I-3 - Taxation Act

Section 1029.8.36.0.3.46 Disposition versions

2021-06-04

1029.8.36.0.3.46. (Repealed).

2002, c. 9, s. 74; 2004, c. 21, s. 325; 2005, c. 1, s. 238; 2006, c. 13, s. 125; 2009, c. 15, s. 238; 2021, c. 18, s. 119.

2009-06-04

1029.8.36.0.3.46. In this division,

“associated employer” of a particular corporation at the end of a calendar year means an employer who has an establishment in Québec and at that time is a corporation with which the particular corporation is associated;

“base calendar year” of a corporation means the calendar year preceding the calendar year that includes the date of the beginning of the operations of the corporation;

“date of the beginning of the operations” of a corporation means the effective date specified in the first valid qualification certificate, referred to in the first paragraph of section 1029.8.36.0.3.48, that was issued to the corporation for a taxation year;

“eligibility period” of a corporation for a taxation year means the portion of the year included in the period that begins on 12 May 2000 and ends,

(a)  where the qualification certificate referred to in the first paragraph of section 1029.8.36.0.3.48 that was issued to the corporation for the year is not revoked

i.  on 31 December 2010, if the effective date specified in the first valid qualification certificate, referred to in the first paragraph of section 1029.8.36.0.3.48, that was issued to the corporation for a taxation year precedes 1 January 2001, or on the last day of the 10-year period that begins on that effective date, if that effective date is before 1 January 2004 but after 31 December 2000, and

ii.  on 31 December 2013, in any other case; or

(b)  where the qualification certificate referred to in the first paragraph of section 1029.8.36.0.3.48 that was issued to the corporation for the year is revoked, on the earlier of the day that precedes the day on which the revocation of that certificate is effective and the date that would be determined in accordance with paragraph a if it applied to the corporation for that year;

“eligible activity” of a corporation for a taxation year means an activity that the corporation carries on in the year and that is covered by the qualification certificate referred to in the first paragraph of section 1029.8.36.0.3.48 that Investissement Québec issues to the corporation for the year;

“eligible employee” of a corporation for all or part of a taxation year means an individual in respect of whom a qualification certificate is issued to the corporation for the year by Investissement Québec for the purposes of this division, certifying that the individual is an eligible employee for all or that part of the year;

“modified rate” for a particular year of operation of a corporation means the rate determined under section 1029.8.36.0.3.50 for the particular year of operation of the corporation that is subsequent to its fifth year of operation;

“qualified corporation” for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on a qualified business in Québec and that is not

(a)  a tax-exempt corporation 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;

(c)  a corporation control of which is acquired at the beginning of the year or of a preceding taxation year, but after 11 June 2003, by a person or group of persons, unless acquiring control of the corporation

i.  occurs before 1 July 2004 and Investissement Québec certifies that the acquisition of control results from a transaction that was sufficiently advanced on 11 June 2003 and was binding on the parties on that date,

ii.  is by a qualified corporation, by a person or group of persons that controls a qualified corporation, or by a group of persons each member of which is a qualified corporation or a person who, alone or together with other members of the group, controls such a corporation,

iii.  derives from the exercise after 11 June 2003 of one or more rights described in paragraph b of section 20 that were acquired before 12 June 2003, or

iv.  derives from the performance after 11 June 2003 of one or more obligations described in the third paragraph of section 21.3.5 that were contracted before 12 June 2003; or

(d)  a corporation that has made an election under the fourth or fifth paragraph of section 1029.8.36.0.3.80 for the year or a preceding taxation year;

“qualified wages” incurred by a qualified corporation in a taxation year in respect of one of its eligible employees for all or part of the taxation year means the lesser of

(a)  the amount determined for the year pursuant to section 1029.8.36.0.3.47 in relation to the eligible employee; and

(b)  the amount by which the amount of the wages incurred by the qualified corporation in respect of the employee, in the corporation’s eligibility period for the year, while the employee qualified as an eligible employee of the qualified corporation, to the extent that that amount is paid and that it may reasonably be considered to relate to the carrying on of an eligible activity by the eligible employee in the year, exceeds the aggregate of

i.  the aggregate of all amounts each of which is an amount of government assistance or non-government assistance attributable to such wages that the qualified corporation has received, is entitled to receive or may reasonably expect to receive, on or before the qualified corporation’s filing-due date for the taxation year, and

ii.  the aggregate of all amounts each of which is the amount of a benefit or advantage in respect of such wages, other than a benefit or advantage that may reasonably be attributed to work carried out by the eligible employee in connection with the carrying on of the eligible activity of the qualified corporation for the taxation year that a person or partnership has received, is entitled to receive or may reasonably expect to receive, on or before the qualified corporation’s filing-due date for that taxation year, whether in the form of a reimbursement, compensation, guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner;

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

“year of operation” that is a particular year of operation of a corporation means the period that begins on the date of the beginning of the operations of the corporation and that ends on the day that is one year after the day immediately preceding that date, or the period that begins on a particular day that occurs at each successive one-year interval after the date of the beginning of the operations of the corporation and that ends on the day that is one year after the day immediately preceding that particular day.

For the purposes of the definition of “date of the beginning of the operations” in the first paragraph, where two or more qualified corporations are associated with each other at the end of a calendar year, the date of the beginning of the operations of each of those qualified corporations is deemed to be the date that is the earliest of their respective dates of the beginning of the operations.

For the purposes of the definition of “associated employer” in the first paragraph, the following rules apply:

(a)  where an employer is an individual, other than a trust, the individual is deemed to be a corporation, all of the voting shares in the capital stock of which are owned at the end of a calendar year by the individual;

(b)  where an employer is a partnership, the partnership is deemed to be a corporation whose taxation year corresponds to the partnership’s fiscal period and all the voting shares in the capital stock of which are owned at the end of a calendar year by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s last fiscal period that ends at or before that time; and

(c)  where an employer is a trust, the trust is deemed to be a corporation all of the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries, in this paragraph referred to as the “distribution date”, and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  where any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and where that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  where subparagraph 1 does not apply and where that time occurs before the distribution date, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  where a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, except where subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, except where subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to therein from whom property of the trust or property for which it was substituted was directly or indirectly received.

For the application of the definition of “eligibility period” in the first paragraph to a corporation that, in its taxation year for which its first valid qualification certificate, referred to in the first paragraph of section 1029.8.36.0.3.48, is issued to it, is associated with one or more other qualified corporations, the effective date specified in that first qualification certificate and to which subparagraph i of paragraph a of that definition refers is deemed to be the earlier of the effective date and all of the dates each of which is the effective date specified in the first qualification certificate that was issued to any of the other qualified corporations.

2002, c. 9, s. 74; 2004, c. 21, s. 325; 2005, c. 1, s. 238; 2006, c. 13, s. 125; 2009, c. 15, s. 238.

2006-06-13

1029.8.36.0.3.46. In this division,

“associated employer” of a particular corporation at the end of a calendar year means an employer who has an establishment in Québec and at that time is a corporation with which the particular corporation is associated;

“base calendar year” of a corporation means the calendar year preceding the calendar year that includes the date of the beginning of the operations of the corporation;

“date of the beginning of the operations” of a corporation means the effective date specified in the first valid qualification certificate, referred to in the first paragraph of section 1029.8.36.0.3.48, that was issued to the corporation for a taxation year;

“eligibility period” of a corporation for a taxation year means the portion of the year included in the period that begins on 12 May 2000 and ends,

(a)  where the qualification certificate referred to in the first paragraph of section 1029.8.36.0.3.48 that was issued to the corporation for the year is not revoked

i.  on 31 December 2010, if the effective date specified in the first valid qualification certificate, referred to in the first paragraph of section 1029.8.36.0.3.48, that was issued to the corporation for a taxation year precedes 1 January 2001, or on the last day of the 10-year period that begins on that effective date, if that effective date is before 1 January 2004 but after 31 December 2000, and

ii.  on 31 December 2013, in any other case; or

(b)  where the qualification certificate referred to in the first paragraph of section 1029.8.36.0.3.48 that was issued to the corporation for the year is revoked, on the earlier of the day that precedes the day on which the revocation of that certificate is effective and the date that would be determined in accordance with paragraph a if it applied to the corporation for that year;

“eligible activity” of a corporation for a taxation year means an activity that the corporation carries on in the year and that, as certified by the qualification certificate referred to in the first paragraph of section 1029.8.36.0.3.48 that Investissement Québec issues to the corporation for the year, is in connection with the development and supplying of products and services relating to e-business or with the operation of e-business solutions;

“eligible employee” of a corporation for all or part of a taxation year means an individual in respect of whom a qualification certificate is issued to the corporation for the year by Investissement Québec for the purposes of this division, certifying that the individual is an eligible employee for all or that part of the year;

“modified rate” for a particular year of operation of a corporation means the rate determined under section 1029.8.36.0.3.50 for the particular year of operation of the corporation that is subsequent to its fifth year of operation;

“qualified corporation” for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on a qualified business in Québec and that is not

(a)  a tax-exempt corporation 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 control of which is acquired at the beginning of the year or of a preceding taxation year, but after 11 June 2003, by a person or group of persons, unless acquiring control of the corporation

i.  occurs before 1 July 2004 and Investissement Québec certifies that the acquisition of control results from a transaction that was sufficiently advanced on 11 June 2003 and was binding on the parties on that date,

ii.  is by a qualified corporation, by a person or group of persons that controls a qualified corporation, or by a group of persons each member of which is a qualified corporation or a person who, alone or together with other members of the group, controls such a corporation,

iii.  derives from the exercise after 11 June 2003 of one or more rights described in paragraph b of section 20 that were acquired before 12 June 2003, or

iv.  derives from the performance after 11 June 2003 of one or more obligations described in the third paragraph of section 21.3.5 that were contracted before 12 June 2003;

“qualified wages” incurred by a qualified corporation in a taxation year in respect of one of its eligible employees for all or part of the taxation year means the lesser of

(a)  the amount determined for the year pursuant to section 1029.8.36.0.3.47 in relation to the eligible employee; and

(b)  the amount by which the amount of the wages incurred by the qualified corporation in respect of the employee, in the corporation’s eligibility period for the year, while the employee qualified as an eligible employee of the qualified corporation, to the extent that that amount is paid and that it may reasonably be considered to relate to the carrying on of an eligible activity by the eligible employee in the year, exceeds the aggregate of

i.  the aggregate of all amounts each of which is an amount of government assistance or non-government assistance attributable to such wages that the qualified corporation has received, is entitled to receive or may reasonably expect to receive, on or before the qualified corporation’s filing-due date for the taxation year, and

ii.  the aggregate of all amounts each of which is the amount of a benefit or advantage in respect of such wages, other than a benefit or advantage that may reasonably be attributed to work carried out by the eligible employee in connection with the carrying on of the eligible activity of the qualified corporation for the taxation year that a person or partnership has received, is entitled to receive or may reasonably expect to receive, on or before the qualified corporation’s filing-due date for that taxation year, whether in the form of a reimbursement, compensation, guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner;

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

“year of operation” that is a particular year of operation of a corporation means the period that begins on the date of the beginning of the operations of the corporation and that ends on the day that is one year after the day immediately preceding that date, or the period that begins on a particular day that occurs at each successive one-year interval after the date of the beginning of the operations of the corporation and that ends on the day that is one year after the day immediately preceding that particular day.

For the purposes of the definition of “date of the beginning of the operations” in the first paragraph, where two or more qualified corporations are associated with each other at the end of a calendar year, the date of the beginning of the operations of each of those qualified corporations is deemed to be the date that is the earliest of their respective dates of the beginning of the operations.

For the purposes of the definition of “associated employer” in the first paragraph, the following rules apply:

(a)  where an employer is an individual, other than a trust, the individual is deemed to be a corporation, all of the voting shares in the capital stock of which are owned at the end of a calendar year by the individual;

(b)  where an employer is a partnership, the partnership is deemed to be a corporation, the taxation year of which covers the same period as its fiscal period and all of the voting shares in the capital stock of which are owned at the end of a calendar year by each member of the partnership in a proportion equal to the proportion that

i.  the member’s share of the income or loss of the partnership for the last fiscal period of the partnership that ends at or before that time, on the assumption that, if the income and loss of the partnership for that fiscal period are nil, the partnership’s income for that fiscal period is equal to $1,000,000, is of

ii.  the income or loss of the partnership for its fiscal period that ends at or before that time, on the assumption that, if the income and loss of the partnership for that fiscal period are nil, the partnership’s income for that fiscal period is equal to $1,000,000; and

(c)  where an employer is a trust, the trust is deemed to be a corporation all of the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries, in this paragraph referred to as the “distribution date”, and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  where any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and where that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  where subparagraph 1 does not apply and where that time occurs before the distribution date, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  where a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, except where subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, except where subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to therein from whom property of the trust or property for which it was substituted was directly or indirectly received.

For the application of the definition of “eligibility period” in the first paragraph to a corporation that, in its taxation year for which its first valid qualification certificate, referred to in the first paragraph of section 1029.8.36.0.3.48, is issued to it, is associated with one or more other qualified corporations, the effective date specified in that first qualification certificate and to which subparagraph i of paragraph a of that definition refers is deemed to be the earlier of the effective date and all of the dates each of which is the effective date specified in the first qualification certificate that was issued to any of the other qualified corporations.

2002, c. 9, s. 74; 2004, c. 21, s. 325; 2005, c. 1, s. 238; 2006, c. 13, s. 125.

2006-03-01

1029.8.36.0.3.46. In this division,

"associated employer" of a particular corporation at the end of a calendar year means an employer who has an establishment in Québec and at that time is a corporation with which the particular corporation is associated;

"base calendar year" of a corporation means the calendar year preceding the calendar year that includes the date of the beginning of the operations of the corporation;

"date of the beginning of the operations" of a corporation means the effective date specified in the first valid qualification certificate, referred to in the first paragraph of section 1029.8.36.0.3.48, that was issued to the corporation for a taxation year;

"eligibility period" of a corporation for a taxation year means the portion of the year included in the period that begins on 12 May 2000 and ends,

(a)  where the qualification certificate referred to in the first paragraph of section 1029.8.36.0.3.48 that was issued to the corporation for the year is not revoked

i.  on 31 December 2010, if the effective date specified in the first valid qualification certificate, referred to in the first paragraph of section 1029.8.36.0.3.48, that was issued to the corporation for a taxation year precedes 1 January 2001, or on the last day of the 10-year period that begins on that effective date, if that effective date is before 1 January 2004 but after 31 December 2000, and

ii.  on 31 December 2013, in any other case; or

(b)  where the qualification certificate referred to in the first paragraph of section 1029.8.36.0.3.48 that was issued to the corporation for the year is revoked, on the earlier of the day that precedes the day on which the revocation of that certificate is effective and the date that would be determined in accordance with paragraph a if it applied to the corporation for that year;

"eligible activity" of a corporation for a taxation year means an activity that the corporation carries on in the year and that, as certified by the qualification certificate referred to in the first paragraph of section 1029.8.36.0.3.48 that Investissement Québec issues to the corporation for the year, is in connection with the development and supplying of products and services relating to e-business or with the operation of e-business solutions;

"eligible employee" of a corporation for all or part of a taxation year means an individual in respect of whom a qualification certificate is issued to the corporation for the year by Investissement Québec for the purposes of this division, certifying that the individual is an eligible employee for all or that part of the year;

"modified rate" for a particular year of operation of a corporation means the rate determined under section 1029.8.36.0.3.50 for the particular year of operation of the corporation that is subsequent to its fifth year of operation;

"qualified corporation" for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on a qualified business in Québec and that is not

(a)  a tax-exempt corporation 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 control of which is acquired at the beginning of the year or of a preceding taxation year, but after 11 June 2003, by a person or group of persons, unless acquiring control of the corporation

i.  occurs after 11 June 2003 and before 1 July 2004, where Investissement Québec certifies that the acquisition of control results from a transaction that was sufficiently advanced on 11 June 2003 and was binding on the parties on that date,

ii.  is by a qualified corporation or by a group of persons all the members of which are qualified corporations, or

iii.  derives from the exercise after 11 June 2003 of one or more rights described in paragraph b of section 20 that were acquired before 12 June 2003;

"qualified wages" incurred by a qualified corporation in a taxation year in respect of one of its eligible employees for all or part of the taxation year means the lesser of

(a)  the amount determined for the year pursuant to section 1029.8.36.0.3.47 in relation to the eligible employee; and

(b)  the amount by which the amount of the wages incurred by the qualified corporation in respect of the employee, in the corporation’s eligibility period for the year, while the employee qualified as an eligible employee of the qualified corporation, to the extent that that amount is paid and that it may reasonably be considered to relate to the carrying on of an eligible activity by the eligible employee in the year, exceeds the aggregate of

i.  the aggregate of all amounts each of which is an amount of government assistance or non-government assistance attributable to such wages that the qualified corporation has received, is entitled to receive or may reasonably expect to receive, on or before the qualified corporation’s filing-due date for the taxation year, and

ii.  the aggregate of all amounts each of which is the amount of a benefit or advantage in respect of such wages, other than a benefit or advantage that may reasonably be attributed to work carried out by the eligible employee in connection with the carrying on of the eligible activity of the qualified corporation for the taxation year that a person or partnership has received, is entitled to receive or may reasonably expect to receive, on or before the qualified corporation’s filing-due date for that taxation year, whether in the form of a reimbursement, compensation, guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner;

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

"year of operation" that is a particular year of operation of a corporation means the period that begins on the date of the beginning of the operations of the corporation and that ends on the day that is one year after the day immediately preceding that date, or the period that begins on a particular day that occurs at each successive one-year interval after the date of the beginning of the operations of the corporation and that ends on the day that is one year after the day immediately preceding that particular day.

For the purposes of the definition of "date of the beginning of the operations" in the first paragraph, where two or more qualified corporations are associated with each other at the end of a calendar year, the date of the beginning of the operations of each of those qualified corporations is deemed to be the date that is the earliest of their respective dates of the beginning of the operations.

For the purposes of the definition of "associated employer" in the first paragraph, the following rules apply:

(a)  where an employer is an individual, other than a trust, the individual is deemed to be a corporation, all of the voting shares in the capital stock of which are owned at the end of a calendar year by the individual;

(b)  where an employer is a partnership, the partnership is deemed to be a corporation, the taxation year of which covers the same period as its fiscal period and all of the voting shares in the capital stock of which are owned at the end of a calendar year by each member of the partnership in a proportion equal to the proportion that

i.  the member’s share of the income or loss of the partnership for the last fiscal period of the partnership that ends at or before that time, on the assumption that, if the income and loss of the partnership for that fiscal period are nil, the partnership’s income for that fiscal period is equal to $1,000,000, is of

ii.  the income or loss of the partnership for its fiscal period that ends at or before that time, on the assumption that, if the income and loss of the partnership for that fiscal period are nil, the partnership’s income for that fiscal period is equal to $1,000,000; and

(c)  where an employer is a trust, the trust is deemed to be a corporation all of the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries, in this paragraph referred to as the "distribution date", and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  where any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and where that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  where subparagraph 1 does not apply and where that time occurs before the distribution date, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  where a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, except where subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, except where subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to therein from whom property of the trust or property for which it was substituted was directly or indirectly received.

For the application of the definition of "eligibility period" in the first paragraph to a corporation that, in its taxation year for which its first valid qualification certificate, referred to in the first paragraph of section 1029.8.36.0.3.48, is issued to it, is associated with one or more other qualified corporations, the effective date specified in that first qualification certificate and to which subparagraph i of paragraph a of that definition refers is deemed to be the earlier of the effective date and all of the dates each of which is the effective date specified in the first qualification certificate that was issued to any of the other qualified corporations.

2002, c. 9, s. 74; 2004, c. 21, s. 325; 2005, c. 1, s. 238.