I-3 - Taxation Act

Section 1029.8.36.0.0.12.1 Disposition versions

2024-05-07

1029.8.36.0.0.12.1. In this division,

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

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

“excluded corporation” for a taxation year means a corporation that is

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

(b)  a corporation that would, at any time in the year or during the 24 months preceding the year, 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;

(c)  exempt from tax for the year under Book VIII; or

(d)  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;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified production means, subject to the second and third paragraphs, the aggregate of the following amounts, but does not include any amount relating to the 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 qualification 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 qualification certificate, as the case may be, and that are paid by the corporation to its eligible employees, to the extent that they relate to services rendered in Québec as part of the production of the property until its first presentation outside Québec 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

(b)  the portion of the remuneration, other than salary or wages, 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 qualification 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 qualification certificate, as the case may be, that relates to services rendered in Québec to the corporation as part of the production of the property, 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 in Québec by the eligible individual as part of the production of the property, or to the wages of the eligible individual’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property,

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 to the wages of the particular corporation’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property,

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 in Québec 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 in Québec, to the extent that that portion of the remuneration is reasonably attributable to services rendered in Québec, as part of the production of the property, by an eligible individual who is a member of the partnership, or to the wages of the partnership’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property;

“qualified corporation” for a taxation year means a corporation, other than an excluded corporation, that, in the year, has an establishment in Québec and carries on a business in Québec that consists in particular in producing a qualified production;

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified production means, subject to the third and fifth paragraphs, 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 1129.4.0.16.2, up to 20/7 of the tax under Part III.1.0.4.1 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 before the end of which an application for an advance ruling has been filed in respect of the property with the Société de développement des entreprises culturelles and which precedes 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.1.0.4.1 for a taxation year preceding the year because of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.16.2, 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 amount of 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 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 amount of the labour expenditure of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  60% 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 first presentation of the property outside Québec 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 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.1.0.4.1 for a taxation year preceding the year in respect of the production of the property;

“qualified production” of a corporation means any of the following properties in respect of which the corporation holds a favourable advance ruling given or a qualification certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  a multimedia event presented in a place of amusement situated outside Québec; or

(b)  a multimedia environment for presentation outside Québec;

“salary or wages” means the income computed under 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)  a salary or wages or a remuneration does not include an expenditure incurred by a corporation in respect of the production of a qualified production before 21 March 2012;

(b)  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 production 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;

(c)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, 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;

(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 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 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 that is a qualified production 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 of the first presentation outside Québec of a property that is a qualified production;

(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 production 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 1029.8.36.0.0.12.2 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; and

(c)  an expenditure may not 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 production, or production costs directly attributable to the production of such a property incurred before the end of the year if it has been taken into consideration in computing such a labour expenditure or such costs in respect of another property that is a qualified production.

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 production, 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 1029.8.36.0.0.12.2, 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, or

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;

(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 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 described in paragraph a of the definition of“qualified production” in the first paragraph are the following amounts, but do not include however the costs incurred for the 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 described in paragraph a of the definition of “qualified production” in the first paragraph include the portion of the cost of acquisition of a particular property, owned by a 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;

(c)  the amount of a benefit attributable to production costs of a property that is described in paragraph a of the definition of “qualified production” in the first paragraph includes the portion of the proceeds of disposition for a corporation of a particular property used by it as part of the production of the property 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)  the production costs directly attributable to the production of a property that is described in paragraph b of the definition of “qualified production” in the first paragraph only include an amount equal to 75% of the consideration received by a corporation as part of the performance of the contract for the design and production of the property.

Where the definition of “qualified labour expenditure” in the first paragraph applies in respect of a property referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.12.2, it is to be read as if “20/7” were replaced wherever it appears by “25/7”.

2013, c. 10, s. 110; 2015, c. 21, s. 425; 2015, c. 36, s. 113; 2017, c. 1, s. 278; 2019, c. 14, s. 327; 2024, c. 11, s. 107.

2019-06-19

1029.8.36.0.0.12.1. In this division,

“eligible employee” of an individual, a corporation or a partnership means an individual resident in Québec at any time in the calendar year in which the individual renders services as part of a qualified production, in relation to a function referred to in any of subparagraphs 1 to 9 of the second paragraph of section 9.5 of Schedule H to the Act respecting the sectoral parameters of certain fiscal measures (chapter P-5.1);

“eligible individual” means an individual resident in Québec at any time in the calendar year in which the individual renders services as part of a qualified production, in relation to a function referred to in any of subparagraphs 1 to 9 of the second paragraph of section 9.5 of Schedule H to the Act respecting the sectoral parameters of certain fiscal measures;

“excluded corporation” for a taxation year means a corporation that is

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

(b)  a corporation that would, at any time in the year or during the 24 months preceding the year, 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;

(c)  exempt from tax for the year under Book VIII; or

(d)  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;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified production means, subject to the second and third paragraphs, the aggregate of the following amounts, but does not include any amount relating to the 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 qualification 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 qualification certificate, as the case may be, and that are paid by the corporation to its eligible employees, to the extent that they relate to services rendered in Québec as part of the production of the property until its first presentation outside Québec 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

(b)  the portion of the remuneration, other than salary or wages, 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 qualification 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 qualification certificate, as the case may be, that relates to services rendered in Québec to the corporation as part of the production of the property, 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 in Québec by the eligible individual as part of the production of the property, or to the wages of the eligible individual’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property,

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 to the wages of the particular corporation’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property,

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 in Québec 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 in Québec, to the extent that that portion of the remuneration is reasonably attributable to services rendered in Québec, as part of the production of the property, by an eligible individual who is a member of the partnership, or to the wages of the partnership’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property;

“qualified corporation” for a taxation year means a corporation, other than an excluded corporation, that, in the year, has an establishment in Québec and carries on a business in Québec that consists in particular in producing a qualified production;

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified production means, subject to the third and fifth paragraphs, 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 1129.4.0.16.2, up to 20/7 of the tax under Part III.1.0.4.1 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 before the end of which an application for an advance ruling has been filed in respect of the property with the Société de développement des entreprises culturelles and which precedes 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.1.0.4.1 for a taxation year preceding the year because of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.16.2, 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 amount of 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 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 amount of 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 first presentation of the property outside Québec 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 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.1.0.4.1 for a taxation year preceding the year in respect of the production of the property;

“qualified production” of a corporation means any of the following properties in respect of which the corporation holds a favourable advance ruling given or a qualification certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  a multimedia event presented in a place of amusement situated outside Québec; or

(b)  a multimedia environment for presentation outside Québec;

“salary or wages” means the income computed under 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)  a salary or wages or a remuneration does not include an expenditure incurred by a corporation in respect of the production of a qualified production before 21 March 2012;

(b)  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 production 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;

(c)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, 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;

(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 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 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 that is a qualified production 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 of the first presentation outside Québec of a property that is a qualified production;

(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 production 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 1029.8.36.0.0.12.2 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; and

(c)  an expenditure may not 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 production, or production costs directly attributable to the production of such a property incurred before the end of the year if it has been taken into consideration in computing such a labour expenditure or such costs in respect of another property that is a qualified production.

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 production, 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 1029.8.36.0.0.12.2, 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, or

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;

(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 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 described in paragraph a of the definition of“qualified production” in the first paragraph are the following amounts, but do not include however the costs incurred for the 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 described in paragraph a of the definition of “qualified production” in the first paragraph include the portion of the cost of acquisition of a particular property, owned by a 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;

(c)  the amount of a benefit attributable to production costs of a property that is described in paragraph a of the definition of “qualified production” in the first paragraph includes the portion of the proceeds of disposition for a corporation of a particular property used by it as part of the production of the property 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)  the production costs directly attributable to the production of a property that is described in paragraph b of the definition of “qualified production” in the first paragraph only include an amount equal to 75% of the consideration received by a corporation as part of the performance of the contract for the design and production of the property.

Where the definition of “qualified labour expenditure” in the first paragraph applies in respect of a property referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.12.2, it is to be read as if “20/7” were replaced wherever it appears by “25/7”.

2013, c. 10, s. 110; 2015, c. 21, s. 425; 2015, c. 36, s. 113; 2017, c. 1, s. 278; 2019, c. 14, s. 327.

2017-02-08

1029.8.36.0.0.12.1. In this division,

“eligible employee” of an individual, a corporation or a partnership means an individual resident in Québec at any time in the calendar year in which the individual renders services as part of a qualified production, in relation to a function referred to in any of subparagraphs 1 to 9 of the second paragraph of section 9.5 of Schedule H to the Act respecting the sectoral parameters of certain fiscal measures (chapter P-5.1);

“eligible individual” means an individual resident in Québec at any time in the calendar year in which the individual renders services as part of a qualified production, in relation to a function referred to in any of subparagraphs 1 to 9 of the second paragraph of section 9.5 of Schedule H to the Act respecting the sectoral parameters of certain fiscal measures;

“excluded corporation” for a taxation year means a corporation that is

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

(b)  a corporation that would be controlled, at any time in the year or during the 24 months preceding the year, 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;

(c)  exempt from tax for the year under Book VIII; or

(d)  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;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified production means, subject to the second and third paragraphs, 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 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 qualification 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 qualification certificate, as the case may be, and that are paid by the corporation to its eligible employees, to the extent that they relate to services rendered in Québec as part of the production of the property until its first presentation outside Québec 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

(b)  the portion of the remuneration, other than salary or wages, 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 qualification 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 qualification certificate, as the case may be, that relates to services rendered in Québec to the corporation as part of the production of the property, 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 in Québec by the eligible individual as part of the production of the property, or to the wages of the eligible individual’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property,

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 to the wages of the particular corporation’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property,

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 in Québec 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 in Québec, to the extent that that portion of the remuneration is reasonably attributable to services rendered in Québec, as part of the production of the property, by an eligible individual who is a member of the partnership, or to the wages of the partnership’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property;

“qualified corporation” for a taxation year means a corporation, other than an excluded corporation, that, in the year, has an establishment in Québec and carries on a business in Québec that consists in particular in producing a qualified production;

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified production means, subject to the third and fifth paragraphs, 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 1129.4.0.16.2, up to 20/7 of the tax under Part III.1.0.4.1 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 before the end of which an application for an advance ruling has been filed in respect of the property with the Société de développement des entreprises culturelles and which precedes 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.1.0.4.1 for a taxation year preceding the year because of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.16.2, 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 amount of 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 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 amount of 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 first presentation of the property outside Québec 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 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.1.0.4.1 for a taxation year preceding the year in respect of the production of the property;

“qualified production” of a corporation means any of the following properties in respect of which the corporation holds a favourable advance ruling given or a qualification certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  a multimedia event presented in a place of amusement situated outside Québec; or

(b)  a multimedia environment for presentation outside Québec;

“salary or wages” means the income computed under 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)  a salary or wages or a remuneration does not include an expenditure incurred by a corporation in respect of the production of a qualified production before 21 March 2012;

(b)  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 production 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;

(c)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, 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;

(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 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 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 that is a qualified production 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 of the first presentation outside Québec of a property that is a qualified production;

(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 production, 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 1029.8.36.0.0.12.2 for that taxation year; and

(c)  an expenditure may not 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 production, or production costs directly attributable to the production of such a property incurred before the end of the year if it has been taken into consideration in computing such a labour expenditure or such costs in respect of another property that is a qualified production.

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 production, 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 1029.8.36.0.0.12.2, 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, or

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;

(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 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 described in paragraph a of the definition of “qualified production” in the first paragraph are the following amounts, to the extent that they are reasonable in the circumstances, but do not include however the costs incurred for the 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 described in paragraph a of the definition of “qualified production” in the first paragraph include the portion of the cost of acquisition of a particular property, owned by a 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;

(c)  the amount of a benefit attributable to production costs of a property that is described in paragraph a of the definition of “qualified production” in the first paragraph includes the portion of the proceeds of disposition for a corporation of a particular property used by it as part of the production of the property 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)  the production costs directly attributable to the production of a property that is described in paragraph b of the definition of “qualified production” in the first paragraph only include an amount equal to 75% of the consideration received by a corporation as part of the performance of the contract for the design and production of the property.

Where the definition of “qualified labour expenditure” in the first paragraph applies in respect of a property referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.12.2, it is to be read as if “20/7” were replaced wherever it appears by “25/7”.

2013, c. 10, s. 110; 2015, c. 21, s. 425; 2015, c. 36, s. 113; 2017, c. 1, s. 278.

2015-12-04

1029.8.36.0.0.12.1. In this division,

“eligible employee” of an individual, a corporation or a partnership means an individual resident in Québec at any time in the calendar year in which the individual renders services as part of a qualified production, in relation to a function referred to in any of subparagraphs 1 to 9 of the second paragraph of section 9.5 of Schedule H to the Act respecting the sectoral parameters of certain fiscal measures (chapter P-5.1);

“eligible individual” means an individual resident in Québec at any time in the calendar year in which the individual renders services as part of a qualified production, in relation to a function referred to in any of subparagraphs 1 to 9 of the second paragraph of section 9.5 of Schedule H to the Act respecting the sectoral parameters of certain fiscal measures;

“excluded corporation” for a taxation year means a corporation that is

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

(b)  a corporation that would be controlled, at any time in the year or during the 24 months preceding the year, 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;

(c)  exempt from tax for the year under Book VIII; or

(d)  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;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified production means, subject to the second and third paragraphs, 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 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 qualification 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 qualification certificate, as the case may be, and that are paid by the corporation to its eligible employees, to the extent that they relate to services rendered in Québec as part of the production of the property until its first presentation outside Québec 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

(b)  the portion of the remuneration, other than salary or wages, 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 qualification 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 qualification certificate, as the case may be, that relates to services rendered in Québec to the corporation as part of the production of the property, 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 in Québec by the eligible individual as part of the production of the property, or to the wages of the eligible individual’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property,

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 to the wages of the particular corporation’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property,

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 in Québec 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 in Québec, to the extent that that portion of the remuneration is reasonably attributable to services rendered in Québec, as part of the production of the property, by an eligible individual who is a member of the partnership, or to the wages of the partnership’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property;

“qualified corporation” for a taxation year means a corporation, other than an excluded corporation, that, in the year, has an establishment in Québec and carries on a business in Québec that consists in particular in producing a qualified production;

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified production means, subject to the third and fifth paragraphs, 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 1129.4.0.16.2, up to 20/7 of the tax under Part III.1.0.4.1 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 before the end of which an application for an advance ruling has been filed in respect of the property with the Société de développement des entreprises culturelles and which precedes 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.1.0.4.1 for a taxation year preceding the year because of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.16.2, 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 amount of 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 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 amount of 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 first presentation of the property outside Québec 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 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.1.0.4.1 for a taxation year preceding the year in respect of the production of the property;

“qualified production” of a corporation means any of the following properties in respect of which the corporation holds a favourable advance ruling given or a qualification certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  a multimedia event presented in a place of amusement situated outside Québec; or

(b)  a multimedia environment for presentation outside Québec;

“salary or wages” means the income computed under 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)  a salary or wages or a remuneration does not include an expenditure incurred by a corporation in respect of the production of a qualified production before 21 March 2012;

(b)  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 production 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;

(c)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, 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;

(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 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 that is a qualified production 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 of the first presentation outside Québec of a property that is a qualified production;

(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 production, 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 1029.8.36.0.0.12.2 for that taxation year; and

(c)  an expenditure may not 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 production, or production costs directly attributable to the production of such a property incurred before the end of the year if it has been taken into consideration in computing such a labour expenditure or such costs in respect of another property that is a qualified production.

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 production, 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 1029.8.36.0.0.12.2, 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, or

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;

(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 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 described in paragraph a of the definition of “qualified production” in the first paragraph are the following amounts, to the extent that they are reasonable in the circumstances, but do not include however the costs incurred for the 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 described in paragraph a of the definition of “qualified production” in the first paragraph include the portion of the cost of acquisition of a particular property, owned by a 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;

(c)  the amount of a benefit attributable to production costs of a property that is described in paragraph a of the definition of “qualified production” in the first paragraph includes the portion of the proceeds of disposition for a corporation of a particular property used by it as part of the production of the property 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)  the production costs directly attributable to the production of a property that is described in paragraph b of the definition of “qualified production” in the first paragraph only include an amount equal to 75% of the consideration received by a corporation as part of the performance of the contract for the design and production of the property.

Where the definition of “qualified labour expenditure” in the first paragraph applies in respect of a property referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.12.2, it is to be read as if “20/7” were replaced wherever it appears by “25/7”.

2013, c. 10, s. 110; 2015, c. 21, s. 425; 2015, c. 36, s. 113.

2015-10-21

1029.8.36.0.0.12.1. In this division,

“eligible employee” of an individual, a corporation or a partnership means an individual resident in Québec at any time in the calendar year in which the individual renders services as part of a qualified production, in relation to a function referred to in any of subparagraphs 1 to 9 of the second paragraph of section 9.5 of Schedule H to the Act respecting the sectoral parameters of certain fiscal measures (chapter P-5.1);

“eligible individual” means an individual resident in Québec at any time in the calendar year in which the individual renders services as part of a qualified production, in relation to a function referred to in any of subparagraphs 1 to 9 of the second paragraph of section 9.5 of Schedule H to the Act respecting the sectoral parameters of certain fiscal measures;

“excluded corporation” for a taxation year means a corporation that is

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

(b)  a corporation that would be controlled, at any time in the year or during the 24 months preceding the year, 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;

(c)  exempt from tax for the year under Book VIII; or

(d)  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;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified production means, subject to the second and third paragraphs, 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 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 qualification 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 qualification certificate, as the case may be, and that are paid by the corporation to its eligible employees, to the extent that they relate to services rendered in Québec as part of the production of the property until its first presentation outside Québec 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

(b)  the portion of the remuneration, other than salary or wages, 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 qualification 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 qualification certificate, as the case may be, that relates to services rendered in Québec to the corporation as part of the production of the property, 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 in Québec by the eligible individual as part of the production of the property, or to the wages of the eligible individual’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property,

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 to the wages of the particular corporation’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property,

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 in Québec 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 in Québec, to the extent that that portion of the remuneration is reasonably attributable to services rendered in Québec, as part of the production of the property, by an eligible individual who is a member of the partnership, or to the wages of the partnership’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property;

“qualified corporation” for a taxation year means a corporation, other than an excluded corporation, that, in the year, has an establishment in Québec and carries on a business in Québec that consists in particular in producing a qualified production;

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified production means, subject to the third and fifth paragraphs, 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 1129.4.0.16.2, up to 25/7 of the tax under Part III.1.0.4.1 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 before the end of which an application for an advance ruling has been filed in respect of the property with the Société de développement des entreprises culturelles and which precedes 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.1.0.4.1 for a taxation year preceding the year because of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.16.2, 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 amount of 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 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 amount of 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 first presentation of the property outside Québec 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 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.1.0.4.1 for a taxation year preceding the year in respect of the production of the property;

“qualified production” of a corporation means any of the following properties in respect of which the corporation holds a favourable advance ruling given or a qualification certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  a multimedia event presented in a place of amusement situated outside Québec; or

(b)  a multimedia environment for presentation outside Québec;

“salary or wages” means the income computed under 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)  a salary or wages or a remuneration does not include an expenditure incurred by a corporation in respect of the production of a qualified production before 21 March 2012 and after 31 December 2015;

(b)  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 production 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;

(c)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, 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;

(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 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 that is a qualified production 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 of the first presentation outside Québec of a property that is a qualified production;

(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 production, 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 1029.8.36.0.0.12.2 for that taxation year; and

(c)  an expenditure may not 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 production, or production costs directly attributable to the production of such a property incurred before the end of the year if it has been taken into consideration in computing such a labour expenditure or such costs in respect of another property that is a qualified production.

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 production, 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 1029.8.36.0.0.12.2, 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, or

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;

(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 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 described in paragraph a of the definition of “qualified production” in the first paragraph are the following amounts, to the extent that they are reasonable in the circumstances, but do not include however the costs incurred for the 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 described in paragraph a of the definition of “qualified production” in the first paragraph include the portion of the cost of acquisition of a particular property, owned by a 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;

(c)  the amount of a benefit attributable to production costs of a property that is described in paragraph a of the definition of “qualified production” in the first paragraph includes the portion of the proceeds of disposition for a corporation of a particular property used by it as part of the production of the property 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)  the production costs directly attributable to the production of a property that is described in paragraph b of the definition of “qualified production” in the first paragraph only include an amount equal to 75% of the consideration received by a corporation as part of the performance of the contract for the design and production of the property.

Where the definition of “qualified labour expenditure” in the first paragraph 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 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, it is to be read as if “25/7” were replaced wherever it appears by “20/7”.

2013, c. 10, s. 110; 2015, c. 21, s. 425.

2013-06-05

1029.8.36.0.0.12.1. In this division,

“eligible employee” of an individual, a corporation or a partnership means an individual resident in Québec at any time in the calendar year in which the individual renders services as part of a qualified production, in relation to a function referred to in any of subparagraphs 1 to 9 of the second paragraph of section 9.5 of Schedule H to the Act respecting the sectoral parameters of certain fiscal measures (chapter P-5.1);

“eligible individual” means an individual resident in Québec at any time in the calendar year in which the individual renders services as part of a qualified production, in relation to a function referred to in any of subparagraphs 1 to 9 of the second paragraph of section 9.5 of Schedule H to the Act respecting the sectoral parameters of certain fiscal measures;

“excluded corporation” for a taxation year means a corporation that is

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

(b)  a corporation that would be controlled, at any time in the year or during the 24 months preceding the year, 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;

(c)  exempt from tax for the year under Book VIII; or

(d)  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;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified production means, subject to the second and third paragraphs, 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 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 qualification 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 qualification certificate, as the case may be, and that are paid by the corporation to its eligible employees, to the extent that they relate to services rendered in Québec as part of the production of the property until its first presentation outside Québec 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

(b)  the portion of the remuneration, other than salary or wages, 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 qualification 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 qualification certificate, as the case may be, that relates to services rendered in Québec to the corporation as part of the production of the property, 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 in Québec by the eligible individual as part of the production of the property, or to the wages of the eligible individual’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property,

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 to the wages of the particular corporation’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property,

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 in Québec 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 in Québec, to the extent that that portion of the remuneration is reasonably attributable to services rendered in Québec, as part of the production of the property, by an eligible individual who is a member of the partnership, or to the wages of the partnership’s eligible employees that relate to services rendered in Québec by the eligible employees as part of the production of the property;

“qualified corporation” for a taxation year means a corporation, other than an excluded corporation, that, in the year, has an establishment in Québec and carries on a business in Québec that consists in particular in producing a qualified production;

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a qualified production means, subject to the third and fifth paragraphs, 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 1129.4.0.16.2, up to 20/7 of the tax under Part III.1.0.4.1 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 before the end of which an application for an advance ruling has been filed in respect of the property with the Société de développement des entreprises culturelles and which precedes 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.1.0.4.1 for a taxation year preceding the year because of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.16.2, 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 amount of 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 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 amount of 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 first presentation of the property outside Québec 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 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.1.0.4.1 for a taxation year preceding the year in respect of the production of the property;

“qualified production” of a corporation means any of the following properties in respect of which the corporation holds a favourable advance ruling given or a qualification certificate issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division:

(a)  a multimedia event presented in a place of amusement situated outside Québec; or

(b)  a multimedia environment for presentation outside Québec;

“salary or wages” means the income computed under 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)  a salary or wages or a remuneration does not include an expenditure incurred by a corporation in respect of the production of a qualified production before 21 March 2012 and after 31 December 2015;

(b)  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 production 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;

(c)  remuneration, including a salary or wages, does not include remuneration by reference to the profits or revenues derived from the operation of the property, 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;

(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 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 that is a qualified production 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 of the first presentation outside Québec of a property that is a qualified production;

(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 production, 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 1029.8.36.0.0.12.2 for that taxation year; and

(c)  an expenditure may not 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 production, or production costs directly attributable to the production of such a property incurred before the end of the year if it has been taken into consideration in computing such a labour expenditure or such costs in respect of another property that is a qualified production.

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 production, 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 1029.8.36.0.0.12.2, 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, or

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;

(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 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 described in paragraph a of the definition of “qualified production” in the first paragraph are the following amounts, to the extent that they are reasonable in the circumstances, but do not include however the costs incurred for the 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 described in paragraph a of the definition of “qualified production” in the first paragraph include the portion of the cost of acquisition of a particular property, owned by a 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;

(c)  the amount of a benefit attributable to production costs of a property that is described in paragraph a of the definition of “qualified production” in the first paragraph includes the portion of the proceeds of disposition for a corporation of a particular property used by it as part of the production of the property 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)  the production costs directly attributable to the production of a property that is described in paragraph b of the definition of “qualified production” in the first paragraph only include an amount equal to 75% of the consideration received by a corporation as part of the performance of the contract for the design and production of the property.

2013, c. 10, s. 110.