where applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds either to the salaries or wages described in paragraph a of that definition or to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, that are included in that labour expenditure of the corporation for the year, and the aggregate of

i.  the amount of any government assistance and non-government assistance attributable to the particular amount that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year,

ii.  the amount of any benefit or advantage attributable to the particular amount that a person or a partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for that year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property, or in any other form or manner, and

iii.  if the particular amount corresponds to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year, that is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in that subparagraph; and

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure for the year in respect of a property is deemed to be nil.

For the purposes of the definitions of “labour expenditure” and “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which any of the three periods in respect of which an amount is deemed to have been paid by the corporation under section 1029.8.36.0.0.11 is completed; and

(b)  an expenditure that would, but for this subparagraph, be a labour expenditure of a corporation for a particular taxation year in respect of a property that is a qualified performance or would constitute production costs directly attributable to the production of such a property, such expenditure being otherwise incurred in the particular year, and that is outstanding at the particular time the corporation first files with the Minister the prescribed form containing prescribed information provided for in the first paragraph of section 1029.8.36.0.0.11 for that particular year, in respect of the property, or, in the absence of such filing with the Minister, on the corporation’s filing-due date for that particular year, is deemed not to be incurred in the particular year and to be incurred in a subsequent taxation year if that expenditure is paid in that subsequent year and after the particular time or after that filing-due date, as the case may be, or in the taxation year that immediately follows that subsequent year and before the time the corporation first files with the Minister that prescribed form for that subsequent year, in respect of the property.

For the purposes of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the production costs directly attributable to the production of a property that is a qualified performance are the following amounts, but do not include however the costs incurred for the broadcasting or promotion of the property:

i.  the portion of the production costs, other than the production fees and administration costs, to the extent that they are included in the production cost, cost or capital cost, as the case may be, of the property to the corporation, and

ii.  the production fees and administration costs;

(b)  the production costs directly attributable to the production of a property that is a qualified performance include the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the production of the property, which corresponds to the portion of the depreciation of the particular property, for a taxation year, determined in accordance with the generally accepted accounting principles, relating to the use of the particular property by the corporation in the year, as part of the production of the property;

(b.1)  despite subparagraphs a and b, the production costs directly attributable to the production of a property that is a circus show, an aquatic show or an ice show referred to in subparagraph b.1 of the second paragraph do not include an expenditure that the corporation incurred in respect of the property before the date determined in accordance with that subparagraph b.1 and the portion of the cost of acquisition of a particular property referred to in subparagraph b is determined without taking into account the use of the particular property by the corporation before that date;

(c)  the amount of a benefit attributable to production costs includes the portion of the proceeds of disposition by a corporation of a particular property used by it as part of the production of a property that is a qualified performance that relates to the portion of the cost of acquisition of the particular property that has already been included in the production costs of the property up to the amount of the portion of the cost of acquisition of the particular property that has already been so included in the production costs of the property; and

(d)  where that subparagraph i applies in respect of a property for which an application for an advance ruling or, in the absence of such an application, an application for a certificate is filed with the Société de développement des entreprises culturelles before 11 March 2020, the portion of that subparagraph before subparagraph 1 is to be read as if “65%” were replaced by “50%”.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, an amount of assistance received by a corporation, another person or a partnership, as the case may be, is deemed, in respect of a property that is a qualified performance, to be repaid by the corporation, the other person or the partnership in a taxation year, pursuant to a legal obligation, if that amount

(a)  reduced, for the purpose of computing the amount that a corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.11, in respect of the property,

i.  because of subparagraph d of the second paragraph, a labour expenditure of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, a qualified labour expenditure of the corporation in respect of the property, or

iii.  (subparagraph repealed);

(b)  was not received by the corporation, the other person or the partnership; and

(c)  ceased in the taxation year to be an amount that the corporation, the other person or the partnership may reasonably expect to receive.

For the purposes of paragraph c of the definition of “qualified corporation” in the first paragraph, a corporation whose mission is cultural does not include a corporation whose mandate consists in making investments.

Where the amount deemed to have been paid to the Minister by a corporation on account of its tax payable for a taxation year under section 1029.8.36.0.0.11 is determined,

(a)  in relation to the portion of a qualified labour expenditure referred to in subparagraph i of subparagraph a of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “20/7” were replaced wherever it appears by “100/29.1667”; and

(b)  in relation to the portion of a qualified labour expenditure referred to in subparagraph b of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “20/7” were replaced wherever it appears by “25/7”.

2000, c. 39, s. 147; 2001, c. 51, s. 115; 2002, c. 9, s. 63; 2003, c. 9, s. 208; 2004, c. 21, s. 314; 2005, c. 1, s. 234; 2005, c. 23, s. 159; 2005, c. 38, s. 245; 2006, c. 13, s. 116; 2006, c. 36, s. 130; 2007, c. 12, s. 156; 2010, c. 5, s. 153; 2011, c. 1, s. 67; 2013, c. 10, s. 108; 2015, c. 21, s. 423; 2017, c. 1, s. 276; 2019, c. 14, s. 326; 2021, c. 14, s. 133.

2019-06-19

1029.8.36.0.0.10. In this division,

“eligible employee” of an individual, a corporation or a partnership means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“eligible individual” means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means, subject to the second paragraph, the aggregate of the following amounts, but does not include any amount relating to the broadcasting or promotion of the property: 

(a)  the salaries or wages directly attributable to the production of the property that are incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in relation to the stages of production of the property, from the preproduction stage to the performance before an audience, or in relation to another stage of production of the property carried out after the performance before an audience within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation to its eligible employees; and

(b)  the portion of the remuneration, other than salary or wages, that relates to services rendered to the corporation in relation to the production of the property and that is related to the stages of production of the property provided for in paragraph a, that is incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, and that is paid by the corporation

i.  to an eligible individual, to the extent that that portion of the remuneration is reasonably attributable to services personally rendered by the eligible individual as part of the production of the property, to the wages of the eligible individual’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by another eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists (chapter S-32.1) and to whom that portion of the remuneration is paid again by the eligible individual,

ii.  to a particular corporation having an establishment in Québec, other than a corporation referred to in subparagraph iii, to the extent that that portion of the remuneration is reasonably attributable either to the wages of the particular corporation’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the particular corporation,

iii.  to a corporation having an establishment in Québec all the issued capital stock of which, except directors’ qualifying shares, belongs to an eligible individual and the activities of which consist principally in the provision of the eligible individual’s services, to the extent that that portion of the remuneration is reasonably attributable to services rendered by the eligible individual as part of the production of the property, or

iv.  to a partnership carrying on a business in Québec and having an establishment therein, to the extent that that portion of the remuneration is reasonably attributable to services rendered, as part of the production of the property, by an eligible individual who is a member of the partnership, to the wages of the partnership’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the partnership;

“qualified corporation” for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on therein a performance production business that is a qualified business, but does not include

(a)  a corporation that, at any time in the year or during the 24 months preceding the year, is controlled, directly or indirectly in any manner whatever, by one or more persons not resident in Québec;

(a.1)  a corporation that, at any time in the year or during the 24 months preceding the year, would be controlled by a particular person, if each share of the capital stock of a corporation owned by a person not resident in Québec were owned by the particular person;

(b)  a corporation that is exempt from tax for the year under Book VIII; or

(c)  a corporation that is controlled, directly or indirectly in any manner whatever, by one or more corporations that are exempt from tax under Book VIII at any time in the year and whose mission is cultural;

(d)  (subparagraph repealed);

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure of the corporation for the year in respect of the property,

(2)  any repayment made in the year by the corporation, another person or a partnership, as the case may be, pursuant to a legal obligation, of any assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the property, in subparagraph ii or in subparagraph d of the second paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the production of the property, in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, up to 20/7 of the tax under Part III.1.0.4 that the corporation is required to pay in a taxation year preceding the year because of that subparagraph i in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure of the corporation or an amount determined under subparagraph 2, exceeds the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the property, for a taxation year preceding the year, exceeds 20/7 of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a year preceding the year by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance and non-government assistance that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, under subparagraph i of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year,

(2)  the amount of any benefit or advantage that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, to the extent that that amount has not, under subparagraph ii of subparagraph d of the second paragraph, reduced the amount of that labour expenditure of the corporation for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that, for a taxation year preceding the year in respect of the property, is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph b of the definition of “labour expenditure”, to the extent that the amount has not, under subparagraph iii of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  50% of the amount by which the production costs directly attributable to the production of the property that are incurred by the corporation before the end of the year in respect of the property until the performance of the property before an audience or within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation, exceeds the aggregate of

(1)  the amount of any government assistance and non-government assistance attributable to those costs that the corporation or a person or partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, and that the corporation, person or partnership, as the case may be, has not repaid at that time pursuant to a legal obligation, and

(2)  the amount of any benefit or advantage attributable to those costs, that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, exceeds

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the production of the property for a taxation year preceding the year exceeds 20/7 of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a taxation year preceding the year in respect of the production of the property;

“qualified performance” of a corporation means a property that is a performance in respect of which the corporation holds, for one of the following periods, a favourable advance ruling given or a certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  the period covering the stage of pre-production of the property through the end of the first full year after the first performance of the property before an audience;

(b)  the period covering the second full year after the first performance of the property before an audience; or

(c)  the period covering the third full year after the first performance of the property before an audience;

“salary or wages” means the income computed pursuant to Chapters I and II of Title II of Book III.

For the purposes of the definition of “labour expenditure” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of that definition, the salaries or wages directly attributable to the production of a property that is a qualified performance are, where an eligible employee directly undertakes, supervises or supports the production of the property, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the production of the property;

(b)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, except such remuneration paid to a performing artist, or an expenditure as remuneration that is, or may reasonably be considered to be, incurred by a corporation, as a mandatary, on behalf of another person;

(b.1)  despite subparagraph a, in relation to a property that is a circus show, an aquatic show or an ice show in respect of which any of the periods specified in paragraphs a to c of the definition of “qualified performance” in the first paragraph began before 14 March 2008 and had not ended on 13 March 2008, a salary or wages or another remuneration does not include an expenditure that the corporation incurs in respect of the property before

i.  14 March 2008, or

ii.  if it is later, the date included in a period for which a favourable advance ruling has been given or a certificate has been issued by the Société de développement des entreprises culturelles in respect of the property, that is the date from which the Société de développement des entreprises culturelles recognizes the performance as qualifying for the purposes of this division;

(c)  the amount referred to in paragraph a or b of that definition shall be determined by considering, where the salary or wages, or remuneration, as the case may be, relates to the performance of the property before an audience, only the performances that occur in the three years after the first performance of the property before an audience;

(d)  the amount of the labour expenditure of a corporation for a taxation year in respect of a property is to be reduced, where applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds either to the salaries or wages described in paragraph a of that definition or to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, that are included in that labour expenditure of the corporation for the year, and the aggregate of

i.  the amount of any government assistance and non-government assistance attributable to the particular amount that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year,

ii.  the amount of any benefit or advantage attributable to the particular amount that a person or a partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for that year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property, or in any other form or manner, and

iii.  if the particular amount corresponds to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year, that is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in that subparagraph; and

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure for the year in respect of a property is deemed to be nil.

For the purposes of the definitions of “labour expenditure” and “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which any of the three periods in respect of which an amount is deemed to have been paid by the corporation under section 1029.8.36.0.0.11 is completed; and

(b)  an expenditure that would, but for this subparagraph, be a labour expenditure of a corporation for a particular taxation year in respect of a property that is a qualified performance or would constitute production costs directly attributable to the production of such a property, such expenditure being otherwise incurred in the particular year, and that is outstanding at the particular time the corporation first files with the Minister the prescribed form containing prescribed information provided for in the first paragraph of section 1029.8.36.0.0.11 for that particular year, in respect of the property, or, in the absence of such filing with the Minister, on the corporation’s filing-due date for that particular year, is deemed not to be incurred in the particular year and to be incurred in a subsequent taxation year if that expenditure is paid in that subsequent year and after the particular time or after that filing-due date, as the case may be, or in the taxation year that immediately follows that subsequent year and before the time the corporation first files with the Minister that prescribed form for that subsequent year, in respect of the property.

For the purposes of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the production costs directly attributable to the production of a property that is a qualified performance are the following amounts, but do not include however the costs incurred for the broadcasting or promotion of the property:

i.  the portion of the production costs, other than the production fees and administration costs, to the extent that they are included in the production cost, cost or capital cost, as the case may be, of the property to the corporation, and

ii.  the production fees and administration costs;

(b)  the production costs directly attributable to the production of a property that is a qualified performance include the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the production of the property, which corresponds to the portion of the depreciation of the particular property, for a taxation year, determined in accordance with the generally accepted accounting principles, relating to the use of the particular property by the corporation in the year, as part of the production of the property;

(b.1)  despite subparagraphs a and b, the production costs directly attributable to the production of a property that is a circus show, an aquatic show or an ice show referred to in subparagraph b.1 of the second paragraph do not include an expenditure that the corporation incurred in respect of the property before the date determined in accordance with that subparagraph b.1 and the portion of the cost of acquisition of a particular property referred to in subparagraph b is determined without taking into account the use of the particular property by the corporation before that date; and

(c)  the amount of a benefit attributable to production costs includes the portion of the proceeds of disposition by a corporation of a particular property used by it as part of the production of a property that is a qualified performance that relates to the portion of the cost of acquisition of the particular property that has already been included in the production costs of the property up to the amount of the portion of the cost of acquisition of the particular property that has already been so included in the production costs of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, an amount of assistance received by a corporation, another person or a partnership, as the case may be, is deemed, in respect of a property that is a qualified performance, to be repaid by the corporation, the other person or the partnership in a taxation year, pursuant to a legal obligation, if that amount

(a)  reduced, for the purpose of computing the amount that a corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.11, in respect of the property,

i.  because of subparagraph d of the second paragraph, a labour expenditure of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, a qualified labour expenditure of the corporation in respect of the property, or

iii.  (subparagraph repealed);

(b)  was not received by the corporation, the other person or the partnership; and

(c)  ceased in the taxation year to be an amount that the corporation, the other person or the partnership may reasonably expect to receive.

For the purposes of paragraph c of the definition of “qualified corporation” in the first paragraph, a corporation whose mission is cultural does not include a corporation whose mandate consists in making investments.

Where the amount deemed to have been paid to the Minister by a corporation on account of its tax payable for a taxation year under section 1029.8.36.0.0.11 is determined,

(a)  in relation to the portion of a qualified labour expenditure referred to in subparagraph i of subparagraph a of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “20/7” were replaced wherever it appears by “100/29.1667”; and

(b)  in relation to the portion of a qualified labour expenditure referred to in subparagraph b of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “20/7” were replaced wherever it appears by “25/7”.

2000, c. 39, s. 147; 2001, c. 51, s. 115; 2002, c. 9, s. 63; 2003, c. 9, s. 208; 2004, c. 21, s. 314; 2005, c. 1, s. 234; 2005, c. 23, s. 159; 2005, c. 38, s. 245; 2006, c. 13, s. 116; 2006, c. 36, s. 130; 2007, c. 12, s. 156; 2010, c. 5, s. 153; 2011, c. 1, s. 67; 2013, c. 10, s. 108; 2015, c. 21, s. 423; 2017, c. 1, s. 276; 2019, c. 14, s. 326.

2017-02-08

1029.8.36.0.0.10. In this division,

“eligible employee” of an individual, a corporation or a partnership means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“eligible individual” means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means, subject to the second paragraph, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances, but does not include any amount relating to the broadcasting or promotion of the property:

(a)  the salaries or wages directly attributable to the production of the property that are incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in relation to the stages of production of the property, from the preproduction stage to the performance before an audience, or in relation to another stage of production of the property carried out after the performance before an audience within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation to its eligible employees; and

(b)  the portion of the remuneration, other than salary or wages, that relates to services rendered to the corporation in relation to the production of the property and that is related to the stages of production of the property provided for in paragraph a, that is incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, and that is paid by the corporation

i.  to an eligible individual, to the extent that that portion of the remuneration is reasonably attributable to services personally rendered by the eligible individual as part of the production of the property, to the wages of the eligible individual’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by another eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists (chapter S-32.1) and to whom that portion of the remuneration is paid again by the eligible individual,

ii.  to a particular corporation having an establishment in Québec, other than a corporation referred to in subparagraph iii, to the extent that that portion of the remuneration is reasonably attributable either to the wages of the particular corporation’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the particular corporation,

iii.  to a corporation having an establishment in Québec all the issued capital stock of which, except directors’ qualifying shares, belongs to an eligible individual and the activities of which consist principally in the provision of the eligible individual’s services, to the extent that that portion of the remuneration is reasonably attributable to services rendered by the eligible individual as part of the production of the property, or

iv.  to a partnership carrying on a business in Québec and having an establishment therein, to the extent that that portion of the remuneration is reasonably attributable to services rendered, as part of the production of the property, by an eligible individual who is a member of the partnership, to the wages of the partnership’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the partnership;

“qualified corporation” for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on therein a performance production business that is a qualified business, but does not include

(a)  a corporation that, at any time in the year or during the 24 months preceding the year, is controlled, directly or indirectly in any manner whatever, by one or more persons not resident in Québec;

(a.1)  a corporation that, at any time in the year or during the 24 months preceding the year, would be controlled by a particular person, if each share of the capital stock of the corporation owned by a person not resident in Québec were owned by the particular person;

(b)  a corporation that is exempt from tax for the year under Book VIII; or

(c)  a corporation that is controlled, directly or indirectly in any manner whatever, by one or more corporations that are exempt from tax under Book VIII at any time in the year and whose mission is cultural;

(d)  (subparagraph repealed);

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure of the corporation for the year in respect of the property,

(2)  any repayment made in the year by the corporation, another person or a partnership, as the case may be, pursuant to a legal obligation, of any assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the property, in subparagraph ii or in subparagraph d of the second paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the production of the property, in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, up to 20/7 of the tax under Part III.1.0.4 that the corporation is required to pay in a taxation year preceding the year because of that subparagraph i in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure of the corporation or an amount determined under subparagraph 2, exceeds the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the property, for a taxation year preceding the year, exceeds 20/7 of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a year preceding the year by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance and non-government assistance that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, under subparagraph i of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year,

(2)  the amount of any benefit or advantage that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, to the extent that that amount has not, under subparagraph ii of subparagraph d of the second paragraph, reduced the amount of that labour expenditure of the corporation for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that, for a taxation year preceding the year in respect of the property, is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph b of the definition of “labour expenditure”, to the extent that the amount has not, under subparagraph iii of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  50% of the amount by which the production costs directly attributable to the production of the property that are incurred by the corporation before the end of the year in respect of the property until the performance of the property before an audience or within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation, exceeds the aggregate of

(1)  the amount of any government assistance and non-government assistance attributable to those costs that the corporation or a person or partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, and that the corporation, person or partnership, as the case may be, has not repaid at that time pursuant to a legal obligation, and

(2)  the amount of any benefit or advantage attributable to those costs, that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, exceeds

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the production of the property for a taxation year preceding the year exceeds 20/7 of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a taxation year preceding the year in respect of the production of the property;

“qualified performance” of a corporation means a property that is a performance in respect of which the corporation holds, for one of the following periods, a favourable advance ruling given or a certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  the period covering the stage of pre-production of the property through the end of the first full year after the first performance of the property before an audience;

(b)  the period covering the second full year after the first performance of the property before an audience; or

(c)  the period covering the third full year after the first performance of the property before an audience;

“salary or wages” means the income computed pursuant to Chapters I and II of Title II of Book III.

For the purposes of the definition of “labour expenditure” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of that definition, the salaries or wages directly attributable to the production of a property that is a qualified performance are, where an eligible employee directly undertakes, supervises or supports the production of the property, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the production of the property;

(b)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, except such remuneration paid to a performing artist, or an expenditure as remuneration that is, or may reasonably be considered to be, incurred by a corporation, as a mandatary, on behalf of another person;

(b.1)  despite subparagraph a, in relation to a property that is a circus show, an aquatic show or an ice show in respect of which any of the periods specified in paragraphs a to c of the definition of “qualified performance” in the first paragraph began before 14 March 2008 and had not ended on 13 March 2008, a salary or wages or another remuneration does not include an expenditure that the corporation incurs in respect of the property before

i.  14 March 2008, or

ii.  if it is later, the date included in a period for which a favourable advance ruling has been given or a certificate has been issued by the Société de développement des entreprises culturelles in respect of the property, that is the date from which the Société de développement des entreprises culturelles recognizes the performance as qualifying for the purposes of this division;

(c)  the amount referred to in paragraph a or b of that definition shall be determined by considering, where the salary or wages, or remuneration, as the case may be, relates to the performance of the property before an audience, only the performances that occur in the three years after the first performance of the property before an audience;

(d)  the amount of the labour expenditure of a corporation for a taxation year in respect of a property is to be reduced, where applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds either to the salaries or wages described in paragraph a of that definition or to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, that are included in that labour expenditure of the corporation for the year, and the aggregate of

i.  the amount of any government assistance and non-government assistance attributable to the particular amount that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year,

ii.  the amount of any benefit or advantage attributable to the particular amount that a person or a partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for that year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property, or in any other form or manner, and

iii.  if the particular amount corresponds to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year, that is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in that subparagraph; and

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure for the year in respect of a property is deemed to be nil.

For the purposes of the definitions of “labour expenditure” and “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which any of the three periods in respect of which an amount is deemed to have been paid by the corporation under section 1029.8.36.0.0.11 is completed; and

(b)  no expenditure may be taken into consideration in computing a qualified labour expenditure of a corporation for a taxation year in respect of a property that is a qualified performance, or production costs directly attributable to the production of the property incurred before the end of the year, unless the expenditure is paid at the time the corporation first files with the Minister the prescribed form containing prescribed information provided for in the first paragraph of section 1029.8.36.0.0.11 for that taxation year.

For the purposes of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the production costs directly attributable to the production of a property that is a qualified performance are the following amounts, but do not include however the costs incurred for the broadcasting or promotion of the property:

i.  the portion of the production costs, other than the production fees and administration costs, to the extent that they are reasonable in the circumstances and included in the production cost, cost or capital cost, as the case may be, of the property to the corporation, and

ii.  the production fees and administration costs, to the extent that they are reasonable in the circumstances;

(b)  the production costs directly attributable to the production of a property that is a qualified performance include the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the production of the property, which corresponds to the portion of the depreciation of the particular property, for a taxation year, determined in accordance with the generally accepted accounting principles, relating to the use of the particular property by the corporation in the year, as part of the production of the property;

(b.1)  despite subparagraphs a and b, the production costs directly attributable to the production of a property that is a circus show, an aquatic show or an ice show referred to in subparagraph b.1 of the second paragraph do not include an expenditure that the corporation incurred in respect of the property before the date determined in accordance with that subparagraph b.1 and the portion of the cost of acquisition of a particular property referred to in subparagraph b is determined without taking into account the use of the particular property by the corporation before that date; and

(c)  the amount of a benefit attributable to production costs includes the portion of the proceeds of disposition by a corporation of a particular property used by it as part of the production of a property that is a qualified performance that relates to the portion of the cost of acquisition of the particular property that has already been included in the production costs of the property up to the amount of the portion of the cost of acquisition of the particular property that has already been so included in the production costs of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, an amount of assistance received by a corporation, another person or a partnership, as the case may be, is deemed, in respect of a property that is a qualified performance, to be repaid by the corporation, the other person or the partnership in a taxation year, pursuant to a legal obligation, if that amount

(a)  reduced, for the purpose of computing the amount that a corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.11, in respect of the property,

i.  because of subparagraph d of the second paragraph, a labour expenditure of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, a qualified labour expenditure of the corporation in respect of the property, or

iii.  (subparagraph repealed);

(b)  was not received by the corporation, the other person or the partnership; and

(c)  ceased in the taxation year to be an amount that the corporation, the other person or the partnership may reasonably expect to receive.

For the purposes of paragraph c of the definition of “qualified corporation” in the first paragraph, a corporation whose mission is cultural does not include a corporation whose mandate consists in making investments.

Where the amount deemed to have been paid to the Minister by a corporation on account of its tax payable for a taxation year under section 1029.8.36.0.0.11 is determined,

(a)  in relation to the portion of a qualified labour expenditure referred to in subparagraph i of subparagraph a of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “20/7” were replaced wherever it appears by “100/29.1667”; and

(b)  in relation to the portion of a qualified labour expenditure referred to in subparagraph b of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “20/7” were replaced wherever it appears by “25/7”.

2000, c. 39, s. 147; 2001, c. 51, s. 115; 2002, c. 9, s. 63; 2003, c. 9, s. 208; 2004, c. 21, s. 314; 2005, c. 1, s. 234; 2005, c. 23, s. 159; 2005, c. 38, s. 245; 2006, c. 13, s. 116; 2006, c. 36, s. 130; 2007, c. 12, s. 156; 2010, c. 5, s. 153; 2011, c. 1, s. 67; 2013, c. 10, s. 108; 2015, c. 21, s. 423; 2017, c. 1, s. 276.

2015-10-21

1029.8.36.0.0.10. In this division,

“eligible employee” of an individual, a corporation or a partnership means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“eligible individual” means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means, subject to the second paragraph, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances, but does not include any amount relating to the broadcasting or promotion of the property:

(a)  the salaries or wages directly attributable to the production of the property that are incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in relation to the stages of production of the property, from the preproduction stage to the performance before an audience, or in relation to another stage of production of the property carried out after the performance before an audience within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation to its eligible employees; and

(b)  the portion of the remuneration, other than salary or wages, that relates to services rendered to the corporation in relation to the production of the property and that is related to the stages of production of the property provided for in paragraph a, that is incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, and that is paid by the corporation

i.  to an eligible individual, to the extent that that portion of the remuneration is reasonably attributable to services personally rendered by the eligible individual as part of the production of the property, to the wages of the eligible individual’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by another eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists (chapter S-32.1) and to whom that portion of the remuneration is paid again by the eligible individual,

ii.  to a particular corporation having an establishment in Québec, other than a corporation referred to in subparagraph iii, to the extent that that portion of the remuneration is reasonably attributable either to the wages of the particular corporation’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the particular corporation,

iii.  to a corporation having an establishment in Québec all the issued capital stock of which, except directors’ qualifying shares, belongs to an eligible individual and the activities of which consist principally in the provision of the eligible individual’s services, to the extent that that portion of the remuneration is reasonably attributable to services rendered by the eligible individual as part of the production of the property, or

iv.  to a partnership carrying on a business in Québec and having an establishment therein, to the extent that that portion of the remuneration is reasonably attributable to services rendered, as part of the production of the property, by an eligible individual who is a member of the partnership, to the wages of the partnership’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the partnership;

“qualified corporation” for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on therein a performance production business that is a qualified business, but does not include

(a)  a corporation that, at any time in the year or during the 24 months preceding the year, is controlled, directly or indirectly in any manner whatever, by one or more persons not resident in Québec;

(a.1)  a corporation that, at any time in the year or during the 24 months preceding the year, would be controlled by a particular person, if each share of the capital stock of the corporation owned by a person not resident in Québec were owned by the particular person;

(b)  a corporation that is exempt from tax for the year under Book VIII; or

(c)  a corporation that is controlled, directly or indirectly in any manner whatever, by one or more corporations that are exempt from tax under Book VIII at any time in the year and whose mission is cultural;

(d)  (subparagraph repealed);

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure of the corporation for the year in respect of the property,

(2)  any repayment made in the year by the corporation, another person or a partnership, as the case may be, pursuant to a legal obligation, of any assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the property, in subparagraph ii or in subparagraph d of the second paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the production of the property, in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, up to 25/7 of the tax under Part III.1.0.4 that the corporation is required to pay in a taxation year preceding the year because of that subparagraph i in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure of the corporation or an amount determined under subparagraph 2, exceeds the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the property, for a taxation year preceding the year, exceeds 25/7 of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a year preceding the year by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance and non-government assistance that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, under subparagraph i of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year,

(2)  the amount of any benefit or advantage that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, to the extent that that amount has not, under subparagraph ii of subparagraph d of the second paragraph, reduced the amount of that labour expenditure of the corporation for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that, for a taxation year preceding the year in respect of the property, is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph b of the definition of “labour expenditure”, to the extent that the amount has not, under subparagraph iii of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  50% of the amount by which the production costs directly attributable to the production of the property that are incurred by the corporation before the end of the year in respect of the property until the performance of the property before an audience or within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation, exceeds the aggregate of

(1)  the amount of any government assistance and non-government assistance attributable to those costs that the corporation or a person or partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, and that the corporation, person or partnership, as the case may be, has not repaid at that time pursuant to a legal obligation, and

(2)  the amount of any benefit or advantage attributable to those costs, that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, exceeds

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the production of the property for a taxation year preceding the year exceeds 25/7 of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a taxation year preceding the year in respect of the production of the property;

“qualified performance” of a corporation means a property that is a performance in respect of which the corporation holds, for one of the following periods, a favourable advance ruling given or a certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  the period covering the stage of pre-production of the property through the end of the first full year after the first performance of the property before an audience;

(b)  the period covering the second full year after the first performance of the property before an audience; or

(c)  the period covering the third full year after the first performance of the property before an audience;

“salary or wages” means the income computed pursuant to Chapters I and II of Title II of Book III.

For the purposes of the definition of “labour expenditure” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of that definition, the salaries or wages directly attributable to the production of a property that is a qualified performance are, where an eligible employee directly undertakes, supervises or supports the production of the property, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the production of the property;

(b)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, except such remuneration paid to a performing artist, or an expenditure as remuneration that is, or may reasonably be considered to be, incurred by a corporation, as a mandatary, on behalf of another person;

(b.1)  despite subparagraph a, in relation to a property that is a circus show, an aquatic show or an ice show in respect of which any of the periods specified in paragraphs a to c of the definition of “qualified performance” in the first paragraph began before 14 March 2008 and had not ended on 13 March 2008, a salary or wages or another remuneration does not include an expenditure that the corporation incurs in respect of the property before

i.  14 March 2008, or

ii.  if it is later, the date included in a period for which a favourable advance ruling has been given or a certificate has been issued by the Société de développement des entreprises culturelles in respect of the property, that is the date from which the Société de développement des entreprises culturelles recognizes the performance as qualifying for the purposes of this division;

(c)  the amount referred to in paragraph a or b of that definition shall be determined by considering, where the salary or wages, or remuneration, as the case may be, relates to the performance of the property before an audience, only the performances that occur in the three years after the first performance of the property before an audience;

(d)  the amount of the labour expenditure of a corporation for a taxation year in respect of a property is to be reduced, where applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds either to the salaries or wages described in paragraph a of that definition or to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, that are included in that labour expenditure of the corporation for the year, and the aggregate of

i.  the amount of any government assistance and non-government assistance attributable to the particular amount that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year,

ii.  the amount of any benefit or advantage attributable to the particular amount that a person or a partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for that year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property, or in any other form or manner, and

iii.  if the particular amount corresponds to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year, that is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in that subparagraph; and

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure for the year in respect of a property is deemed to be nil.

For the purposes of the definitions of “labour expenditure” and “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which any of the three periods in respect of which an amount is deemed to have been paid by the corporation under section 1029.8.36.0.0.11 is completed; and

(b)  no expenditure may be taken into consideration in computing a qualified labour expenditure of a corporation for a taxation year in respect of a property that is a qualified performance, or production costs directly attributable to the production of the property incurred before the end of the year, unless the expenditure is paid at the time the corporation first files with the Minister the prescribed form containing prescribed information provided for in the first paragraph of section 1029.8.36.0.0.11 for that taxation year.

For the purposes of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the production costs directly attributable to the production of a property that is a qualified performance are the following amounts, but do not include however the costs incurred for the broadcasting or promotion of the property:

i.  the portion of the production costs, other than the production fees and administration costs, to the extent that they are reasonable in the circumstances and included in the production cost, cost or capital cost, as the case may be, of the property to the corporation, and

ii.  the production fees and administration costs, to the extent that they are reasonable in the circumstances;

(b)  the production costs directly attributable to the production of a property that is a qualified performance include the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the production of the property, which corresponds to the portion of the depreciation of the particular property, for a taxation year, determined in accordance with the generally accepted accounting principles, relating to the use of the particular property by the corporation in the year, as part of the production of the property;

(b.1)  despite subparagraphs a and b, the production costs directly attributable to the production of a property that is a circus show, an aquatic show or an ice show referred to in subparagraph b.1 of the second paragraph do not include an expenditure that the corporation incurred in respect of the property before the date determined in accordance with that subparagraph b.1 and the portion of the cost of acquisition of a particular property referred to in subparagraph b is determined without taking into account the use of the particular property by the corporation before that date; and

(c)  the amount of a benefit attributable to production costs includes the portion of the proceeds of disposition by a corporation of a particular property used by it as part of the production of a property that is a qualified performance that relates to the portion of the cost of acquisition of the particular property that has already been included in the production costs of the property up to the amount of the portion of the cost of acquisition of the particular property that has already been so included in the production costs of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, an amount of assistance received by a corporation, another person or a partnership, as the case may be, is deemed, in respect of a property that is a qualified performance, to be repaid by the corporation, the other person or the partnership in a taxation year, pursuant to a legal obligation, if that amount

(a)  reduced, for the purpose of computing the amount that a corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.11, in respect of the property,

i.  because of subparagraph d of the second paragraph, a labour expenditure of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, a qualified labour expenditure of the corporation in respect of the property, or

iii.  (subparagraph repealed);

(b)  was not received by the corporation, the other person or the partnership; and

(c)  ceased in the taxation year to be an amount that the corporation, the other person or the partnership may reasonably expect to receive.

For the purposes of paragraph c of the definition of “qualified corporation” in the first paragraph, a corporation whose mission is cultural does not include a corporation whose mandate consists in making investments.

Where, in respect of a property for which an application for an advance ruling or, in the absence of such an application, an application for a certificate for the period referred to in paragraph a of the definition of “qualified performance” in the first paragraph has been filed with the Société de développement des entreprises culturelles on or before 4 June 2014 or, if the Société de développement des entreprises culturelles considers that the work on the property was sufficiently advanced on that date, on or before 31 August 2014, the amount deemed to have been paid to the Minister by a corporation on account of its tax payable for a taxation year under section 1029.8.36.0.0.11 is determined,

(a)  in relation to the portion of a qualified labour expenditure referred to in subparagraph i of subparagraph a of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “25/7” were replaced wherever it appears by “100/29.1667”; and

(b)  in relation to the portion of a qualified labour expenditure referred to in subparagraph ii of subparagraph a of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “25/7” were replaced wherever it appears by “20/7”.

2000, c. 39, s. 147; 2001, c. 51, s. 115; 2002, c. 9, s. 63; 2003, c. 9, s. 208; 2004, c. 21, s. 314; 2005, c. 1, s. 234; 2005, c. 23, s. 159; 2005, c. 38, s. 245; 2006, c. 13, s. 116; 2006, c. 36, s. 130; 2007, c. 12, s. 156; 2010, c. 5, s. 153; 2011, c. 1, s. 67; 2013, c. 10, s. 108; 2015, c. 21, s. 423.

2013-06-05

1029.8.36.0.0.10. In this division,

“eligible employee” of an individual, a corporation or a partnership means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“eligible individual” means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means, subject to the second paragraph, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances, but does not include any amount relating to the broadcasting or promotion of the property:

(a)  the salaries or wages directly attributable to the production of the property that are incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in relation to the stages of production of the property, from the preproduction stage to the performance before an audience, or in relation to another stage of production of the property carried out after the performance before an audience within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation to its eligible employees; and

(b)  the portion of the remuneration, other than salary or wages, that relates to services rendered to the corporation in relation to the production of the property and that is related to the stages of production of the property provided for in paragraph a, that is incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, and that is paid by the corporation

i.  to an eligible individual, to the extent that that portion of the remuneration is reasonably attributable to services personally rendered by the eligible individual as part of the production of the property, to the wages of the eligible individual’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by another eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists (chapter S-32.1) and to whom that portion of the remuneration is paid again by the eligible individual,

ii.  to a particular corporation having an establishment in Québec, other than a corporation referred to in subparagraph iii, to the extent that that portion of the remuneration is reasonably attributable either to the wages of the particular corporation’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the particular corporation,

iii.  to a corporation having an establishment in Québec all the issued capital stock of which, except directors’ qualifying shares, belongs to an eligible individual and the activities of which consist principally in the provision of the eligible individual’s services, to the extent that that portion of the remuneration is reasonably attributable to services rendered by the eligible individual as part of the production of the property, or

iv.  to a partnership carrying on a business in Québec and having an establishment therein, to the extent that that portion of the remuneration is reasonably attributable to services rendered, as part of the production of the property, by an eligible individual who is a member of the partnership, to the wages of the partnership’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the partnership;

“qualified corporation” for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on therein a performance production business that is a qualified business, but does not include

(a)  a corporation that, at any time in the year or during the 24 months preceding the year, is controlled, directly or indirectly in any manner whatever, by one or more persons not resident in Québec;

(a.1)  a corporation that, at any time in the year or during the 24 months preceding the year, would be controlled by a particular person, if each share of the capital stock of the corporation owned by a person not resident in Québec were owned by the particular person;

(b)  a corporation that is exempt from tax for the year under Book VIII; or

(c)  a corporation that is controlled, directly or indirectly in any manner whatever, by one or more corporations that are exempt from tax under Book VIII at any time in the year and whose mission is cultural;

(d)  (subparagraph repealed);

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure of the corporation for the year in respect of the property,

(2)  any repayment made in the year by the corporation, another person or a partnership, as the case may be, pursuant to a legal obligation, of any assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the property, in subparagraph ii or in subparagraph d of the second paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the production of the property, in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, up to 300% of the tax under Part III.1.0.4 that the corporation is required to pay in a taxation year preceding the year because of that subparagraph i in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure of the corporation or an amount determined under subparagraph 2, exceeds the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the property, for a taxation year preceding the year, exceeds 300% of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a year preceding the year by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance and non-government assistance that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, under subparagraph i of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year,

(2)  the amount of any benefit or advantage that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, to the extent that that amount has not, under subparagraph ii of subparagraph d of the second paragraph, reduced the amount of that labour expenditure of the corporation for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that, for a taxation year preceding the year in respect of the property, is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph b of the definition of “labour expenditure”, to the extent that the amount has not, under subparagraph iii of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  50% of the amount by which the production costs directly attributable to the production of the property that are incurred by the corporation before the end of the year in respect of the property until the performance of the property before an audience or within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation, exceeds the aggregate of

(1)  the amount of any government assistance and non-government assistance attributable to those costs that the corporation or a person or partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, and that the corporation, person or partnership, as the case may be, has not repaid at that time pursuant to a legal obligation, and

(2)  the amount of any benefit or advantage attributable to those costs, that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, exceeds

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the production of the property for a taxation year preceding the year exceeds 300% of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a taxation year preceding the year in respect of the production of the property;

“qualified performance” of a corporation means a property that is a performance in respect of which the corporation holds, for one of the following periods, a favourable advance ruling given or a certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  the period covering the stage of pre-production of the property through the end of the first full year after the first performance of the property before an audience;

(b)  the period covering the second full year after the first performance of the property before an audience; or

(c)  the period covering the third full year after the first performance of the property before an audience;

“salary or wages” means the income computed pursuant to Chapters I and II of Title II of Book III.

For the purposes of the definition of “labour expenditure” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of that definition, the salaries or wages directly attributable to the production of a property that is a qualified performance are, where an eligible employee directly undertakes, supervises or supports the production of the property, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the production of the property;

(b)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, except such remuneration paid to a performing artist, or an expenditure as remuneration that is, or may reasonably be considered to be, incurred by a corporation, as a mandatary, on behalf of another person;

(b.1)  despite subparagraph a, in relation to a property that is a circus show, an aquatic show or an ice show in respect of which any of the periods specified in paragraphs a to c of the definition of “qualified performance” in the first paragraph began before 14 March 2008 and had not ended on 13 March 2008, a salary or wages or another remuneration does not include an expenditure that the corporation incurs in respect of the property before

i.  14 March 2008, or

ii.  if it is later, the date included in a period for which a favourable advance ruling has been given or a certificate has been issued by the Société de développement des entreprises culturelles in respect of the property, that is the date from which the Société de développement des entreprises culturelles recognizes the performance as qualifying for the purposes of this division;

(c)  the amount referred to in paragraph a or b of that definition shall be determined by considering, where the salary or wages, or remuneration, as the case may be, relates to the performance of the property before an audience, only the performances that occur in the three years after the first performance of the property before an audience;

(d)  the amount of the labour expenditure of a corporation for a taxation year in respect of a property is to be reduced, where applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds either to the salaries or wages described in paragraph a of that definition or to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, that are included in that labour expenditure of the corporation for the year, and the aggregate of

i.  the amount of any government assistance and non-government assistance attributable to the particular amount that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year,

ii.  the amount of any benefit or advantage attributable to the particular amount that a person or a partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for that year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property, or in any other form or manner, and

iii.  if the particular amount corresponds to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year, that is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in that subparagraph; and

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure for the year in respect of a property is deemed to be nil.

For the purposes of the definitions of “labour expenditure” and “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which any of the three periods in respect of which an amount is deemed to have been paid by the corporation under section 1029.8.36.0.0.11 is completed; and

(b)  no expenditure may be taken into consideration in computing a qualified labour expenditure of a corporation for a taxation year in respect of a property that is a qualified performance, or production costs directly attributable to the production of the property incurred before the end of the year, unless the expenditure is paid at the time the corporation first files with the Minister the prescribed form containing prescribed information provided for in the first paragraph of section 1029.8.36.0.0.11 for that taxation year.

For the purposes of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the production costs directly attributable to the production of a property that is a qualified performance are the following amounts, but do not include however the costs incurred for the broadcasting or promotion of the property:

i.  the portion of the production costs, other than the production fees and administration costs, to the extent that they are reasonable in the circumstances and included in the production cost, cost or capital cost, as the case may be, of the property to the corporation, and

ii.  the production fees and administration costs, to the extent that they are reasonable in the circumstances;

(b)  the production costs directly attributable to the production of a property that is a qualified performance include the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the production of the property, which corresponds to the portion of the depreciation of the particular property, for a taxation year, determined in accordance with the generally accepted accounting principles, relating to the use of the particular property by the corporation in the year, as part of the production of the property;

(b.1)  despite subparagraphs a and b, the production costs directly attributable to the production of a property that is a circus show, an aquatic show or an ice show referred to in subparagraph b.1 of the second paragraph do not include an expenditure that the corporation incurred in respect of the property before the date determined in accordance with that subparagraph b.1 and the portion of the cost of acquisition of a particular property referred to in subparagraph b is determined without taking into account the use of the particular property by the corporation before that date; and

(c)  the amount of a benefit attributable to production costs includes the portion of the proceeds of disposition by a corporation of a particular property used by it as part of the production of a property that is a qualified performance that relates to the portion of the cost of acquisition of the particular property that has already been included in the production costs of the property up to the amount of the portion of the cost of acquisition of the particular property that has already been so included in the production costs of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, an amount of assistance received by a corporation, another person or a partnership, as the case may be, is deemed, in respect of a property that is a qualified performance, to be repaid by the corporation, the other person or the partnership in a taxation year, pursuant to a legal obligation, if that amount

(a)  reduced, for the purpose of computing the amount that a corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.11, in respect of the property,

i.  because of subparagraph d of the second paragraph, a labour expenditure of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, a qualified labour expenditure of the corporation in respect of the property, or

iii.  (subparagraph repealed);

(b)  was not received by the corporation, the other person or the partnership; and

(c)  ceased in the taxation year to be an amount that the corporation, the other person or the partnership may reasonably expect to receive.

For the purposes of paragraph c of the definition of “qualified corporation” in the first paragraph, a corporation whose mission is cultural does not include a corporation whose mandate consists in making investments.

If the amount deemed to have been paid to the Minister by a corporation on account of its tax payable for a taxation year under section 1029.8.36.0.0.11 is determined

(a)  in relation to the portion of a qualified labour expenditure referred to in subparagraph a of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “300%” was replaced wherever it appears by “342.85%”; and

(b)  in relation to the portion of a qualified labour expenditure referred to in subparagraph a.1 of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “300%” was replaced wherever it appears by “285.71%”.

2000, c. 39, s. 147; 2001, c. 51, s. 115; 2002, c. 9, s. 63; 2003, c. 9, s. 208; 2004, c. 21, s. 314; 2005, c. 1, s. 234; 2005, c. 23, s. 159; 2005, c. 38, s. 245; 2006, c. 13, s. 116; 2006, c. 36, s. 130; 2007, c. 12, s. 156; 2010, c. 5, s. 153; 2011, c. 1, s. 67; 2013, c. 10, s. 108.

2011-02-17

1029.8.36.0.0.10. In this division,

“eligible employee” of an individual, a corporation or a partnership means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“eligible individual” means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means, subject to the second paragraph, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances, but does not include any amount relating to the broadcasting or promotion of the property:

(a)  the salaries or wages directly attributable to the production of the property that are incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in relation to the stages of production of the property, from the preproduction stage to the performance before an audience, or in relation to another stage of production of the property carried out after the performance before an audience within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation to its eligible employees; and

(b)  the portion of the remuneration, other than salary or wages, that relates to services rendered to the corporation in relation to the production of the property and that is related to the stages of production of the property provided for in paragraph a, that is incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, and that is paid by the corporation

i.  to an eligible individual, to the extent that that portion of the remuneration is reasonably attributable to services personally rendered by the eligible individual as part of the production of the property, to the wages of the eligible individual’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by another eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists (chapter S-32.1) and to whom that portion of the remuneration is paid again by the eligible individual,

ii.  to a particular corporation having an establishment in Québec, other than a corporation referred to in subparagraph iii, to the extent that that portion of the remuneration is reasonably attributable either to the wages of the particular corporation’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the particular corporation,

iii.  to a corporation having an establishment in Québec all the issued capital stock of which, except directors’ qualifying shares, belongs to an eligible individual and the activities of which consist principally in the provision of the eligible individual’s services, to the extent that that portion of the remuneration is reasonably attributable to services rendered by the eligible individual as part of the production of the property, or

iv.  to a partnership carrying on a business in Québec and having an establishment therein, to the extent that that portion of the remuneration is reasonably attributable to services rendered, as part of the production of the property, by an eligible individual who is a member of the partnership, to the wages of the partnership’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the partnership;

“qualified corporation” for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on therein a performance production business that is a qualified business, but does not include

(a)  a corporation that, at any time in the year or during the 24 months preceding the year, is controlled, directly or indirectly in any manner whatever, by one or more persons not resident in Québec;

(a.1)  a corporation that, at any time in the year or during the 24 months preceding the year, would be controlled by a particular person, if each share of the capital stock of the corporation owned by a person not resident in Québec were owned by the particular person;

(b)  a corporation that is exempt from tax for the year under Book VIII; or

(c)  a corporation that is controlled, directly or indirectly in any manner whatever, by one or more corporations that are exempt from tax under Book VIII at any time in the year and whose mission is cultural;

(d)  (paragraph repealed);

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure of the corporation for the year in respect of the property,

(2)  any repayment made in the year by the corporation, another person or a partnership, as the case may be, pursuant to a legal obligation, of any assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the property, in subparagraph ii or in subparagraph d of the second paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the production of the property, in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, up to 300% of the tax under Part III.1.0.4 that the corporation is required to pay in a taxation year preceding the year because of that subparagraph i in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure of the corporation or an amount determined under subparagraph 2, exceeds the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the property, for a taxation year preceding the year, exceeds 300% of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a year preceding the year by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance and non-government assistance that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, under subparagraph i of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year,

(2)  the amount of any benefit or advantage that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, to the extent that that amount has not, under subparagraph ii of subparagraph d of the second paragraph, reduced the amount of that labour expenditure of the corporation for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that, for a taxation year preceding the year in respect of the property, is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph b of the definition of “labour expenditure”, to the extent that the amount has not, under subparagraph iii of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  50% of the amount by which the production costs directly attributable to the production of the property that are incurred by the corporation before the end of the year in respect of the property until the performance of the property before an audience or within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation, exceeds the aggregate of

(1)  the amount of any government assistance and non-government assistance attributable to those costs that the corporation or a person or partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, and that the corporation, person or partnership, as the case may be, has not repaid at that time pursuant to a legal obligation, and

(2)  the amount of any benefit or advantage attributable to those costs, that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, exceeds

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the production of the property for a taxation year preceding the year exceeds 300% of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a taxation year preceding the year in respect of the production of the property;

“qualified performance” of a corporation means a property that is a performance in respect of which the corporation holds, for one of the following periods, a favourable advance ruling given or a certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  the period covering the stage of pre-production of the property through the end of the first full year after the first performance of the property before an audience;

(b)  the period covering the second full year after the first performance of the property before an audience; or

(c)  the period covering the third full year after the first performance of the property before an audience;

“salary or wages” means the income computed pursuant to Chapters I and II of Title II of Book III.

For the purposes of the definition of “labour expenditure” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of that definition, the salaries or wages directly attributable to the production of a property that is a qualified performance are, where an eligible employee directly undertakes, supervises or supports the production of the property, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the production of the property;

(b)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, except such remuneration paid to a performing artist, or an expenditure as remuneration that is, or may reasonably be considered to be, incurred by a corporation, as a mandatary, on behalf of another person;

(b.1)  despite subparagraph a, in relation to a property that is a circus show, an aquatic show or an ice show in respect of which any of the periods specified in paragraphs a to c of the definition of “qualified performance” in the first paragraph began before 14 March 2008 and had not ended on 13 March 2008, a salary or wages or another remuneration does not include an expenditure that the corporation incurs in respect of the property before

i.  14 March 2008, or

ii.  if it is later, the date included in a period for which a favourable advance ruling has been given or a certificate has been issued by the Société de développement des entreprises culturelles in respect of the property, that is the date from which the Société de développement des entreprises culturelles recognizes the performance as qualifying for the purposes of this division;

(c)  the amount referred to in paragraph a or b of that definition shall be determined by considering, where the salary or wages, or remuneration, as the case may be, relates to the performance of the property before an audience, only the performances that occur in the three years after the first performance of the property before an audience;

(d)  the amount of the labour expenditure of a corporation for a taxation year in respect of a property is to be reduced, where applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds either to the salaries or wages described in paragraph a of that definition or to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, that are included in that labour expenditure of the corporation for the year, and the aggregate of

i.  the amount of any government assistance and non-government assistance attributable to the particular amount that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year,

ii.  the amount of any benefit or advantage attributable to the particular amount that the corporation has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for that year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property, or in any other form or manner, and

iii.  if the particular amount corresponds to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year, that is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in that subparagraph; and

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure for the year in respect of a property is deemed to be nil.

For the purposes of the definitions of “labour expenditure” and “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which any of the three periods in respect of which an amount is deemed to have been paid by the corporation under section 1029.8.36.0.0.11 is completed; and

(b)  no expenditure may be taken into consideration in computing a labour expenditure of a corporation for a taxation year in respect of a property that is a qualified performance, or production costs directly attributable to the production of the property incurred before the end of the year, unless the expenditure is paid at the time the corporation first files with the Minister the prescribed form containing the prescribed information provided for in the first paragraph of section 1029.8.36.0.0.11 for that taxation year.

For the purposes of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the production costs directly attributable to the production of a property that is a qualified performance are the following amounts, but do not include however the costs incurred for the broadcasting or promotion of the property:

i.  the portion of the production costs, other than the production fees and administration costs, to the extent that they are reasonable in the circumstances and included in the production cost, cost or capital cost, as the case may be, of the property to the corporation, and

ii.  the production fees and administration costs, to the extent that they are reasonable in the circumstances;

(b)  the production costs directly attributable to the production of a property that is a qualified performance include the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the production of the property, which corresponds to the portion of the depreciation of the particular property, for a taxation year, determined in accordance with the generally accepted accounting principles, relating to the use of the particular property by the corporation in the year, as part of the production of the property;

(b.1)  despite subparagraphs a and b, the production costs directly attributable to the production of a property that is a circus show, an aquatic show or an ice show referred to in subparagraph b.1 of the second paragraph do not include an expenditure that the corporation incurred in respect of the property before the date determined in accordance with that subparagraph b.1 and the portion of the cost of acquisition of a particular property referred to in subparagraph b is determined without taking into account the use of the particular property by the corporation before that date; and

(c)  the amount of a benefit attributable to production costs includes the portion of the proceeds of disposition by a corporation of a particular property used by it as part of the production of a property that is a qualified performance that relates to the portion of the cost of acquisition of the particular property that has already been included in the production costs of the property up to the amount of the portion of the cost of acquisition of the particular property that has already been so included in the production costs of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, an amount of assistance received by a corporation, another person or a partnership, as the case may be, is deemed, in respect of a property that is a qualified performance, to be repaid by the corporation, the other person or the partnership in a taxation year, pursuant to a legal obligation, if that amount

(a)  reduced, for the purpose of computing the amount that a corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.11, in respect of the property,

i.  because of subparagraph d of the second paragraph, a labour expenditure of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, a qualified labour expenditure of the corporation in respect of the property, or

iii.  (subparagraph repealed);

(b)  was not received by the corporation, the other person or the partnership; and

(c)  ceased in the taxation year to be an amount that the corporation, the other person or the partnership may reasonably expect to receive.

For the purposes of paragraph c of the definition of “qualified corporation” in the first paragraph, a corporation whose mission is cultural does not include a corporation whose mandate consists in making investments.

If the amount deemed to have been paid to the Minister by a corporation on account of its tax payable for a taxation year under section 1029.8.36.0.0.11 is determined

(a)  in relation to the portion of a qualified labour expenditure referred to in subparagraph a of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “300%” was replaced wherever it appears by “342.85%”; and

(b)  in relation to the portion of a qualified labour expenditure referred to in subparagraph a.1 of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “300%” was replaced wherever it appears by “285.71%”.

2000, c. 39, s. 147; 2001, c. 51, s. 115; 2002, c. 9, s. 63; 2003, c. 9, s. 208; 2004, c. 21, s. 314; 2005, c. 1, s. 234; 2005, c. 23, s. 159; 2005, c. 38, s. 245; 2006, c. 13, s. 116; 2006, c. 36, s. 130; 2007, c. 12, s. 156; 2010, c. 5, s. 153; 2011, c. 1, s. 67.

2010-04-20

1029.8.36.0.0.10. In this division,

“eligible employee” of an individual, a corporation or a partnership means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“eligible individual” means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means, subject to the second paragraph, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances, but does not include any amount relating to the broadcasting or promotion of the property:

(a)  the salaries or wages directly attributable to the production of the property that are incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in relation to the stages of production of the property, from the preproduction stage to the performance before an audience, or in relation to another stage of production of the property carried out after the performance before an audience within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation to its eligible employees; and

(b)  the portion of the remuneration, other than salary or wages, that relates to services rendered to the corporation in relation to the production of the property and that is related to the stages of production of the property provided for in paragraph a, that is incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, and that is paid by the corporation

i.  to an eligible individual, to the extent that that portion of the remuneration is reasonably attributable to services personally rendered by the eligible individual as part of the production of the property, to the wages of the eligible individual’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by another eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists (chapter S-32.1) and to whom that portion of the remuneration is paid again by the eligible individual,

ii.  to a particular corporation having an establishment in Québec, other than a corporation referred to in subparagraph iii, to the extent that that portion of the remuneration is reasonably attributable either to the wages of the particular corporation’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the particular corporation,

iii.  to a corporation having an establishment in Québec all the issued capital stock of which, except directors’ qualifying shares, belongs to an eligible individual and the activities of which consist principally in the provision of the eligible individual’s services, to the extent that that portion of the remuneration is reasonably attributable to services rendered by the eligible individual as part of the production of the property, or

iv.  to a partnership carrying on a business in Québec and having an establishment therein, to the extent that that portion of the remuneration is reasonably attributable to services rendered, as part of the production of the property, by an eligible individual who is a member of the partnership, to the wages of the partnership’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the partnership;

“qualified corporation” for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on therein a performance production business that is a qualified business, but does not include

(a)  a corporation that, at any time in the year or during the 24 months preceding the year, is controlled, directly or indirectly in any manner whatever, by one or more persons not resident in Québec;

(a.1)  a corporation that, at any time in the year or during the 24 months preceding the year, would be controlled by a particular person, if each share of the capital stock of the corporation owned by a person not resident in Québec were owned by the particular person;

(b)  a corporation that is exempt from tax for the year under Book VIII; or

(c)  a corporation that is controlled, directly or indirectly in any manner whatever, by one or more corporations that are exempt from tax under Book VIII at any time in the year and whose mission is cultural;

(d)  (paragraph repealed);

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure of the corporation for the year in respect of the property,

(2)  any repayment made in the year by the corporation, another person or a partnership, as the case may be, pursuant to a legal obligation, of any assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the property, in subparagraph ii or in subparagraph d of the second paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the production of the property, in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, up to 300% of the tax under Part III.1.0.4 that the corporation is required to pay in a taxation year preceding the year because of that subparagraph i in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure of the corporation or an amount determined under subparagraph 2, exceeds the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the property, for a taxation year preceding the year, exceeds 300% of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a year preceding the year by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance and non-government assistance that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, under subparagraph i of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year,

(2)  the amount of any benefit or advantage that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, to the extent that that amount has not, under subparagraph ii of subparagraph d of the second paragraph, reduced the amount of that labour expenditure of the corporation for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that, for a taxation year preceding the year in respect of the property, is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph b of the definition of “labour expenditure”, to the extent that the amount has not, under subparagraph iii of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  50% of the amount by which the production costs directly attributable to the production of the property that are incurred by the corporation before the end of the year in respect of the property until the performance of the property before an audience or within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation, exceeds the aggregate of

(1)  the amount of any government assistance and non-government assistance attributable to those costs that the corporation or a person or partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, and that the corporation, person or partnership, as the case may be, has not repaid at that time pursuant to a legal obligation, and

(2)  the amount of any benefit or advantage attributable to those costs, that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, exceeds

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the production of the property for a taxation year preceding the year exceeds 300% of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a taxation year preceding the year in respect of the production of the property;

“qualified performance” of a corporation means a property that is a performance in respect of which the corporation holds, for one of the following periods, a favourable advance ruling given or a certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  the period covering the stage of pre-production of the property through the end of the first full year after the first performance of the property before an audience;

(b)  the period covering the second full year after the first performance of the property before an audience; or

(c)  the period covering the third full year after the first performance of the property before an audience;

“salary or wages” means the income computed pursuant to Chapters I and II of Title II of Book III.

For the purposes of the definition of “labour expenditure” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of that definition, the salaries or wages directly attributable to the production of a property that is a qualified performance are, where an eligible employee directly undertakes, supervises or supports the production of the property, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the production of the property;

(b)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, except such remuneration paid to a performing artist, or an expenditure as remuneration that is, or may reasonably be considered to be, incurred by a corporation, as a mandatary, on behalf of another person;

(c)  the amount referred to in paragraph a or b of that definition shall be determined by considering, where the salary or wages, or remuneration, as the case may be, relates to the performance of the property before an audience, only the performances that occur in the three years after the first performance of the property before an audience;

(d)  the amount of the labour expenditure of a corporation for a taxation year in respect of a property is to be reduced, where applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds either to the salaries or wages described in paragraph a of that definition or to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, that are included in that labour expenditure of the corporation for the year, and the aggregate of

i.  the amount of any government assistance and non-government assistance attributable to the particular amount that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year,

ii.  the amount of any benefit or advantage attributable to the particular amount that the corporation has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for that year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property, or in any other form or manner, and

iii.  if the particular amount corresponds to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year, that is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in that subparagraph; and

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure for the year in respect of a property is deemed to be nil.

For the purposes of the definitions of “labour expenditure” and “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which any of the three periods in respect of which an amount is deemed to have been paid by the corporation under section 1029.8.36.0.0.11 is completed; and

(b)  no expenditure may be taken into consideration in computing a labour expenditure of a corporation for a taxation year in respect of a property that is a qualified performance, or production costs directly attributable to the production of the property incurred before the end of the year, unless the expenditure is paid at the time the corporation first files with the Minister the prescribed form containing the prescribed information provided for in the first paragraph of section 1029.8.36.0.0.11 for that taxation year.

For the purposes of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the production costs directly attributable to the production of a property that is a qualified performance are the following amounts, but do not include however the costs incurred for the broadcasting or promotion of the property:

i.  the portion of the production costs, other than the production fees and administration costs, to the extent that they are reasonable in the circumstances and included in the production cost, cost or capital cost, as the case may be, of the property to the corporation, and

ii.  the production fees and administration costs, to the extent that they are reasonable in the circumstances;

(b)  the production costs directly attributable to the production of a property that is a qualified performance include the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the production of the property, which corresponds to the portion of the depreciation of the particular property, for a taxation year, determined in accordance with the generally accepted accounting principles, relating to the use of the particular property by the corporation in the year, as part of the production of the property; and

(c)  the amount of a benefit attributable to production costs includes the portion of the proceeds of disposition by a corporation of a particular property used by it as part of the production of a property that is a qualified performance that relates to the portion of the cost of acquisition of the particular property that has already been included in the production costs of the property up to the amount of the portion of the cost of acquisition of the particular property that has already been so included in the production costs of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, an amount of assistance received by a corporation, another person or a partnership, as the case may be, is deemed, in respect of a property that is a qualified performance, to be repaid by the corporation, the other person or the partnership in a taxation year, pursuant to a legal obligation, if that amount

(a)  reduced, for the purpose of computing the amount that a corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.11, in respect of the property,

i.  because of subparagraph d of the second paragraph, a labour expenditure of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, a qualified labour expenditure of the corporation in respect of the property, or

iii.  (subparagraph repealed);

(b)  was not received by the corporation, the other person or the partnership; and

(c)  ceased in the taxation year to be an amount that the corporation, the other person or the partnership may reasonably expect to receive.

For the purposes of paragraph c of the definition of “qualified corporation” in the first paragraph, a corporation whose mission is cultural does not include a corporation whose mandate consists in making investments.

If the amount deemed to have been paid to the Minister by a corporation on account of its tax payable for a taxation year under section 1029.8.36.0.0.11 is determined

(a)  in relation to the portion of a qualified labour expenditure referred to in subparagraph a of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “300%” was replaced wherever it appears by “342.85%”; and

(b)  in relation to the portion of a qualified labour expenditure referred to in subparagraph a.1 of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph is to be read as if “300%” was replaced wherever it appears by “285.7143%”.

2000, c. 39, s. 147; 2001, c. 51, s. 115; 2002, c. 9, s. 63; 2003, c. 9, s. 208; 2004, c. 21, s. 314; 2005, c. 1, s. 234; 2005, c. 23, s. 159; 2005, c. 38, s. 245; 2006, c. 13, s. 116; 2006, c. 36, s. 130; 2007, c. 12, s. 156; 2010, c. 5, s. 153.

2007-11-07

1029.8.36.0.0.10. In this division,

“eligible employee” of an individual, a corporation or a partnership means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“eligible individual” means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means, subject to the second paragraph, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances, but does not include any amount relating to the broadcasting or promotion of the property:

(a)  the salaries or wages directly attributable to the production of the property that are incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in relation to the stages of production of the property, from the preproduction stage to the performance before an audience, or in relation to another stage of production of the property carried out after the performance before an audience within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation to its eligible employees; and

(b)  the portion of the remuneration, other than salary or wages, that relates to services rendered to the corporation in relation to the production of the property and that is related to the stages of production of the property provided for in paragraph a, that is incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, and that is paid by the corporation

i.  to an eligible individual, to the extent that that portion of the remuneration is reasonably attributable to services personally rendered by the eligible individual as part of the production of the property, to the wages of the eligible individual’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by another eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists (chapter S-32.1) and to whom that portion of the remuneration is paid again by the eligible individual,

ii.  to a particular corporation having an establishment in Québec, other than a corporation referred to in subparagraph iii, to the extent that that portion of the remuneration is reasonably attributable either to the wages of the particular corporation’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the particular corporation,

iii.  to a corporation having an establishment in Québec all the issued capital stock of which, except directors’ qualifying shares, belongs to an eligible individual and the activities of which consist principally in the provision of the eligible individual’s services, to the extent that that portion of the remuneration is reasonably attributable to services rendered by the eligible individual as part of the production of the property, or

iv.  to a partnership carrying on a business in Québec and having an establishment therein, to the extent that that portion of the remuneration is reasonably attributable to services rendered, as part of the production of the property, by an eligible individual who is a member of the partnership, to the wages of the partnership’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the partnership;

“qualified corporation” for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on therein a performance production business that is a qualified business, but does not include

(a)  a corporation that, at any time in the year or during the 24 months preceding the year, is controlled, directly or indirectly in any manner whatever, by one or more persons not resident in Québec;

(a.1)  a corporation that, at any time in the year or during the 24 months preceding the year, would be controlled by a particular person, if each share of the capital stock of the corporation owned by a person not resident in Québec were owned by the particular person;

(b)  a corporation that is exempt from tax for the year under Book VIII; or

(c)  a corporation that is controlled, directly or indirectly in any manner whatever, by one or more corporations that are exempt from tax under Book VIII at any time in the year and whose mission is cultural;

(d)  (paragraph repealed);

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure of the corporation for the year in respect of the property,

(2)  any repayment made in the year by the corporation, another person or a partnership, as the case may be, pursuant to a legal obligation, of any assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the property, in subparagraph ii or in subparagraph d of the second paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance that was received by the corporation, the other person or the partnership and that is referred to, in relation to the production of the property, in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, up to 300% of the tax under Part III.1.0.4 that the corporation is required to pay in a taxation year preceding the year because of that subparagraph i in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure of the corporation or an amount determined under subparagraph 2, exceeds the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the property, for a taxation year preceding the year, exceeds 300% of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a year preceding the year by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance and non-government assistance that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, under subparagraph i of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year,

(2)  the amount of any benefit or advantage that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, to the extent that that amount has not, under subparagraph ii of subparagraph d of the second paragraph, reduced the amount of that labour expenditure of the corporation for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that, for a taxation year preceding the year in respect of the property, is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph b of the definition of “labour expenditure”, to the extent that the amount has not, under subparagraph iii of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  45% of the amount by which the production costs directly attributable to the production of the property that are incurred by the corporation before the end of the year in respect of the property until the performance of the property before an audience or within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation, exceeds the aggregate of

(1)  the amount of any government assistance and non-government assistance attributable to those costs that the corporation or a person or partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, and that the corporation, person or partnership, as the case may be, has not repaid at that time pursuant to a legal obligation, and

(2)  the amount of any benefit or advantage attributable to those costs, that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, exceeds

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the production of the property for a taxation year preceding the year exceeds 300% of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a taxation year preceding the year in respect of the production of the property;

“qualified performance” of a corporation means a property that is a performance in respect of which the corporation holds, for one of the following periods, a favourable advance ruling given or a certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  the period covering the stage of pre-production of the property through the end of the first full year after the first performance of the property before an audience;

(b)  the period covering the second full year after the first performance of the property before an audience; or

(c)  the period covering the third full year after the first performance of the property before an audience;

“salary or wages” means the income computed pursuant to Chapters I and II of Title II of Book III.

For the purposes of the definition of “labour expenditure” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of that definition, the salaries or wages directly attributable to the production of a property that is a qualified performance are, where an eligible employee directly undertakes, supervises or supports the production of the property, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the production of the property;

(b)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, except such remuneration paid to a performing artist, or an expenditure as remuneration that is, or may reasonably be considered to be, incurred by a corporation, as a mandatary, on behalf of another person;

(c)  the amount referred to in paragraph a or b of that definition shall be determined by considering, where the salary or wages, or remuneration, as the case may be, relates to the performance of the property before an audience, only the performances that occur in the three years after the first performance of the property before an audience;

(d)  the amount of the labour expenditure of a corporation for a taxation year in respect of a property is to be reduced, where applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds either to the salaries or wages described in paragraph a of that definition or to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, that are included in that labour expenditure of the corporation for the year, and the aggregate of

i.  the amount of any government assistance and non-government assistance attributable to the particular amount that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year,

ii.  the amount of any benefit or advantage attributable to the particular amount that the corporation has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for that year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property, or in any other form or manner, and

iii.  if the particular amount corresponds to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition, the amount of any government assistance and non-government assistance that an eligible individual, another corporation or a partnership with whom or with which the corporation is not dealing at arm’s length has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for that year, that is attributable to services rendered by an eligible individual or to the wages of the eligible employees of the eligible individual, the other corporation or the partnership, as the case may be, that are referred to in that subparagraph; and

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure for the year in respect of a property is deemed to be nil.

For the purposes of the definitions of “labour expenditure” and “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which any of the three periods in respect of which an amount is deemed to have been paid by the corporation under section 1029.8.36.0.0.11 is completed; and

(b)  no expenditure may be taken into consideration in computing a labour expenditure of a corporation for a taxation year in respect of a property that is a qualified performance, or production costs directly attributable to the production of the property incurred before the end of the year, unless the expenditure is paid at the time the corporation first files with the Minister the prescribed form containing the prescribed information provided for in the first paragraph of section 1029.8.36.0.0.11 for that taxation year.

For the purposes of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the production costs directly attributable to the production of a property that is a qualified performance are the following amounts, but do not include however the costs incurred for the broadcasting or promotion of the property:

i.  the portion of the production costs, other than the production fees and administration costs, to the extent that they are reasonable in the circumstances and included in the production cost, cost or capital cost, as the case may be, of the property to the corporation, and

ii.  the production fees and administration costs, to the extent that they are reasonable in the circumstances;

(b)  the production costs directly attributable to the production of a property that is a qualified performance include the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the production of the property, which corresponds to the portion of the depreciation of the particular property, for a taxation year, determined in accordance with the generally accepted accounting principles, relating to the use of the particular property by the corporation in the year, as part of the production of the property; and

(c)  the amount of a benefit attributable to production costs includes the portion of the proceeds of disposition by a corporation of a particular property used by it as part of the production of a property that is a qualified performance that relates to the portion of the cost of acquisition of the particular property that has already been included in the production costs of the property up to the amount of the portion of the cost of acquisition of the particular property that has already been so included in the production costs of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, an amount of assistance received by a corporation, another person or a partnership, as the case may be, is deemed, in respect of a property that is a qualified performance, to be repaid by the corporation, the other person or the partnership in a taxation year, pursuant to a legal obligation, if that amount

(a)  reduced, for the purpose of computing the amount that a corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.11, in respect of the property,

i.  because of subparagraph d of the second paragraph, a labour expenditure of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, a qualified labour expenditure of the corporation in respect of the property, or

iii.  (subparagraph repealed);

(b)  was not received by the corporation, the other person or the partnership; and

(c)  ceased in the taxation year to be an amount that the corporation, the other person or the partnership may reasonably expect to receive.

For the purposes of paragraph c of the definition of “qualified corporation” in the first paragraph, a corporation whose mission is cultural does not include a corporation whose mandate consists in making investments.

Where the amount deemed to have been paid to the Minister by a corporation on account of its tax payable for a taxation year under section 1029.8.36.0.0.11 is determined in relation to the portion of a qualified labour expenditure referred to in subparagraph a of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph shall be read with “300%”, wherever it appears, replaced by “342.85%”.

2000, c. 39, s. 147; 2001, c. 51, s. 115; 2002, c. 9, s. 63; 2003, c. 9, s. 208; 2004, c. 21, s. 314; 2005, c. 1, s. 234; 2005, c. 23, s. 159; 2005, c. 38, s. 245; 2006, c. 13, s. 116; 2006, c. 36, s. 130; 2007, c. 12, s. 156.

2006-12-06

1029.8.36.0.0.10. In this division,

“eligible employee” of an individual, a corporation or a partnership means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“eligible individual” means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means, subject to the second paragraph, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances, but does not include any amount relating to the broadcasting or promotion of the property:

(a)  the salaries or wages directly attributable to the production of the property that are incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in relation to the stages of production of the property, from the preproduction stage to the performance before an audience, or in relation to another stage of production of the property carried out after the performance before an audience within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation to its eligible employees; and

(b)  the portion of the remuneration, other than salary or wages, that relates to services rendered to the corporation in relation to the production of the property and that is related to the stages of production of the property provided for in paragraph a, that is incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, and that is paid by the corporation

i.  to an eligible individual, to the extent that that portion of the remuneration is reasonably attributable to services personally rendered by the eligible individual as part of the production of the property, to the wages of the eligible individual’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by another eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists (chapter S-32.1) and to whom that portion of the remuneration is paid again by the eligible individual,

ii.  to a particular corporation having an establishment in Québec, other than a corporation referred to in subparagraph iii, to the extent that that portion of the remuneration is reasonably attributable either to the wages of the particular corporation’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the particular corporation,

iii.  to a corporation having an establishment in Québec all the issued capital stock of which, except directors’ qualifying shares, belongs to an eligible individual and the activities of which consist principally in the provision of the eligible individual’s services, to the extent that that portion of the remuneration is reasonably attributable to services rendered by the eligible individual as part of the production of the property, or

iv.  to a partnership carrying on a business in Québec and having an establishment therein, to the extent that that portion of the remuneration is reasonably attributable to services rendered, as part of the production of the property, by an eligible individual who is a member of the partnership, to the wages of the partnership’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the partnership;

“qualified corporation” for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on therein a performance production business that is a qualified business, but does not include

(a)  a corporation that, at any time in the year or during the 24 months preceding the year, is controlled, directly or indirectly in any manner whatever, by one or more persons not resident in Québec;

(a.1)  a corporation that, at any time in the year or during the 24 months preceding the year, would be controlled by a particular person, if each share of the capital stock of the corporation owned by a person not resident in Québec were owned by the particular person;

(b)  a corporation that is exempt from tax for the year under Book VIII; or

(c)  a corporation that is controlled, directly or indirectly in any manner whatever, by one or more corporations that are exempt from tax under Book VIII at any time in the year and whose mission is cultural;

(d)  (paragraph repealed);

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified performance means the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure of the corporation for the year in respect of the property,

(2)  any repayment made by the corporation in the year, pursuant to a legal obligation, of any assistance referred to, in relation to the property, in subparagraph ii or in subparagraph d of the second paragraph in respect of a taxation year for which the corporation is a qualified corporation or of any other assistance referred to in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14 in relation to the production of the property not exceeding 300% of the tax under Part III.1.0.4 that the corporation is required to pay in a taxation year preceding the year by reason of that subparagraph i in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure of the corporation or an amount determined under subparagraph 2, exceeds the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the property, for a taxation year preceding the year,exceeds 300% of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a year preceding the year by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance and non-government assistance that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, under subparagraph i of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year, and

(2)  the amount of any benefit or advantage that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, to the extent that that amount has not, under subparagraph ii of subparagraph d of the second paragraph, reduced the amount of that labour expenditure of the corporation for that preceding year; and

(b)  the amount by which

i.  45% of the amount by which the production costs directly attributable to the production of the property that are incurred by the corporation before the end of the year in respect of the property until the performance of the property before an audience or within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation, exceeds the aggregate of

(1)  the amount of any government assistance and non-government assistance attributable to those costs, that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year and that it has not repaid at that time pursuant to a legal obligation, and

(2)  the amount of any benefit or advantage attributable to those costs, that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, exceeds

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the production of the property for a taxation year preceding the year exceeds 300% of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a taxation year preceding the year in respect of the production of the property;

“qualified performance” of a corporation means a property that is a performance in respect of which the corporation holds, for one of the following periods, a favourable advance ruling given or a certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  the period covering the stage of pre-production of the property through the end of the first full year after the first performance of the property before an audience;

(b)  the period covering the second full year after the first performance of the property before an audience; or

(c)  the period covering the third full year after the first performance of the property before an audience;

“salary or wages” means the income computed pursuant to Chapters I and II of Title II of Book III.

For the purposes of the definition of “labour expenditure” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of that definition, the salaries or wages directly attributable to the production of a property that is a qualified performance are, where an eligible employee directly undertakes, supervises or supports the production of the property, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the production of the property;

(b)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, except such remuneration paid to a performing artist, or an expenditure as remuneration that is, or may reasonably be considered to be, incurred by a corporation, as a mandatary, on behalf of another person;

(c)  the amount referred to in paragraph a or b of that definition shall be determined by considering, where the salary or wages, or remuneration, as the case may be, relates to the performance of the property before an audience, only the performances that occur in the three years after the first performance of the property before an audience;

(d)  the amount of the labour expenditure of a corporation for a taxation year in respect of a property shall be reduced, where applicable, by the aggregate of

i.  the amount of any government assistance and non-government assistance attributable to each of the amounts described in paragraph a of that definition and in any of subparagraphs i to iv of paragraph b of that definition, where applicable, included in that labour expenditure of the corporation for the year, that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, up to each of those amounts, as the case may be, and

ii.  the amount of any benefit or advantage attributable to each of the amounts described in paragraph a of that definition and in any of subparagraphs i to iv of paragraph b of that definition, where applicable, included in that labour expenditure of the corporation for the year, that a person or partnership has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property, or in any other form or manner, up to each of those amounts, as the case may be; and

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure for the year in respect of a property is deemed to be nil.

For the purposes of the definitions of “labour expenditure” and “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which any of the three periods in respect of which an amount is deemed to have been paid by the corporation under section 1029.8.36.0.0.11 is completed; and

(b)  no expenditure may be taken into consideration in computing a labour expenditure of a corporation for a taxation year in respect of a property that is a qualified performance, or production costs directly attributable to the production of the property incurred before the end of the year, unless the expenditure is paid at the time the corporation first files with the Minister the prescribed form containing the prescribed information provided for in the first paragraph of section 1029.8.36.0.0.11 for that taxation year.

For the purposes of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph, the following rules apply:

(a)  the production costs directly attributable to the production of a property that is a qualified performance are the following amounts, but do not include however the costs incurred for the broadcasting or promotion of the property:

i.  the portion of the production costs, other than the production fees and administration costs, to the extent that they are reasonable in the circumstances and included in the production cost, cost or capital cost, as the case may be, of the property to the corporation, and

ii.  the production fees and administration costs, to the extent that they are reasonable in the circumstances;

(b)  the production costs directly attributable to the production of a property that is a qualified performance include the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the production of the property, which corresponds to the portion of the depreciation of the particular property, for a taxation year, determined in accordance with the generally accepted accounting principles, relating to the use of the particular property by the corporation in the year, as part of the production of the property; and

(c)  the amount of a benefit attributable to production costs includes the portion of the proceeds of disposition by a corporation of a particular property used by it as part of the production of a property that is a qualified performance that relates to the portion of the cost of acquisition of the particular property that has already been included in the production costs of the property as a depreciation up to the amount of the portion of the cost of acquisition of the particular property that has already been so included in the production costs of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, and of subparagraph i of paragraph b of that definition, an amount of assistance is deemed, in respect of a property that is a qualified performance, to be repaid by a corporation in a taxation year, pursuant to a legal obligation, where that amount

(a)  reduced, for the purpose of computing the amount that the corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.11, in respect of the property,

i.  because of subparagraph d of the second paragraph, a labour expenditure of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure” in the first paragraph, a qualified labour expenditure of the corporation in respect of the property, or

iii.  because of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph, the production costs of the corporation, in respect of the property, for the year or for a preceding taxation year;

(b)  was not received by the corporation; and

(c)  ceased in the taxation year to be an amount that the corporation may reasonably expect to receive.

For the purposes of paragraph c of the definition of “qualified corporation” in the first paragraph, a corporation whose mission is cultural does not include a corporation whose mandate consists in making investments.

Where the amount deemed to have been paid to the Minister by a corporation on account of its tax payable for a taxation year under section 1029.8.36.0.0.11 is determined in relation to the portion of a qualified labour expenditure referred to in subparagraph a of the first paragraph of that section, the definition of “qualified labour expenditure” in the first paragraph shall be read with “300%”, wherever it appears, replaced by “342.85%”.

2000, c. 39, s. 147; 2001, c. 51, s. 115; 2002, c. 9, s. 63; 2003, c. 9, s. 208; 2004, c. 21, s. 314; 2005, c. 1, s. 234; 2005, c. 23, s. 159; 2005, c. 38, s. 245; 2006, c. 13, s. 116; 2006, c. 36, s. 130.

2006-06-13

1029.8.36.0.0.10. In this division,

"eligible employee" of an individual, a corporation or a partnership means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

"eligible individual" means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

"labour expenditure" of a corporation for a taxation year in respect of a property that is a qualified performance means, subject to the second paragraph, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances, but does not include any amount relating to the broadcasting or promotion of the property:

(a)  the salaries or wages directly attributable to the production of the property that are incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in relation to the stages of production of the property, from the preproduction stage to the performance before an audience, or in relation to another stage of production of the property carried out after the performance before an audience within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation to its eligible employees; and

(b)  the portion of the remuneration, other than salary or wages, that relates to services rendered to the corporation in relation to the production of the property and that is related to the stages of production of the property provided for in paragraph a, that is incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, and that is paid by the corporation

i.  to an eligible individual, to the extent that that portion of the remuneration is reasonably attributable to services personally rendered by the eligible individual as part of the production of the property, to the wages of the eligible individual’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by another eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists (chapter S-32.1) and to whom that portion of the remuneration is paid again by the eligible individual,

ii.  to a particular corporation having an establishment in Québec, other than a corporation referred to in subparagraph iii, to the extent that that portion of the remuneration is reasonably attributable either to the wages of the particular corporation’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the particular corporation,

iii.  to a corporation having an establishment in Québec all the issued capital stock of which, except directors’ qualifying shares, belongs to an eligible individual and the activities of which consist principally in the provision of the eligible individual’s services, to the extent that that portion of the remuneration is reasonably attributable to services rendered by the eligible individual as part of the production of the property, or

iv.  to a partnership carrying on a business in Québec and having an establishment therein, to the extent that that portion of the remuneration is reasonably attributable to services rendered, as part of the production of the property, by an eligible individual who is a member of the partnership, to the wages of the partnership’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the partnership;

"qualified corporation" for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on therein a performance production business that is a qualified business, but does not include

(a)  a corporation that, at any time in the year or during the 24 months preceding the year, is controlled, directly or indirectly in any manner whatever, by one or more persons not resident in Québec;

(a.1)  a corporation that, at any time in the year or during the 24 months preceding the year, would be controlled by a particular person, if each share of the capital stock of the corporation owned by a person not resident in Québec were owned by the particular person;

(b)  a corporation that is exempt from tax for the year under Book VIII;

(c)  a corporation that is controlled, directly or indirectly in any manner whatever, by one or more corporations that are exempt from tax under Book VIII at any time in the year and whose mission is cultural; or

(d)  (paragraph repealed);

"qualified labour expenditure" of a corporation for a taxation year in respect of a property that is a qualified performance means the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure of the corporation for the year in respect of the property,

(2)  any repayment made by the corporation in the year, pursuant to a legal obligation, of any assistance referred to, in relation to the property, in subparagraph ii or in subparagraph d of the second paragraph in respect of a taxation year for which the corporation is a qualified corporation or of any other assistance referred to in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14 in relation to the production of the property not exceeding 300% of the tax under Part III.1.0.4 that the corporation is required to pay in a taxation year preceding the year by reason of that subparagraph i in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure of the corporation or an amount determined under subparagraph 2, exceeds the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the property, for a taxation year preceding the year,exceeds 300% of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a year preceding the year by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance and non-government assistance that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, under subparagraph i of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year, and

(2)  the amount of any benefit or advantage that the corporation has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, to the extent that that amount has not, under subparagraph ii of subparagraph d of the second paragraph, reduced the amount of that labour expenditure of the corporation for that preceding year; and

(b)  the amount by which

i.  45% of the amount by which the production costs directly attributable to the production of the property that are incurred by the corporation before the end of the year in respect of the property until the performance of the property before an audience or within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation, exceeds the aggregate of

(1)  the amount of any government assistance and non-government assistance attributable to those costs, that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year and that it has not repaid at that time pursuant to a legal obligation, and

(2)  the amount of any benefit or advantage attributable to those costs, that the corporation has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, exceeds

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the production of the property for a taxation year preceding the year exceeds 300% of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a taxation year preceding the year in respect of the production of the property;

"qualified performance" of a corporation means a property that is a performance in respect of which the corporation holds, for one of the following periods, a favourable advance ruling given or a certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  the period covering the stage of pre-production of the property through the end of the first full year after the first performance of the property before an audience;

(b)  the period covering the second full year after the first performance of the property before an audience; or

(c)  the period covering the third full year after the first performance of the property before an audience;

"salary or wages" means the income computed pursuant to Chapters I and II of Title II of Book III.

For the purposes of the definition of "labour expenditure" in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of that definition, the salaries or wages directly attributable to the production of a property that is a qualified performance are, where an eligible employee directly undertakes, supervises or supports the production of the property, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the production of the property;

(b)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, except such remuneration paid to a performing artist, or an expenditure as remuneration that is, or may reasonably be considered to be, incurred by a corporation, as a mandatary, on behalf of another person;

(c)  the amount referred to in paragraph a or b of that definition shall be determined by considering, where the salary or wages, or remuneration, as the case may be, relates to the performance of the property before an audience, only the performances that occur in the three years after the first performance of the property before an audience;

(d)  the amount of the labour expenditure of a corporation for a taxation year in respect of a property shall be reduced, where applicable, by the aggregate of

i.  the amount of any government assistance and non-government assistance attributable to each of the amounts described in paragraph a of that definition and in any of subparagraphs i to iv of paragraph b of that definition, where applicable, included in that labour expenditure of the corporation for the year, that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, up to each of those amounts, as the case may be, and

ii.  the amount of any benefit or advantage attributable to each of the amounts described in paragraph a of that definition and in any of subparagraphs i to iv of paragraph b of that definition, where applicable, included in that labour expenditure of the corporation for the year, that the corporation has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property, or in any other form or manner, up to each of those amounts, as the case may be; and

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure for the year in respect of a property is deemed to be nil.

For the purposes of the definitions of "labour expenditure" and "qualified labour expenditure" in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which any of the three periods in respect of which an amount is deemed to have been paid by the corporation under section 1029.8.36.0.0.11 is completed; and

(b)  no expenditure may be taken into consideration in computing a labour expenditure of a corporation for a taxation year in respect of a property that is a qualified performance, or production costs directly attributable to the production of the property incurred before the end of the year, unless the expenditure is paid at the time the corporation first files with the Minister the prescribed form containing the prescribed information provided for in the first paragraph of section 1029.8.36.0.0.11 for that taxation year.

For the purposes of subparagraph i of paragraph b of the definition of "qualified labour expenditure" in the first paragraph, the following rules apply:

(a)  the production costs directly attributable to the production of a property that is a qualified performance are the following amounts, but do not include however the costs incurred for the broadcasting or promotion of the property:

i.  the portion of the production costs, other than the production fees and administration costs, to the extent that they are reasonable in the circumstances and included in the production cost, cost or capital cost, as the case may be, of the property to the corporation, and

ii.  the production fees and administration costs, to the extent that they are reasonable in the circumstances;

(b)  the production costs directly attributable to the production of a property that is a qualified performance include the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the production of the property, which corresponds to the portion of the depreciation of the particular property, for a taxation year, determined in accordance with the generally accepted accounting principles, relating to the use of the particular property by the corporation in the year, as part of the production of the property; and

(c)  the amount of a benefit attributable to production costs includes the portion of the proceeds of disposition by a corporation of a particular property used by it as part of the production of a property that is a qualified performance that relates to the portion of the cost of acquisition of the particular property that has already been included in the production costs of the property as a depreciation up to the amount of the portion of the cost of acquisition of the particular property that has already been so included in the production costs of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of "qualified labour expenditure" in the first paragraph, and of subparagraph i of paragraph b of that definition, an amount of assistance is deemed, in respect of a property that is a qualified performance, to be repaid by a corporation in a taxation year, pursuant to a legal obligation, where that amount

(a)  reduced, for the purpose of computing the amount that the corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.11, in respect of the property,

i.  because of subparagraph d of the second paragraph, a labour expenditure of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of "qualified labour expenditure" in the first paragraph, a qualified labour expenditure of the corporation in respect of the property, or

iii.  because of subparagraph i of paragraph b of the definition of "qualified labour expenditure" in the first paragraph, the production costs of the corporation, in respect of the property, for the year or for a preceding taxation year;

(b)  was not received by the corporation; and

(c)  ceased in the taxation year to be an amount that the corporation may reasonably expect to receive.

For the purposes of paragraph c of the definition of "qualified corporation" in the first paragraph, a corporation whose mission is cultural does not include a corporation whose mandate consists in making investments.

Where the amount deemed to have been paid to the Minister by a corporation on account of its tax payable for a taxation year under section 1029.8.36.0.0.11 is determined in relation to the portion of a qualified labour expenditure referred to in subparagraph a of the first paragraph of that section, the definition of "qualified labour expenditure" in the first paragraph shall be read with "300%", wherever it appears, replaced by "342.85%".

2000, c. 39, s. 147; 2001, c. 51, s. 115; 2002, c. 9, s. 63; 2003, c. 9, s. 208; 2004, c. 21, s. 314; 2005, c. 1, s. 234; 2005, c. 23, s. 159; 2005, c. 38, s. 245; 2006, c. 13, s. 116.

2006-03-01

1029.8.36.0.0.10. In this division,

"eligible employee" of an individual, a corporation or a partnership means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

"eligible individual" means, in respect of a property that is a qualified performance, an individual resident in Québec at any time in the calendar year in which the individual renders services as part of the production of the property;

"labour expenditure" of a corporation for a taxation year in respect of a property that is a qualified performance means, subject to the second paragraph, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances, but does not include any amount relating to the broadcasting or promotion of the property:

(a)  the salaries or wages directly attributable to the production of the property that are incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in relation to the stages of production of the property, from the preproduction stage to the performance before an audience, or in relation to another stage of production of the property carried out after the performance before an audience within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation to its eligible employees; and

(b)  the portion of the remuneration, other than salary or wages, that relates to services rendered to the corporation in relation to the production of the property and that is related to the stages of production of the property provided for in paragraph a, that is incurred by the corporation in the year and, where the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, and that is paid by the corporation

i.  to an eligible individual, to the extent that that portion of the remuneration is reasonably attributable to services personally rendered by the eligible individual as part of the production of the property, to the wages of the eligible individual’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by another eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists (chapter S-32.1) and to whom that portion of the remuneration is paid again by the eligible individual,

ii.  to a particular corporation having an establishment in Québec, other than a corporation referred to in subparagraph iii, to the extent that that portion of the remuneration is reasonably attributable either to the wages of the particular corporation’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the particular corporation,

iii.  to a corporation having an establishment in Québec all the issued capital stock of which, except directors’ qualifying shares, belongs to an eligible individual and the activities of which consist principally in the provision of the eligible individual’s services, to the extent that that portion of the remuneration is reasonably attributable to services rendered by the eligible individual as part of the production of the property, or

iv.  to a partnership carrying on a business in Québec and having an establishment therein, to the extent that that portion of the remuneration is reasonably attributable to services rendered, as part of the production of the property, by an eligible individual who is a member of the partnership, to the wages of the partnership’s eligible employees that relate to services rendered by the eligible employees as part of the production of the property, or to services rendered, as part of the production of the property, by an eligible individual who is an artist subject to the Act respecting the professional status and conditions of engagement of performing, recording and film artists and to whom that portion of the remuneration is paid again by the partnership;

"qualified corporation" for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on therein a performance production business that is a qualified business, but does not include

(a)  a corporation that, at any time in the year or during the 24 months preceding the year, is controlled, directly or indirectly in any manner whatever, by one or more persons not resident in Québec;

(a.1)  a corporation that, at any time in the year or during the 24 months preceding the year, would be controlled by a particular person, if each share of the capital stock of the corporation owned by a person not resident in Québec were owned by the particular person;

(b)  a corporation that is exempt from tax for the year under Book VIII;

(c)  a corporation that is controlled, directly or indirectly in any manner whatever, by one or more corporations that are exempt from tax under Book VIII at any time in the year and whose mission is cultural; or

(d)  (paragraph repealed);

"qualified labour expenditure" of a corporation for a taxation year in respect of a property that is a qualified performance means the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure of the corporation for the year in respect of the property,

(2)  any repayment made by the corporation in the year, pursuant to a legal obligation, of any assistance referred to, in relation to the property, in subparagraph ii or in subparagraph d of the second paragraph in respect of a taxation year for which the corporation is a qualified corporation or of any other assistance referred to in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14 in relation to the production of the property not exceeding 300% of the tax under Part III.1.0.4 that the corporation is required to pay in a taxation year preceding the year by reason of that subparagraph i in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure of the corporation or an amount determined under subparagraph 2, exceeds the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the property, for a taxation year preceding the year,exceeds 300% of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a year preceding the year by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.14, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance and non-government assistance that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, under subparagraph i of subparagraph d of the second paragraph, reduced the labour expenditure of the corporation for that preceding year, and

(2)  the amount of any benefit or advantage that the corporation has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, that is attributable to a labour expenditure of the corporation for a taxation year preceding the year in respect of the property, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, to the extent that that amount has not, under subparagraph ii of subparagraph d of the second paragraph, reduced the amount of that labour expenditure of the corporation for that preceding year; and

(b)  the amount by which

i.  45% of the amount by which the production costs directly attributable to the production of the property that are incurred by the corporation before the end of the year in respect of the property until the performance of the property before an audience or within a period that is reasonable to the Minister but that must not extend beyond the date provided for in subparagraph a of the third paragraph, and that are paid by the corporation, exceeds the aggregate of

(1)  the amount of any government assistance and non-government assistance attributable to those costs, that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year and that it has not repaid at that time pursuant to a legal obligation, and

(2)  the amount of any benefit or advantage attributable to those costs, that the corporation has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, exceeds

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure of the corporation in respect of the production of the property for a taxation year preceding the year exceeds 300% of the aggregate of all amounts each of which is tax that the corporation is required to pay under Part III.1.0.4 for a taxation year preceding the year in respect of the production of the property;

"qualified performance" of a corporation means a property that is a performance in respect of which the corporation holds, for one of the following periods, a favourable advance ruling given or a certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  the period covering the stage of pre-production of the property through the end of the first full year after the first performance of the property before an audience;

(b)  the period covering the second full year after the first performance of the property before an audience; or

(c)  the period covering the third full year after the first performance of the property before an audience;

"salary or wages" means the income computed pursuant to Chapters I and II of Title II of Book III.

For the purposes of the definition of "labour expenditure" in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of that definition, the salaries or wages directly attributable to the production of a property that is a qualified performance are, where an eligible employee directly undertakes, supervises or supports the production of the property, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the production of the property;

(b)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, except such remuneration paid to a performing artist, or an expenditure as remuneration that is, or may reasonably be considered to be, incurred by a corporation, as a mandatary, on behalf of another person;

(c)  the amount referred to in paragraph a or b of that definition shall be determined by considering, where the salary or wages, or remuneration, as the case may be, relates to the performance of the property before an audience, only the performances that occur in the three years after the first performance of the property before an audience;

(d)  the amount of the labour expenditure of a corporation for a taxation year in respect of a property shall be reduced, where applicable, by the aggregate of

i.  the amount of any government assistance and non-government assistance attributable to that expenditure, that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, and

ii.  the amount of any benefit or advantage attributable to that expenditure, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of a property which exceed the fair market value of the property or in any other form or manner, that the corporation has obtained, is entitled to obtain or may reasonably expect to obtain on or before the corporation’s filing-due date for the year; and

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure for the year in respect of a property is deemed to be nil.

For the purposes of the definitions of "labour expenditure" and "qualified labour expenditure" in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which any of the three periods in respect of which an amount is deemed to have been paid by the corporation under section 1029.8.36.0.0.11 is completed; and

(b)  no expenditure may be taken into consideration in computing a labour expenditure of a corporation for a taxation year in respect of a property that is a qualified performance, or production costs directly attributable to the production of the property incurred before the end of the year, unless the expenditure is paid at the time the corporation first files with the Minister the prescribed form containing the prescribed information provided for in the first paragraph of section 1029.8.36.0.0.11 for that taxation year.

For the purposes of subparagraph i of paragraph b of the definition of "qualified labour expenditure" in the first paragraph, the following rules apply:

(a)  the production costs directly attributable to the production of a property that is a qualified performance are the following amounts, but do not include however the costs incurred for the broadcasting or promotion of the property:

i.  the portion of the production costs, other than the production fees and administration costs, to the extent that they are reasonable in the circumstances and included in the production cost, cost or capital cost, as the case may be, of the property to the corporation, and

ii.  the production fees and administration costs, to the extent that they are reasonable in the circumstances;

(b)  the production costs directly attributable to the production of a property that is a qualified performance include the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the production of the property, which corresponds to the portion of the depreciation of the particular property, for a taxation year, determined in accordance with the generally accepted accounting principles, relating to the use of the particular property by the corporation in the year, as part of the production of the property; and

(c)  the amount of a benefit attributable to production costs includes the portion of the proceeds of disposition by a corporation of a particular property used by it as part of the production of a property that is a qualified performance that relates to the portion of the cost of acquisition of the particular property that has already been included in the production costs of the property as a depreciation up to the amount of the portion of the cost of acquisition of the particular property that has already been so included in the production costs of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of "qualified labour expenditure" in the first paragraph, and of subparagraph i of paragraph b of that definition, an amount of assistance is deemed, in respect of a property that is a qualified performance, to be repaid by a corporation in a taxation year, pursuant to a legal obligation, where that amount

(a)  reduced, for the purpose of computing the amount that the corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.11, in respect of the property,

i.  because of subparagraph d of the second paragraph, a labour expenditure of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of "qualified labour expenditure" in the first paragraph, a qualified labour expenditure of the corporation in respect of the property, or

iii.  because of subparagraph i of paragraph b of the definition of "qualified labour expenditure" in the first paragraph, the production costs of the corporation, in respect of the property, for the year or for a preceding taxation year;

(b)  was not received by the corporation; and

(c)  ceased in the taxation year to be an amount that the corporation may reasonably expect to receive.

For the purposes of paragraph c of the definition of "qualified corporation" in the first paragraph, a corporation whose mission is cultural does not include a corporation whose mandate consists in making investments.

Where the amount deemed to have been paid to the Minister by a corporation on account of its tax payable for a taxation year under section 1029.8.36.0.0.11 is determined in relation to the portion of a qualified labour expenditure referred to in subparagraph a of the first paragraph of that section, the definition of "qualified labour expenditure" in the first paragraph shall be read with "300%", wherever it appears, replaced by "342.85%".

2000, c. 39, s. 147; 2001, c. 51, s. 115; 2002, c. 9, s. 63; 2003, c. 9, s. 208; 2004, c. 21, s. 314; 2005, c. 1, s. 234; 2005, c. 23, s. 159; 2005, c. 38, s. 245.