I-3 - Taxation Act

Section 1029.8.36.0.3.109 Disposition versions

2021-12-10

1029.8.36.0.3.109. In this division,

“eligible employee” of a corporation or a partnership for all or part of a taxation year or fiscal period, as the case may be, means, subject to the fourth paragraph, an individual in respect of whom the following conditions are met:

(a)  in all or part of the year or fiscal period, the individual is an employee of the corporation or partnership (other than an excluded employee) who reports for work at an establishment of the corporation or partnership situated either in Québec or, where the condition in the fifth paragraph is met, elsewhere in Canada; and

(b)  a certificate has been issued, for the purposes of this division, to the corporation or partnership, for the year or fiscal period, according to which the individual is recognized as an eligible employee of the corporation or partnership for all or part of the year or fiscal period;

“eligible media” of a corporation or a partnership, for a taxation year or a fiscal period, as the case may be, means a media whose name is specified in a certificate that has been issued, for the purposes of this division, to the corporation or partnership for the year or fiscal period;

“excluded corporation” for a taxation year means

(a)  a corporation that is exempt from tax for the year under Book VIII, other than a corporation exempt from tax under section 985.26.3;

(b)  a corporation that would be exempt from tax for the year under section 985, but for section 192; or

(c)  a corporation that, in the year, holds a licence to carry on a broadcasting undertaking;

“excluded employee” in all or part of a taxation year of a corporation, or of a fiscal period of a partnership, means, subject to the fourth paragraph,

(a)  where the employer is a corporation, an employee who, in the year, is a specified shareholder of the corporation or, if the corporation is a cooperative, a specified member of the cooperative; or

(b)  where the employer is a partnership, either an employee who, in the taxation year of a member of the partnership in which the fiscal period ends, is a specified shareholder of the member or, if the latter is a cooperative, a specified member of the cooperative, or an employee who, at any time in the fiscal period, does not deal at arm’s length with a member of the partnership;

“excluded subsidiary” for a particular taxation year of a particular corporation or a particular fiscal period of a particular partnership means

(a)  a corporation that is exempt from tax under Book VIII for a taxation year that includes all or part of the particular taxation year or particular fiscal period, as the case may be;

(b)  a corporation that, in the particular taxation year or particular fiscal period, as the case may be, holds a licence to carry on a broadcasting undertaking; or

(c)  a corporation that, in the particular taxation year or particular fiscal period, as the case may be, provides services or sells property to persons or partnerships other than the particular corporation or particular partnership;

“information technology activity” has the meaning assigned by section 19.11 of Schedule A to the Act respecting the sectoral parameters of certain fiscal measures (chapter P-5.1);

“licence to carry on a broadcasting undertaking” means a licence within the meaning of subsection 1 of section 2 of the Broadcasting Act (S.C. 1991, c. 11);

“original information content” has the meaning assigned by section 19.6 of Schedule A to the Act respecting the sectoral parameters of certain fiscal measures;

“qualified corporation” for a taxation year means a corporation (other than an excluded corporation) that, in the year,

(a)  carries on a business in Québec and has an establishment in Québec; and

(b)  produces and disseminates one or more eligible media;

“qualified expenditure” of a corporation or a partnership for a taxation year or a fiscal period, as the case may be, that includes all or part of the transitional period means the portion of the consideration, paid by the corporation or partnership to its wholly-owned subsidiary for work carried out on its behalf during that period or part of the period in relation to recognized activities, that may reasonably be attributed to the wages the subsidiary incurred and paid in respect of its eligible employees;

“qualified partnership” for a fiscal period means a partnership that, in the fiscal period,

(a)  carries on a business in Québec and has an establishment in Québec;

(b)  produces and disseminates one or more eligible media; and

(c)  does not hold a licence to carry on a broadcasting undertaking;

“qualified wages” incurred by a corporation in a taxation year, or by a partnership in a fiscal period, in respect of an eligible employee of the corporation or partnership, means the lesser of

(a)  the amount obtained by multiplying $75,000 by the proportion that the number of days in the taxation year or fiscal period that follow 31 December 2018 and during which the individual is recognized as an eligible employee of the corporation or partnership, as the case may be, is of 365; and

(b)  the amount by which the amount of the wages incurred by the corporation or partnership in respect of the individual, after 31 December 2018 and in the part of the taxation year or fiscal period during which the individual is recognized as an eligible employee of the corporation or partnership, to the extent that that amount is paid, exceeds the aggregate of all amounts each of which is an amount of government assistance or non-government assistance attributable to such wages that the corporation or partnership has received, is entitled to receive or may reasonably expect to receive on or before, in the case of the corporation, the corporation’s filing-due date for the taxation year or, in the case of the partnership, the last day of the six-month period following the end of the fiscal period;

“recognized activity” means an information technology activity that is related to the production or dissemination of original information content intended for publication in an eligible media;

“specified member” of a corporation that is a cooperative in a taxation year means either a member of the cooperative that has, directly or indirectly, at any time in the year, at least 10% of the votes that could be cast at a meeting of the members of the cooperative or a person that does not deal at arm’s length with such a member;

“transitional period” means the calendar year 2019;

“wages” means the income computed under Chapters I and II of Title II of Book III;

“wholly-owned subsidiary” of a corporation or a partnership, for a taxation year of the corporation or a fiscal period of the partnership, means another corporation (other than an excluded subsidiary for that year or fiscal period) all of whose issued shares of each class of shares of its capital stock are owned by the corporation or partnership throughout that year or fiscal period.

In computing, for the purposes of the definition of “qualified expenditure” of a corporation or partnership for a taxation year or fiscal period of the corporation or partnership, the portion of the consideration referred to in that definition that is paid by the corporation or partnership to its wholly-owned subsidiary, the following rules apply:

(a)  the wages of an eligible employee of the wholly-owned subsidiary that are taken into account in that computation may not exceed the amount obtained by multiplying $75,000 by the proportion that the number of days in the taxation year or fiscal period that follow 31 December 2018 but precede 1 January 2020, and during which the individual is recognized as an eligible employee of the wholly-owned subsidiary is of 365; and

(b)  the portion of the consideration is to be reduced by the aggregate of all amounts each of which is an amount of government assistance or non-government assistance that is attributable to the portion of the wages, incurred and paid by the wholly-owned subsidiary in respect of its eligible employees, which is taken into account in computing that portion of the consideration and that the corporation or partnership has received, is entitled to receive or may reasonably expect to receive on or before, in the case of the corporation, the corporation’s filing-due date for the year or, in the case of the partnership, the last day of the six-month period following the end of the fiscal period.

For the purposes of subparagraph b of the second paragraph, an amount of government assistance or non-government assistance that is, at a particular time, received or receivable by the wholly-owned subsidiary of a corporation or partnership and that is attributable to the wages of its eligible employees is deemed to be received at that time by the corporation or partnership, as the case may be.

In determining, for the purposes of this division, whether an individual is an eligible employee of a corporation that is a wholly-owned subsidiary of another corporation or of a partnership for, as the case may be, a taxation year or a fiscal period of the corporation or partnership that includes all or part of the transitional period, the following rules apply:

(a)  the definition of “eligible employee” in the first paragraph is to be read

i.  as if “of a corporation or a partnership for all or part of a taxation year or fiscal period, as the case may be,” in the portion before paragraph a were replaced by “of a wholly-owned subsidiary of a corporation or partnership for all or part of a taxation year or fiscal period, as the case may be, of the corporation or partnership” and without reference to “, subject to the fourth paragraph,”,

ii.  as if “employee of the corporation or partnership” and “of the corporation or partnership situated either in Québec or, where the condition in the fifth paragraph is met, elsewhere in Canada” in paragraph a were replaced by “employee of the wholly-owned subsidiary” and “of the wholly-owned subsidiary situated in Québec”, respectively, and

iii.  as if “of the corporation or partnership” in paragraph b were replaced by “of the wholly-owned subsidiary”; and

(b)  the definition of “excluded employee” in the first paragraph is to be read

i.  without reference to “, subject to the fourth paragraph,” in the portion before paragraph a,

ii.  as if “where the employer is a corporation” in paragraph a were replaced by “where the employer is a wholly-owned subsidiary of the corporation”, and

iii.  as if “where the employer is a partnership” in paragraph b were replaced by “where the employer is a wholly-owned subsidiary of the partnership”.

An individual who reports for work at an establishment of a qualified corporation or qualified partnership situated in Canada outside Québec is an eligible employee of the corporation or partnership only if all of the corporation’s or partnership’s eligible employees who report for work at one of the corporation’s or partnership’s establishments situated in Québec represent at least 75% of all the individuals who are or would be, but for this paragraph, the corporation’s or partnership’s eligible employees.

For the purposes of the definition of “eligible employee” in the first paragraph, the following rules are taken into account:

(a)  where, during all or part of a taxation year or fiscal period, an employee reports for work at an establishment of a corporation or partnership situated in Québec and at an establishment of the corporation or partnership situated outside Québec, the employee is deemed, for that period,

i.  unless subparagraph ii applies, to report for work only at the establishment situated in Québec, or

ii.  to report for work only at the establishment situated outside Québec if, during that period, the employee reports for work mainly at an establishment of the corporation or partnership situated outside Québec; and

(b)  where, during all or part of a taxation year or fiscal period, an employee is not required to report for work at an establishment of a corporation or partnership and the employee’s wages in relation to that period are paid from such an establishment situated in Québec, the employee is deemed to report for work at that establishment if the duties performed by the employee during that period are performed mainly in Québec.

To determine whether, during all or part of a taxation year or fiscal period, an employee reports for work at an establishment of a corporation or partnership situated in Canada outside Québec, the sixth paragraph applies, subject to the following rules:

(a)  where, during that period, the employee reports for work at an establishment of the corporation or partnership situated in Canada outside Québec and at an establishment of the corporation or partnership situated outside Canada, subparagraph a of the sixth paragraph is to be read as if all occurrences of “in Québec” and “outside Québec” were replaced by “in Canada outside Québec” and “outside Canada”, respectively; and

(b)  where, during that period, the employee is not required to report for work at an establishment of the corporation or partnership and the employee’s wages in relation to that period are paid from such an establishment situated in Canada outside Québec, subparagraph b of the sixth paragraph is to be read as if “situated in Québec” and “mainly in Québec” were replaced by “situated in Canada outside Québec” and “mainly in the province where it is situated”, respectively.

2021, c. 14, s. 140; 2021, c. 36, s. 116.

2021-06-02

1029.8.36.0.3.109. In this division,

“broadcasting undertaking” has the meaning assigned by subsection 1 of section 2 of the Broadcasting Act (S.C. 1991, c. 11);

“eligible employee” of a corporation or a partnership for all or part of a taxation year or fiscal period, as the case may be, means, subject to the fourth paragraph, an individual in respect of whom the following conditions are met:

(a)  in all or part of the year or fiscal period, the individual is an employee of the corporation or partnership (other than an excluded employee) who reports for work at an establishment of the corporation or partnership situated either in Québec or, where the condition in the fifth paragraph is met, elsewhere in Canada; and

(b)  a certificate has been issued, for the purposes of this division, to the corporation or partnership, for the year or fiscal period, according to which the individual is recognized as an eligible employee of the corporation or partnership for all or part of the year or fiscal period;

“eligible media” of a corporation or a partnership, for a taxation year or a fiscal period, as the case may be, means a media whose name is specified in a certificate that has been issued, for the purposes of this division, to the corporation or partnership for the year or fiscal period;

“excluded corporation” for a taxation year means

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

(b)  a corporation that would be exempt from tax for the year under section 985, but for section 192; or

(c)  a corporation that, in the year, carries on a broadcasting undertaking;

“excluded employee” in all or part of a taxation year of a corporation, or of a fiscal period of a partnership, means, subject to the fourth paragraph,

(a)  where the employer is a corporation, an employee who, in the year, is a specified shareholder of the corporation or, if the corporation is a cooperative, a specified member of the cooperative; or

(b)  where the employer is a partnership, either an employee who, in the taxation year of a member of the partnership in which the fiscal period ends, is a specified shareholder of the member or, if the latter is a cooperative, a specified member of the cooperative, or an employee who, at any time in the fiscal period, does not deal at arm’s length with a member of the partnership;

“excluded subsidiary” for a particular taxation year of a particular corporation or a particular fiscal period of a particular partnership means

(a)  a corporation that is exempt from tax under Book VIII for a taxation year that includes all or part of the particular taxation year or particular fiscal period, as the case may be;

(b)  a corporation that, in the particular taxation year or particular fiscal period, as the case may be, carries on a broadcasting undertaking; or

(c)  a corporation that, in the particular taxation year or particular fiscal period, as the case may be, provides services or sells property to persons or partnerships other than the particular corporation or particular partnership;

“information technology activity” has the meaning assigned by section 19.11 of Schedule A to the Act respecting the sectoral parameters of certain fiscal measures (chapter P-5.1);

“original information content” has the meaning assigned by section 19.6 of Schedule A to the Act respecting the sectoral parameters of certain fiscal measures;

“qualified corporation” for a taxation year means a corporation (other than an excluded corporation) that, in the year,

(a)  carries on a business in Québec and has an establishment in Québec; and

(b)  produces and disseminates one or more eligible media;

“qualified expenditure” of a corporation or a partnership for a taxation year or a fiscal period, as the case may be, that includes all or part of the transitional period means the portion of the consideration, paid by the corporation or partnership to its wholly-owned subsidiary for work carried out on its behalf during that period or part of the period in relation to recognized activities, that may reasonably be attributed to the wages the subsidiary incurred and paid in respect of its eligible employees;

“qualified partnership” for a fiscal period means a partnership that, in the fiscal period,

(a)  carries on a business in Québec and has an establishment in Québec;

(b)  produces and disseminates one or more eligible media; and

(c)  does not carry on a broadcasting undertaking;

“qualified wages” incurred by a corporation in a taxation year, or by a partnership in a fiscal period, in respect of an eligible employee of the corporation or partnership, means the lesser of

(a)  the amount obtained by multiplying $75,000 by the proportion that the number of days in the taxation year or fiscal period that follow 31 December 2018 and during which the individual is recognized as an eligible employee of the corporation or partnership, as the case may be, is of 365; and

(b)  the amount by which the amount of the wages incurred by the corporation or partnership in respect of the individual, after 31 December 2018 and in the part of the taxation year or fiscal period during which the individual is recognized as an eligible employee of the corporation or partnership, to the extent that that amount is paid, exceeds the aggregate of all amounts each of which is an amount of government assistance or non-government assistance attributable to such wages that the corporation or partnership has received, is entitled to receive or may reasonably expect to receive on or before, in the case of the corporation, the corporation’s filing-due date for the taxation year or, in the case of the partnership, the last day of the six-month period following the end of the fiscal period;

“recognized activity” means an information technology activity that is related to the production or dissemination of original information content intended for publication in an eligible media;

“specified member” of a corporation that is a cooperative in a taxation year means either a member of the cooperative that has, directly or indirectly, at any time in the year, at least 10% of the votes that could be cast at a meeting of the members of the cooperative or a person that does not deal at arm’s length with such a member;

“transitional period” means the calendar year 2019;

“wages” means the income computed under Chapters I and II of Title II of Book III;

“wholly-owned subsidiary” of a corporation or a partnership, for a taxation year of the corporation or a fiscal period of the partnership, means another corporation (other than an excluded subsidiary for that year or fiscal period) all of whose issued shares of each class of shares of its capital stock are owned by the corporation or partnership throughout that year or fiscal period.

In computing, for the purposes of the definition of “qualified expenditure” of a corporation or partnership for a taxation year or fiscal period of the corporation or partnership, the portion of the consideration referred to in that definition that is paid by the corporation or partnership to its wholly-owned subsidiary, the following rules apply:

(a)  the wages of an eligible employee of the wholly-owned subsidiary that are taken into account in that computation may not exceed the amount obtained by multiplying $75,000 by the proportion that the number of days in the taxation year or fiscal period that follow 31 December 2018 but precede 1 January 2020, and during which the individual is recognized as an eligible employee of the wholly-owned subsidiary is of 365; and

(b)  the portion of the consideration is to be reduced by the aggregate of all amounts each of which is an amount of government assistance or non-government assistance that is attributable to the portion of the wages, incurred and paid by the wholly-owned subsidiary in respect of its eligible employees, which is taken into account in computing that portion of the consideration and that the corporation or partnership has received, is entitled to receive or may reasonably expect to receive on or before, in the case of the corporation, the corporation’s filing-due date for the year or, in the case of the partnership, the last day of the six-month period following the end of the fiscal period.

For the purposes of subparagraph b of the second paragraph, an amount of government assistance or non-government assistance that is, at a particular time, received or receivable by the wholly-owned subsidiary of a corporation or partnership and that is attributable to the wages of its eligible employees is deemed to be received at that time by the corporation or partnership, as the case may be.

In determining, for the purposes of this division, whether an individual is an eligible employee of a corporation that is a wholly-owned subsidiary of another corporation or of a partnership for, as the case may be, a taxation year or a fiscal period of the corporation or partnership that includes all or part of the transitional period, the following rules apply:

(a)  the definition of “eligible employee” in the first paragraph is to be read

i.  as if “of a corporation or a partnership for all or part of a taxation year or fiscal period, as the case may be,” in the portion before paragraph a were replaced by “of a wholly-owned subsidiary of a corporation or partnership for all or part of a taxation year or fiscal period, as the case may be, of the corporation or partnership” and without reference to “, subject to the fourth paragraph,”,

ii.  as if “employee of the corporation or partnership” and “of the corporation or partnership situated either in Québec or, where the condition in the fifth paragraph is met, elsewhere in Canada” in paragraph a were replaced by “employee of the wholly-owned subsidiary” and “of the wholly-owned subsidiary situated in Québec”, respectively, and

iii.  as if “of the corporation or partnership” in paragraph b were replaced by “of the wholly-owned subsidiary”; and

(b)  the definition of “excluded employee” in the first paragraph is to be read

i.  without reference to “, subject to the fourth paragraph,” in the portion before paragraph a,

ii.  as if “where the employer is a corporation” in paragraph a were replaced by “where the employer is a wholly-owned subsidiary of the corporation”, and

iii.  as if “where the employer is a partnership” in paragraph b were replaced by “where the employer is a wholly-owned subsidiary of the partnership”.

An individual who reports for work at an establishment of a qualified corporation or qualified partnership situated in Canada outside Québec is an eligible employee of the corporation or partnership only if all of the corporation’s or partnership’s eligible employees who report for work at one of the corporation’s or partnership’s establishments situated in Québec represent at least 75% of all the individuals who are or would be, but for this paragraph, the corporation’s or partnership’s eligible employees.

For the purposes of the definition of “eligible employee” in the first paragraph, the following rules are taken into account:

(a)  where, during all or part of a taxation year or fiscal period, an employee reports for work at an establishment of a corporation or partnership situated in Québec and at an establishment of the corporation or partnership situated outside Québec, the employee is deemed, for that period,

i.  unless subparagraph ii applies, to report for work only at the establishment situated in Québec, or

ii.  to report for work only at the establishment situated outside Québec if, during that period, the employee reports for work mainly at an establishment of the corporation or partnership situated outside Québec; and

(b)  where, during all or part of a taxation year or fiscal period, an employee is not required to report for work at an establishment of a corporation or partnership and the employee’s wages in relation to that period are paid from such an establishment situated in Québec, the employee is deemed to report for work at that establishment if the duties performed by the employee during that period are performed mainly in Québec.

To determine whether, during all or part of a taxation year or fiscal period, an employee reports for work at an establishment of a corporation or partnership situated in Canada outside Québec, the sixth paragraph applies, subject to the following rules:

(a)  where, during that period, the employee reports for work at an establishment of the corporation or partnership situated in Canada outside Québec and at an establishment of the corporation or partnership situated outside Canada, subparagraph a of the sixth paragraph is to be read as if all occurrences of “in Québec” and “outside Québec” were replaced by “in Canada outside Québec” and “outside Canada”, respectively; and

(b)  where, during that period, the employee is not required to report for work at an establishment of the corporation or partnership and the employee’s wages in relation to that period are paid from such an establishment situated in Canada outside Québec, subparagraph b of the sixth paragraph is to be read as if “situated in Québec” and “mainly in Québec” were replaced by “situated in Canada outside Québec” and “mainly in the province where it is situated”, respectively.

2021, c. 14, s. 140.