I-3 - Taxation Act

Section 1029.8.36.0.3.69 Disposition versions

2021-06-04

1029.8.36.0.3.69. (Repealed).

2003, c. 9, s. 219; 2004, c. 21, s. 337; 2005, c. 23, s. 166; 2009, c. 5, s. 443; 2021, c. 18, s. 119.

2009-05-15

1029.8.36.0.3.69. Subject to sections 1029.8.36.0.3.67 and 1029.8.36.0.3.68, if, at a particular time in a particular calendar year that ends in a particular taxation year or in a preceding taxation year, the activities carried on by a person or partnership (in this section referred to as the “vendor”) in relation to a recognized business or a business the activities of which are described in any of paragraphs a to c of the definition of “recognized business” in the first paragraph of section 1029.8.36.0.3.60, diminish or cease and it may reasonably be considered that, as a result, another person or partnership (in this section referred to as the “purchaser”) that is not associated with the vendor at the particular time, begins, after the particular time, to carry on similar activities in the course of carrying on such a business, or increases, after the particular time, the scope of similar activities carried on in the course of carrying on such a business, the following rules apply, subject to the third and fourth paragraphs, for the purpose of determining the amount that a corporation is deemed to have paid to the Minister under this division for the particular taxation year, in relation to a particular recognized business:

(a)  if the particular recognized business is a business of the vendor,

i.   the aggregate of all amounts each of which is the salary or wages paid by the vendor to an employee in respect of a pay period, within the vendor’s base period, in relation to the particular recognized business, for which the employee is an eligible employee, is deemed to be equal to the amount by which that amount otherwise determined exceeds the amount determined by the formula

A × D × E, and

ii.  the base amount of the vendor, in relation to the particular recognized business, is deemed to be equal to the amount by which that amount otherwise determined, without reference to subparagraph i, exceeds the amount determined by the formula

B × D × E;

(b)  if the particular recognized business is a business of a corporation that is associated with the vendor at the end of the particular calendar year, the amount that is the aggregate referred to in subparagraph 2 of subparagraph ii of subparagraph a of the first paragraph of section 1029.8.36.0.3.62 or in subparagraph ii of paragraph c of section 1029.8.36.0.3.63, determined in respect of the vendor, is deemed to be equal to the amount by which that amount, determined without reference to this subparagraph, exceeds the amount determined by the formula

C × D × E;

(c)  if the particular recognized business is a business of the purchaser, the purchaser is deemed

i.  to have paid in respect of the purchaser’s base period, in relation to the particular recognized business, to employees referred to in subparagraph 2 of subparagraph i of subparagraph a of the first paragraph of section 1029.8.36.0.3.61, in subparagraph 2 of subparagraph i of subparagraph a of the first paragraph of section 1029.8.36.0.3.62 or in subparagraph ii of paragraph a of section 1029.8.36.0.3.63, the amount that is the proportion of the aggregate, in subparagraph ii referred to as the “particular aggregate”, of all amounts each of which is the salary or wages paid by the purchaser to an employee in respect of a pay period within the particular calendar year for which the employee is an eligible employee, in relation to the particular recognized business, to the extent that the salary or wages may reasonably be considered to relate to the carrying on by the employee of the part of the activities that began or increased at the particular time, that 365 is of the number of days in the particular calendar year during which the purchaser carried on those activities,

ii.  to have paid to employees in respect of a pay period within the particular calendar year for which the employees are eligible employees, in relation to the particular recognized business, the amount by which the amount determined pursuant to subparagraph i, in relation to the particular recognized business, exceeds the amount of the particular aggregate determined in relation to the particular recognized business,

iii.  to have a base amount, in relation to the particular recognized business, equal to the aggregate of

(1)  the purchaser’s base amount, otherwise determined without reference to subparagraph i, in relation to the particular recognized business, and

(2)  the amount that is the proportion of the aggregate, in subparagraph 2 of subparagraph iv referred to as the “particular aggregate”, of all amounts each of which is the salary or wages paid by the purchaser to an employee, after the particular time, in respect of a pay period, within the particular calendar year, for which the employee is an eligible employee, or the salary or wages of an employee who reports for work at an establishment of the purchaser situated in Québec but outside a designated site, other than an excluded employee of the purchaser, that the purchaser paid, after the particular time, in respect of a pay period, within the particular calendar year, throughout which the employee spends, when at work, at least 90% of the time in undertaking, supervising or supporting, in the course of the business in an establishment of the purchaser situated in Québec or elsewhere, but in connection with the mandates attributable to such an establishment, work that is directly related to activities of the purchaser that are described in any of paragraphs a to c of the definition of “recognized business” in the first paragraph of section 1029.8.36.0.3.60, to the extent that the salary or wages may reasonably be considered to relate to the carrying on by the employee of the part of the activities that began or increased at the particular time, that 365 is of the number of days in the particular calendar year during which the purchaser carried on those activities, except if an amount is included, in respect of the employee, in relation to the purchaser, in computing an amount determined under this subparagraph 2, in relation to another recognized business, and

iv.  to have an eligible amount for the particular calendar year, in relation to the particular recognized business, equal to the aggregate of

(1)  the purchaser’s eligible amount for the particular calendar year otherwise determined without reference to subparagraph ii, in relation to the particular recognized business, and

(2)  the amount by which the amount determined pursuant to subparagraph 2 of subparagraph iii, in relation to the particular recognized business, exceeds the amount of the particular aggregate, in relation to the particular recognized business; and

(d)  if the particular recognized business is a business of a corporation that is associated with the purchaser at the end of the particular calendar year, the purchaser is deemed to have paid

i.  in respect of the base period, in relation to the particular recognized business, the amount that is the proportion of the aggregate, in subparagraph ii referred to as the “particular aggregate”, of all amounts each of which is the salary or wages of an employee who reports for work at an establishment of the purchaser situated in Québec, other than an excluded employee of the purchaser, that the purchaser paid, after the particular time, in respect of a pay period of the particular calendar year during which the employee spends, when at work, at least 90% of the time in undertaking, supervising or supporting, in the course of the business in an establishment of the purchaser situated in Québec or elsewhere, but in connection with the mandates attributable to such an establishment, work that is directly related to activities of the purchaser that are described in any of paragraphs a to c of the definition of “recognized business” in the first paragraph of section 1029.8.36.0.3.60, to the extent that the salary or wages may reasonably be considered to relate to the carrying on by the employee of the part of the activities that began or increased at the particular time that 365 is of the number of days in the particular calendar year during which the purchaser carried on those activities, except if an amount is included, in respect of the employee, in relation to the purchaser, in computing an amount determined under this subparagraph, in relation to another recognized business, and

ii.  in respect of the particular calendar year, the amount by which the amount determined pursuant to subparagraph i, in relation to the particular recognized business, exceeds the amount of the particular aggregate, in relation to the particular recognized business.

In the formulas provided for in subparagraphs a and b of the first paragraph,

(a)  A is the aggregate of all amounts each of which is the salary or wages paid by the vendor to an employee in respect of a pay period, within the vendor’s base period, in relation to the particular recognized business, for which the employee is an eligible employee;

(b)  B is the aggregate of all amounts each of which is

i.  the salary or wages paid by the vendor to an employee in the course of carrying on the particular recognized business, in respect of a pay period, within the vendor’s base period, in relation to the particular recognized business, for which the employee is an eligible employee, or

ii.  the salary or wages of an employee who reports for work at an establishment of the vendor situated in Québec but outside a designated site, other than an excluded employee of the vendor, that the vendor paid in the course of carrying on any business in respect of a pay period, within the vendor’s base period, in relation to the particular recognized business, throughout which the employee spends, when at work, at least 90% of the time in undertaking, supervising or supporting, in an establishment of the vendor situated in Québec or elsewhere, but in connection with the mandates attributable to such an establishment, work that is directly related to activities of the vendor that are described in any of paragraphs a to c of the definition of “recognized business” in the first paragraph of section 1029.8.36.0.3.60;

(c)  C is the aggregate of all amounts each of which is the salary or wages of an employee who reports for work at an establishment of the vendor situated in Québec, other than an excluded employee of the vendor, that the vendor paid in respect of a pay period, within the vendor’s base period, in relation to the particular recognized business, throughout which the employee spends, when at work, at least 90% of the time in undertaking, supervising or supporting, in an establishment of the vendor situated in Québec or elsewhere, but in connection with the mandates attributable to such an establishment, work that is directly related to activities of the vendor that are described in any of paragraphs a to c of the definition of “recognized business” in the first paragraph of section 1029.8.36.0.3.60, except if an amount is included, in respect of the employee, in relation to the vendor, in computing an amount determined under this subparagraph, in relation to another recognized business;

(d)  D is the proportion that the number of the vendor’s employees referred to in any of subparagraphs a to c, as the case may be, who were assigned to the carrying on of part of the activities that diminished or ceased at the particular time is of the number of the vendor’s employees assigned to those activities immediately before the particular time; and

(e)  E is, where this section applies for the purpose of determining the amount that a corporation is deemed to have paid to the Minister under this division in respect of the particular calendar year, the proportion that the number of days in the particular calendar year following the particular time is of 365, and, in any other case, 1.

Where a particular corporation is, at any time in a calendar year, a purchaser in relation to activities carried on by a person or partnership and, at a subsequent time in the same calendar year, the particular corporation is a vendor in relation to all of those activities, this section does not apply to the particular corporation either as vendor or as purchaser in respect of the activities and, for the purpose of determining the amount that a corporation is deemed to have paid to the Minister under this division, the particular corporation is deemed to have paid, from that time to the subsequent time, no portion of the salaries or wages that may reasonably be considered to relate to the employees of the corporation assigned to the carrying on of the activities that ceased after the subsequent time.

Where a particular corporation is, at a particular time in a calendar year, a purchaser in relation to activities carried on by a person or partnership and, at a subsequent time in the same calendar year, the particular corporation is a vendor in relation to part of those activities, for the purpose of determining the amount that a corporation is deemed to have paid to the Minister under this division, the particular corporation is deemed not to have paid to its employees the portion of the salaries or wages that may reasonably be considered to have been paid to the employees of the corporation assigned to the part of the activities that the particular corporation ceases to carry on after the subsequent time.

2003, c. 9, s. 219; 2004, c. 21, s. 337; 2005, c. 23, s. 166; 2009, c. 5, s. 443.

2006-03-01

1029.8.36.0.3.69. Subject to sections 1029.8.36.0.3.67 and 1029.8.36.0.3.68, where, at a particular time in a particular calendar year, the activities carried on by a person or partnership, in this section referred to as the “vendor”, in relation to a recognized business or a business the activities of which are described in any of paragraphs a to c of the definition of “recognized business” in the first paragraph of section 1029.8.36.0.3.60, diminish or cease and it may reasonably be considered that, as a result, another person or partnership, in this section referred to as the “purchaser”, begins, after the particular time, to carry on similar activities in the course of carrying on such a business, or increases, after the particular time, the scope of similar activities carried on in the course of carrying on such a business, the following rules apply, subject to the third and fourth paragraphs, for the purpose of determining the amount that a corporation is deemed to have paid to the Minister under this division, in relation to a particular recognized business, for the taxation year in which the particular calendar year ends and for the taxation year in which a subsequent calendar year ends:

(a)  if the particular recognized business is a business of the vendor,

i.   the aggregate of all amounts each of which is the salary or wages paid by the vendor to an employee in respect of a pay period, within the vendor’s base period, in relation to the particular recognized business, for which the employee is an eligible employee, is deemed to be equal to the amount by which that amount otherwise determined exceeds the amount determined by the formula

A × D × E, and

ii.  the base amount of the vendor, in relation to the particular recognized business, is deemed to be equal to the amount by which that amount otherwise determined, without reference to subparagraph i, exceeds the amount determined by the formula

B × D × E;

(b)  if the particular recognized business is a business of a corporation that is associated with the vendor at the end of the particular calendar year, the amount that is the aggregate referred to in subparagraph 2 of subparagraph ii of subparagraph a of the first paragraph of section 1029.8.36.0.3.62 or in subparagraph ii of paragraph c of section 1029.8.36.0.3.63, determined in respect of the vendor, is deemed to be equal to the amount by which that amount, determined without reference to this subparagraph, exceeds the amount determined by the formula

C × D × E;

(c)  if the particular recognized business is a business of the purchaser, the purchaser is deemed

i.  to have paid in respect of the purchaser’s base period, in relation to the particular recognized business, to employees referred to in subparagraph 2 of subparagraph i of subparagraph a of the first paragraph of section 1029.8.36.0.3.61, in subparagraph 2 of subparagraph i of subparagraph a of the first paragraph of section 1029.8.36.0.3.62 or in subparagraph ii of paragraph a of section 1029.8.36.0.3.63, the amount that is the proportion of the aggregate, in subparagraph ii referred to as the “particular aggregate”, of all amounts each of which is the salary or wages paid by the purchaser to an employee in respect of a pay period within the particular calendar year for which the employee is an eligible employee, in relation to the particular recognized business, to the extent that the salary or wages may reasonably be considered to relate to the carrying on by the employee of the part of the activities that began or increased at the particular time, that 365 is of the number of days in the particular calendar year during which the purchaser carried on those activities,

ii.  to have paid to employees in respect of a pay period within the particular calendar year for which the employees are eligible employees, in relation to the particular recognized business, the amount by which the amount determined pursuant to subparagraph i, in relation to the particular recognized business, exceeds the amount of the particular aggregate determined in relation to the particular recognized business,

iii.  to have a base amount, in relation to the particular recognized business, equal to the aggregate of

(1)  the purchaser’s base amount, otherwise determined without reference to subparagraph i, in relation to the particular recognized business, and

(2)  the amount that is the proportion of the aggregate, in subparagraph 2 of subparagraph iv referred to as the “particular aggregate”, of all amounts each of which is the salary or wages paid by the purchaser to an employee, after the particular time, in respect of a pay period, within the particular calendar year, for which the employee is an eligible employee, or the salary or wages of an employee who reports for work at an establishment of the purchaser situated in Québec but outside a designated site, other than an excluded employee of the purchaser, that the purchaser paid, after the particular time, in respect of a pay period, within the particular calendar year, throughout which the employee spends, when at work, at least 90% of the time in undertaking, supervising or supporting, in the course of the business in an establishment of the purchaser situated in Québec or elsewhere, but in connection with the mandates attributable to such an establishment, work that is directly related to activities of the purchaser that are described in any of paragraphs a to c of the definition of “recognized business” in the first paragraph of section 1029.8.36.0.3.60, to the extent that the salary or wages may reasonably be considered to relate to the carrying on by the employee of the part of the activities that began or increased at the particular time, that 365 is of the number of days in the particular calendar year during which the purchaser carried on those activities, except if an amount is included, in respect of the employee, in relation to the purchaser, in computing an amount determined under this subparagraph 2, in relation to another recognized business, and

iv.  to have an eligible amount for the particular calendar year, in relation to the particular recognized business, equal to the aggregate of

(1)  the purchaser’s eligible amount for the particular calendar year otherwise determined without reference to subparagraph ii, in relation to the particular recognized business, and

(2)  the amount by which the amount determined pursuant to subparagraph 2 of subparagraph iii, in relation to the particular recognized business, exceeds the amount of the particular aggregate, in relation to the particular recognized business; and

(d)  if the particular recognized business is a business of a corporation that is associated with the purchaser at the end of the particular calendar year, the purchaser is deemed to have paid

i.  in respect of the base period, in relation to the particular recognized business, the amount that is the proportion of the aggregate, in subparagraph ii referred to as the “particular aggregate”, of all amounts each of which is the salary or wages of an employee who reports for work at an establishment of the purchaser situated in Québec, other than an excluded employee of the purchaser, that the purchaser paid, after the particular time, in respect of a pay period of the particular calendar year during which the employee spends, when at work, at least 90% of the time in undertaking, supervising or supporting, in the course of the business in an establishment of the purchaser situated in Québec or elsewhere, but in connection with the mandates attributable to such an establishment, work that is directly related to activities of the purchaser that are described in any of paragraphs a to c of the definition of “recognized business” in the first paragraph of section 1029.8.36.0.3.60, to the extent that the salary or wages may reasonably be considered to relate to the carrying on by the employee of the part of the activities that began or increased at the particular time that 365 is of the number of days in the particular calendar year during which the purchaser carried on those activities, except if an amount is included, in respect of the employee, in relation to the purchaser, in computing an amount determined under this subparagraph, in relation to another recognized business, and

ii.  in respect of the particular calendar year, the amount by which the amount determined pursuant to subparagraph i, in relation to the particular recognized business, exceeds the amount of the particular aggregate, in relation to the particular recognized business.

In the formulas provided for in subparagraphs a and b of the first paragraph,

(a)  A is the aggregate of all amounts each of which is the salary or wages paid by the vendor to an employee in respect of a pay period, within the vendor’s base period, in relation to the particular recognized business, for which the employee is an eligible employee;

(b)  B is the aggregate of all amounts each of which is

i.  the salary or wages paid by the vendor to an employee in the course of carrying on the particular recognized business, in respect of a pay period, within the vendor’s base period, in relation to the particular recognized business, for which the employee is an eligible employee, or

ii.  the salary or wages of an employee who reports for work at an establishment of the vendor situated in Québec but outside a designated site, other than an excluded employee of the vendor, that the vendor paid in the course of carrying on any business in respect of a pay period, within the vendor’s base period, in relation to the particular recognized business, throughout which the employee spends, when at work, at least 90% of the time in undertaking, supervising or supporting, in an establishment of the vendor situated in Québec or elsewhere, but in connection with the mandates attributable to such an establishment, work that is directly related to activities of the vendor that are described in any of paragraphs a to c of the definition of “recognized business” in the first paragraph of section 1029.8.36.0.3.60;

(c)  C is the aggregate of all amounts each of which is the salary or wages of an employee who reports for work at an establishment of the vendor situated in Québec, other than an excluded employee of the vendor, that the vendor paid in respect of a pay period, within the vendor’s base period, in relation to the particular recognized business, throughout which the employee spends, when at work, at least 90% of the time in undertaking, supervising or supporting, in an establishment of the vendor situated in Québec or elsewhere, but in connection with the mandates attributable to such an establishment, work that is directly related to activities of the vendor that are described in any of paragraphs a to c of the definition of “recognized business” in the first paragraph of section 1029.8.36.0.3.60, except if an amount is included, in respect of the employee, in relation to the vendor, in computing an amount determined under this subparagraph, in relation to another recognized business;

(d)  D is the proportion that the number of the vendor’s employees referred to in any of subparagraphs a to c, as the case may be, who were assigned to the carrying on of part of the activities that diminished or ceased at the particular time is of the number of the vendor’s employees assigned to those activities immediately before the particular time; and

(e)  E is, where this section applies for the purpose of determining the amount that a corporation is deemed to have paid to the Minister under this division in respect of the particular calendar year, the proportion that the number of days in the particular calendar year following the particular time is of 365, and, in any other case, 1.

Where a particular corporation is, at any time in a calendar year, a purchaser in relation to activities carried on by a person or partnership and, at a subsequent time in the same calendar year, the particular corporation is a vendor in relation to all of those activities, this section does not apply to the particular corporation either as vendor or as purchaser in respect of the activities and, for the purpose of determining the amount that a corporation is deemed to have paid to the Minister under this division, the particular corporation is deemed to have paid, from that time to the subsequent time, no portion of the salaries or wages that may reasonably be considered to relate to the employees of the corporation assigned to the carrying on of the activities that ceased after the subsequent time.

Where a particular corporation is, at a particular time in a calendar year, a purchaser in relation to activities carried on by a person or partnership and, at a subsequent time in the same calendar year, the particular corporation is a vendor in relation to part of those activities, for the purpose of determining the amount that a corporation is deemed to have paid to the Minister under this division, the particular corporation is deemed not to have paid to its employees the portion of the salaries or wages that may reasonably be considered to have been paid to the employees of the corporation assigned to the part of the activities that the particular corporation ceases to carry on after the subsequent time.

2003, c. 9, s. 219; 2004, c. 21, s. 337; 2005, c. 23, s. 166.