I-3 - Taxation Act

Section 1029.8.36.0.0.13 Disposition versions

2024-05-07

1029.8.36.0.0.13. In this division,

“eligible digital version” of an eligible work or a work that is part of an eligible group of works published by a corporation means a digital version of that work in respect of which the Société de développement des entreprises culturelles specifies in the favourable advance ruling given or the certificate issued to the corporation in respect of the eligible work or eligible group of works, for the purposes of this division, that the digital version is an eligible digital version of the work or of the work that is part of the group of works;

“eligible employee” of an individual, a corporation or a partnership, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out work relating to the property that is eligible preparation work, eligible printing work, eligible reprinting work or eligible publishing work concerning an eligible digital version;

“eligible group of works” for a taxation year means property that is a group of works in respect of which the corporation holds, for the year, a favourable advance ruling given or a certificate issued by the Société de développement des entreprises culturelles for the purposes of this division;

“eligible individual”, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out work relating to the property that is eligible preparation work, eligible printing work, eligible reprinting work or eligible publishing work concerning an eligible digital version;

“eligible preparation work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to publishing the property, from the initial stage to the stage preceding the production in print form of the eligible work or works that are part of the eligible group of works, including editing, design, research, art work, mock-up production, layout, typesetting and pre-press work;

“eligible printing work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to printing the property, which include the first printing of the eligible work or works that are part of the eligible group of works, first assembly and first binding;

“eligible publishing work concerning an eligible digital version” relating to a property that is an eligible work or an eligible group of works means the work performed to carry out the publishing stages of the eligible digital version of the work or of a work that is part of the group of works, including the conversion, production of metadata, indexing, previewing, stocking, destocking, quality control and filing of the work in a digital warehouse;

“eligible reprinting work” in relation to an eligible work or a work that is part of an eligible group of works means the work to carry out the various stages related to reprinting the work;

“eligible work” for a taxation year means property that is a work published by a corporation, in respect of which the corporation holds, for the year, a favourable advance ruling or a certificate given or issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division;

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

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

(a.1)  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; 

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

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

“labour expenditure attributable to preparation costs and digital version publishing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth and fifth paragraphs, the aggregate of 

(a)  the salaries or wages directly attributable to the preparation of the property or the publishing of an eligible digital version relating to the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible preparation work relating to the property or for eligible publishing work concerning an eligible digital version and relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the non-refundable advances directly attributable to the preparation of the property or the publishing of an eligible digital version relating to the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the non-refundable advances that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that are paid by the corporation to a Québec author or a holder of the rights of a Québec author, except such advances paid to a Québec author or a holder of the rights of a Québec author for the acquisition of rights on the existing material;

(c)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible preparation work relating to the property or for eligible publishing work concerning an eligible digital version and relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of the eligible digital version of that work, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the preparation of the work or the publishing of its eligible digital version,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of its eligible digital version,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of its eligible digital version, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of the eligible digital version of that work, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the preparation of the work or with the publishing of its eligible digital version; and

(d)  half of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, half of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible preparation work or for eligible publishing work concerning an eligible digital version by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the third and fourth paragraphs, the aggregate of

(a)  the salaries or wages directly attributable to the printing of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible printing work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(a.1)  the salaries or wages directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they are incurred within the time specified in subparagraph i of subparagraph c of the fourth paragraph and relate to services rendered in Québec for eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation to its eligible employees;

(b)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees as part of the printing or reprinting of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees as part of the printing or reprinting of the work; and

(c)  one-third of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, one-third of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“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 book publishing business, that is a qualified business, and that, for the year, is a publishing house recognized by the Société de développement des entreprises culturelles;

“qualified labour expenditure attributable to preparation costs and digital version publishing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to preparation costs and digital version publishing costs 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 c of the fifth 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the preparation of the property or to the publishing of a digital version of the property, up to 20/7 of the tax under Part III.1.0.5 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 attributable to preparation costs and digital version publishing costs 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 attributable to preparation costs and digital version publishing costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 20/7 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, because of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, 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, in connection with a labour expenditure attributable to preparation costs and digital version publishing costs 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 c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs and digital version publishing costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to preparation costs and digital version publishing costs 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 ii of subparagraph c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs and digital version publishing costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph c of the definition of “labour expenditure attributable to preparation costs and digital version publishing costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the fifth paragraph, reduced the labour expenditure attributable to preparation costs and digital version publishing costs of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  65% of the amount by which the aggregate of the preparation costs directly attributable to the preparation of the property and the digital version publishing costs directly attributable to the publishing of an eligible digital version relating to the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the preparation of the property or the publishing of a digital version of the property for a taxation year preceding the year exceeds 20/7 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the preparation of the property or the publishing of a digital version of the property, for a taxation year preceding the year;

“qualified labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the printing and reprinting costs 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 c of the third 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the printing and reprinting of the property, up to 20/7 of the tax under Part III.1.0.5 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 attributable to the printing and reprinting costs 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 attributable to the printing and reprinting costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 20/7 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the printing and reprinting costs 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 c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to the printing and reprinting costs 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 ii of subparagraph c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular 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 attributable to printing and reprinting costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the third paragraph, reduced the labour expenditure attributable to printing and reprinting costs of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  33 1/3% of the amount by which the aggregate of the printing costs directly attributable to the printing of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or of the last work that is part of the eligible group of works is completed 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 fourth paragraph and the reprinting costs directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that the corporation incurred before the end of the year and within the time specified in subparagraph i of subparagraph c of the fourth paragraph to the extent that they relate to eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the printing and reprinting of the property for a taxation year preceding the year exceeds 20/7 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the printing and reprinting of the property, for a taxation year preceding the year;

“Québec author” means an individual who is an author or an individual who is the editor of an eligible work or a work that is part of an eligible group of works written by a team of contributors, and who was resident in Québec at the end of the calendar year preceding the calendar year in which the publishing work began, or was resident in Québec for at least five consecutive years prior to the beginning of the publishing work;

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

For the purposes of this section, the initial stage of publishing, in relation to an eligible work or an eligible group of works, means the date specified for that purpose in the favourable advance ruling given or the certificate issued by the Société de développement des entreprises culturelles, in relation to that work or group of works, for the purposes of this division.

For the purposes of the definition of “labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the printing of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the printing 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 printing of the property;

(a.1)  for the purposes of paragraph a.1 of the definition, the salaries or wages directly attributable to the reprinting of an eligible work or of a work that is part of an eligible group of works are, where an employee directly undertakes, supervises or supports the reprinting of the work, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the reprinting of the work;

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

(c)  the amount of the labour expenditure attributable to printing and reprinting costs 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 to the salaries or wages described in paragraph a or a.1 of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition or to the consideration or the portion of the consideration described in paragraph c of that definition, that are included in that labour expenditure attributable to printing and reprinting costs 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, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure attributable to printing and reprinting costs for the year in respect of a property is deemed to be null.

For the purposes of the definitions of “labour expenditure attributable to preparation costs and digital version publishing costs”, “labour expenditure attributable to printing and reprinting costs”, “qualified labour expenditure attributable to preparation costs and digital version publishing costs” and “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed;

(b)  an expenditure that would, but for this subparagraph, be a labour expenditure attributable to printing and reprinting costs of a corporation for a particular taxation year in respect of a property that is an eligible work or an eligible group of works or a labour expenditure attributable to preparation costs and digital version publishing costs for the particular year in respect of the property or would constitute printing and reprinting costs directly attributable to the printing and reprinting of the property, preparation costs directly attributable to the preparation of the property or digital version publishing costs directly attributable to the publishing of an eligible digital version relating to the 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 1029.8.36.0.0.14 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)  no expenditure that relates to eligible reprinting work in relation to an eligible work or a work that is part of an eligible group of works may be taken into consideration in computing a labour expenditure attributable to printing and reprinting costs for a taxation year in respect of the eligible work or the eligible group of works, or printing and reprinting costs directly attributable to the printing and reprinting of the eligible work or the eligible group of works incurred before the end of the year, unless

i.  the expenditure is incurred, in respect of the eligible work or of the work that is part of the eligible group of works, on or before the day that is 36 months after the day on which the first printing of the work is completed, and

ii.  the Société de développement des entreprises culturelles notifies the Minister that the eligible reprinting work relating to the work began after 22 June 2009.

For the purposes of the definition of “labour expenditure attributable to preparation costs and digital version publishing costs” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the preparation of a property that is an eligible work or an eligible group of works or to the publishing of an eligible digital version relating to the property are, where an employee undertakes, supervises or directly supports the preparation of the property or the publishing of the eligible digital version, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the preparation of the property or to the publishing of the eligible digital version relating to the property;

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

(c)  the amount of the labour expenditure attributable to preparation costs and digital version publishing costs of a corporation for a taxation year in respect of a property is to be reduced, if applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds to the salaries or wages described in paragraph a of that definition, to the advances described in paragraph b of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph c of that definition or to the consideration or the portion of the consideration described in paragraph d of that definition, that are included in that labour expenditure attributable to preparation costs and digital version publishing costs 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 c of that definition, the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure attributable to preparation costs and digital version publishing costs for the year in respect of a property is deemed to be null.

For the purposes of this division, the printing and reprinting costs directly attributable to the printing and reprinting of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the printing costs, other than publishing fees and administration costs, incurred by the corporation for the first printing of the eligible work or of works that are part of the eligible group of works, the first assembly and the first binding;

(a.1)  the reprinting costs, other than publishing fees and administration costs, incurred by the corporation as part of the reprinting of the eligible work or of a work that is part of the eligible group of works; and

(b)   the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the printing or reprinting of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the printing or reprinting of the property.

For the purposes of this division, the preparation costs directly attributable to the preparation of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the preparation costs, other than publishing fees and administration costs, including non-refundable advances paid to the author or authors, editing, design, research, art work, mock-up production, layout, typesetting and pre-press costs;

(b)  the publishing fees and administration costs pertaining to the property; and

(c)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the preparation of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the preparation of the property.

For the purposes of this division, the digital version publishing costs directly attributable to the publishing of an eligible digital version relating to a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the digital version publishing costs, other than publishing fees and administration costs, incurred by the corporation to carry out the publishing stages of the eligible digital version of the work or of a work that is part of the group of works, including the conversion, production of metadata, indexing, previewing, stocking, destocking, quality control and filing of the work in a digital warehouse; and

(b)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the publishing of the eligible digital version of the eligible work or of a work that is part of the eligible group of works, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the publishing of the eligible digital version of the work.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the third paragraph, a labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property, or

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, a qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property;

iii.  (subparagraph repealed);

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

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

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the fifth paragraph, a labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the property, or

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” in the first paragraph, a qualified labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the property;

iii.  (subparagraph repealed);

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

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

Where the definition of “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph applies in respect of a property (other than a property described in subparagraph a.3 of the first paragraph of section 1029.8.36.0.0.14), it is to be read, in respect of the property, as if “20/7” were replaced wherever it appears by

(a)  “100/26.25”, if the property is referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.14;

(a.1)  “100/27”, if the property is referred to in subparagraph a.1 of the first paragraph of section 1029.8.36.0.0.14;

(b)  “100/21.6”, if the property is referred to in subparagraph a.2 of the first paragraph of section 1029.8.36.0.0.14; or

(c)  “10/3”, if the property is referred to in subparagraph b of the first paragraph of section 1029.8.36.0.0.14.

Where the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” in the first paragraph applies in respect of a property (other than a property described in subparagraph a.3 of the first paragraph of section 1029.8.36.0.0.14), it is to be read, in respect of the property,

(a)  as if “20/7” were replaced wherever it appears by

i.  “20/7”, if the property is referred to in subparagraph a or a.1 of the first paragraph of section 1029.8.36.0.0.14,

ii.  “25/7”, if the property is referred to in subparagraph a.2 of the first paragraph of section 1029.8.36.0.0.14, or

iii.  “5/2”, if the property is referred to in subparagraph b of the first paragraph of section 1029.8.36.0.0.14; and

(b)  as if “65%” in the portion of subparagraph i of paragraph b before subparagraph 1 were replaced by “50%”.

2001, c. 51, s. 117; 2002, c. 9, s. 65; 2003, c. 9, s. 210; 2004, c. 21, s. 317; 2005, c. 23, s. 160; 2005, c. 38, s. 246; 2006, c. 13, s. 117; 2006, c. 36, s. 131; 2007, c. 12, s. 158; 2010, c. 5, s. 155; 2010, c. 25, s. 133; 2011, c. 1, s. 68; 2011, c. 34, s. 75; 2013, c. 10, s. 111; 2015, c. 21, s. 427; 2015, c. 36, s. 115; 2019, c. 14, s. 329; 2024, c. 11, s. 108.

2019-06-19

1029.8.36.0.0.13. In this division,

“eligible digital version” of an eligible work or a work that is part of an eligible group of works published by a corporation means a digital version of that work in respect of which the Société de développement des entreprises culturelles specifies in the favourable advance ruling given or the certificate issued to the corporation in respect of the eligible work or eligible group of works, for the purposes of this division, that the digital version is an eligible digital version of the work or of the work that is part of the group of works;

“eligible employee” of an individual, a corporation or a partnership, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out work relating to the property that is eligible preparation work, eligible printing work, eligible reprinting work or eligible publishing work concerning an eligible digital version;

“eligible group of works” for a taxation year means property that is a group of works in respect of which the corporation holds, for the year, a favourable advance ruling given or a certificate issued by the Société de développement des entreprises culturelles for the purposes of this division;

“eligible individual”, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out work relating to the property that is eligible preparation work, eligible printing work, eligible reprinting work or eligible publishing work concerning an eligible digital version;

“eligible preparation work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to publishing the property, from the initial stage to the stage preceding the production in print form of the eligible work or works that are part of the eligible group of works, including editing, design, research, art work, mock-up production, layout, typesetting and pre-press work;

“eligible printing work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to printing the property, which include the first printing of the eligible work or works that are part of the eligible group of works, first assembly and first binding;

“eligible publishing work concerning an eligible digital version” relating to a property that is an eligible work or an eligible group of works means the work performed to carry out the publishing stages of the eligible digital version of the work or of a work that is part of the group of works, including the conversion, production of metadata, indexing, previewing, stocking, destocking, quality control and filing of the work in a digital warehouse;

“eligible reprinting work” in relation to an eligible work or a work that is part of an eligible group of works means the work to carry out the various stages related to reprinting the work;

“eligible work” for a taxation year means property that is a work published by a corporation, in respect of which the corporation holds, for the year, a favourable advance ruling or a certificate given or issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division;

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

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

(a.1)  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; 

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

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

“labour expenditure attributable to preparation costs and digital version publishing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth and fifth paragraphs, the aggregate of 

(a)  the salaries or wages directly attributable to the preparation of the property or the publishing of an eligible digital version relating to the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible preparation work relating to the property or for eligible publishing work concerning an eligible digital version and relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the non-refundable advances directly attributable to the preparation of the property or the publishing of an eligible digital version relating to the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the non-refundable advances that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that are paid by the corporation to a Québec author or a holder of the rights of a Québec author, except such advances paid to a Québec author or a holder of the rights of a Québec author for the acquisition of rights on the existing material;

(c)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible preparation work relating to the property or for eligible publishing work concerning an eligible digital version and relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of the eligible digital version of that work, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the preparation of the work or the publishing of its eligible digital version,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of its eligible digital version,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of its eligible digital version, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of the eligible digital version of that work, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the preparation of the work or with the publishing of its eligible digital version; and

(d)  half of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, half of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible preparation work or for eligible publishing work concerning an eligible digital version by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the third and fourth paragraphs, the aggregate of

(a)  the salaries or wages directly attributable to the printing of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible printing work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(a.1)  the salaries or wages directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they are incurred within the time specified in subparagraph i of subparagraph c of the fourth paragraph and relate to services rendered in Québec for eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation to its eligible employees;

(b)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees as part of the printing or reprinting of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees as part of the printing or reprinting of the work; and

(c)  one-third of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, one-third of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“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 book publishing business, that is a qualified business, and that, for the year, is a publishing house recognized by the Société de développement des entreprises culturelles;

“qualified labour expenditure attributable to preparation costs and digital version publishing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to preparation costs and digital version publishing costs 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 c of the fifth 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the preparation of the property or to the publishing of a digital version of the property, up to 20/7 of the tax under Part III.1.0.5 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 attributable to preparation costs and digital version publishing costs 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 attributable to preparation costs and digital version publishing costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 20/7 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, because of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, 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, in connection with a labour expenditure attributable to preparation costs and digital version publishing costs 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 c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs and digital version publishing costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to preparation costs and digital version publishing costs 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 ii of subparagraph c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs and digital version publishing costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph c of the definition of “labour expenditure attributable to preparation costs and digital version publishing costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the fifth paragraph, reduced the labour expenditure attributable to preparation costs and digital version publishing costs 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 aggregate of the preparation costs directly attributable to the preparation of the property and the digital version publishing costs directly attributable to the publishing of an eligible digital version relating to the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the preparation of the property or the publishing of a digital version of the property for a taxation year preceding the year exceeds 20/7 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the preparation of the property or the publishing of a digital version of the property, for a taxation year preceding the year;

“qualified labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the printing and reprinting costs 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 c of the third 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the printing and reprinting of the property, up to 100/27 of the tax under Part III.1.0.5 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 attributable to the printing and reprinting costs 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 attributable to the printing and reprinting costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 100/27 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the printing and reprinting costs 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 c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to the printing and reprinting costs 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 ii of subparagraph c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular 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 attributable to printing and reprinting costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the third paragraph, reduced the labour expenditure attributable to printing and reprinting costs of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  33 1/3% of the amount by which the aggregate of the printing costs directly attributable to the printing of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or of the last work that is part of the eligible group of works is completed 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 fourth paragraph and the reprinting costs directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that the corporation incurred before the end of the year and within the time specified in subparagraph i of subparagraph c of the fourth paragraph to the extent that they relate to eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the printing and reprinting of the property for a taxation year preceding the year exceeds 100/27 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the printing and reprinting of the property, for a taxation year preceding the year;

“Québec author” means an individual who is an author or an individual who is the editor of an eligible work or a work that is part of an eligible group of works written by a team of contributors, and who was resident in Québec at the end of the calendar year preceding the calendar year in which the publishing work began, or was resident in Québec for at least five consecutive years prior to the beginning of the publishing work;

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

For the purposes of this section, the initial stage of publishing, in relation to an eligible work or an eligible group of works, means the date specified for that purpose in the favourable advance ruling given or the certificate issued by the Société de développement des entreprises culturelles, in relation to that work or group of works, for the purposes of this division.

For the purposes of the definition of “labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the printing of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the printing 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 printing of the property;

(a.1)  for the purposes of paragraph a.1 of the definition, the salaries or wages directly attributable to the reprinting of an eligible work or of a work that is part of an eligible group of works are, where an employee directly undertakes, supervises or supports the reprinting of the work, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the reprinting of the work;

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

(c)  the amount of the labour expenditure attributable to printing and reprinting costs 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 to the salaries or wages described in paragraph a or a.1 of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition or to the consideration or the portion of the consideration described in paragraph c of that definition, that are included in that labour expenditure attributable to printing and reprinting costs 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, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure attributable to printing and reprinting costs for the year in respect of a property is deemed to be null.

For the purposes of the definitions of “labour expenditure attributable to preparation costs and digital version publishing costs”, “labour expenditure attributable to printing and reprinting costs”, “qualified labour expenditure attributable to preparation costs and digital version publishing costs” and “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed;

(b)  an expenditure that would, but for this subparagraph, be a labour expenditure attributable to printing and reprinting costs of a corporation for a particular taxation year in respect of a property that is an eligible work or an eligible group of works or a labour expenditure attributable to preparation costs and digital version publishing costs for the particular year in respect of the property or would constitute printing and reprinting costs directly attributable to the printing and reprinting of the property, preparation costs directly attributable to the preparation of the property or digital version publishing costs directly attributable to the publishing of an eligible digital version relating to the 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 1029.8.36.0.0.14 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)  no expenditure that relates to eligible reprinting work in relation to an eligible work or a work that is part of an eligible group of works may be taken into consideration in computing a labour expenditure attributable to printing and reprinting costs for a taxation year in respect of the eligible work or the eligible group of works, or printing and reprinting costs directly attributable to the printing and reprinting of the eligible work or the eligible group of works incurred before the end of the year, unless

i.  the expenditure is incurred, in respect of the eligible work or of the work that is part of the eligible group of works, on or before the day that is 36 months after the day on which the first printing of the work is completed, and

ii.  the Société de développement des entreprises culturelles notifies the Minister that the eligible reprinting work relating to the work began after 22 June 2009.

For the purposes of the definition of “labour expenditure attributable to preparation costs and digital version publishing costs” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the preparation of a property that is an eligible work or an eligible group of works or to the publishing of an eligible digital version relating to the property are, where an employee undertakes, supervises or directly supports the preparation of the property or the publishing of the eligible digital version, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the preparation of the property or to the publishing of the eligible digital version relating to the property;

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

(c)  the amount of the labour expenditure attributable to preparation costs and digital version publishing costs of a corporation for a taxation year in respect of a property is to be reduced, if applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds to the salaries or wages described in paragraph a of that definition, to the advances described in paragraph b of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph c of that definition or to the consideration or the portion of the consideration described in paragraph d of that definition, that are included in that labour expenditure attributable to preparation costs and digital version publishing costs 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 c of that definition, the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure attributable to preparation costs and digital version publishing costs for the year in respect of a property is deemed to be null.

For the purposes of this division, the printing and reprinting costs directly attributable to the printing and reprinting of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the printing costs, other than publishing fees and administration costs, incurred by the corporation for the first printing of the eligible work or of works that are part of the eligible group of works, the first assembly and the first binding;

(a.1)  the reprinting costs, other than publishing fees and administration costs, incurred by the corporation as part of the reprinting of the eligible work or of a work that is part of the eligible group of works; and

(b)   the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the printing or reprinting of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the printing or reprinting of the property.

For the purposes of this division, the preparation costs directly attributable to the preparation of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the preparation costs, other than publishing fees and administration costs, including non-refundable advances paid to the author or authors, editing, design, research, art work, mock-up production, layout, typesetting and pre-press costs;

(b)  the publishing fees and administration costs pertaining to the property; and

(c)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the preparation of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the preparation of the property.

For the purposes of this division, the digital version publishing costs directly attributable to the publishing of an eligible digital version relating to a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the digital version publishing costs, other than publishing fees and administration costs, incurred by the corporation to carry out the publishing stages of the eligible digital version of the work or of a work that is part of the group of works, including the conversion, production of metadata, indexing, previewing, stocking, destocking, quality control and filing of the work in a digital warehouse; and

(b)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the publishing of the eligible digital version of the eligible work or of a work that is part of the eligible group of works, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the publishing of the eligible digital version of the work.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the third paragraph, a labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property, or

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, a qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property;

iii.  (subparagraph repealed);

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

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

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the fifth paragraph, a labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the property, or

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” in the first paragraph, a qualified labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the property;

iii.  (subparagraph repealed);

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

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

Where the definitions of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” and “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph apply in respect of a property (other than a property described in subparagraph a.1 of the first paragraph of section 1029.8.36.0.0.14), they are to be read, in respect of the property, as if “100/27” and “20/7” were replaced wherever they appear by

(a)  “100/26.25” and “20/7”, respectively, if the property is referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.14;

(b)  “100/21.6” and “25/7”, respectively, if the property is referred to in subparagraph a.2 of the first paragraph of section 1029.8.36.0.0.14; and

(c)  “10/3” and “5/2”, respectively, if the property is referred to in subparagraph b of the first paragraph of section 1029.8.36.0.0.14.

2001, c. 51, s. 117; 2002, c. 9, s. 65; 2003, c. 9, s. 210; 2004, c. 21, s. 317; 2005, c. 23, s. 160; 2005, c. 38, s. 246; 2006, c. 13, s. 117; 2006, c. 36, s. 131; 2007, c. 12, s. 158; 2010, c. 5, s. 155; 2010, c. 25, s. 133; 2011, c. 1, s. 68; 2011, c. 34, s. 75; 2013, c. 10, s. 111; 2015, c. 21, s. 427; 2015, c. 36, s. 115; 2019, c. 14, s. 329.

2015-12-04

1029.8.36.0.0.13. In this division,

“eligible digital version” of an eligible work or a work that is part of an eligible group of works published by a corporation means a digital version of that work in respect of which the Société de développement des entreprises culturelles specifies in the favourable advance ruling given or the certificate issued to the corporation in respect of the eligible work or eligible group of works, for the purposes of this division, that the digital version is an eligible digital version of the work or of the work that is part of the group of works;

“eligible employee” of an individual, a corporation or a partnership, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out work relating to the property that is eligible preparation work, eligible printing work, eligible reprinting work or eligible publishing work concerning an eligible digital version;

“eligible group of works” for a taxation year means property that is a group of works in respect of which the corporation holds, for the year, a favourable advance ruling given or a certificate issued by the Société de développement des entreprises culturelles for the purposes of this division;

“eligible individual”, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out work relating to the property that is eligible preparation work, eligible printing work, eligible reprinting work or eligible publishing work concerning an eligible digital version;

“eligible preparation work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to publishing the property, from the initial stage to the stage preceding the production in print form of the eligible work or works that are part of the eligible group of works, including editing, design, research, art work, mock-up production, layout, typesetting and pre-press work;

“eligible printing work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to printing the property, which include the first printing of the eligible work or works that are part of the eligible group of works, first assembly and first binding;

“eligible publishing work concerning an eligible digital version” relating to a property that is an eligible work or an eligible group of works means the work performed to carry out the publishing stages of the eligible digital version of the work or of a work that is part of the group of works, including the conversion, production of metadata, indexing, previewing, stocking, destocking, quality control and filing of the work in a digital warehouse;

“eligible reprinting work” in relation to an eligible work or a work that is part of an eligible group of works means the work to carry out the various stages related to reprinting the work;

“eligible work” for a taxation year means property that is a work published by a corporation, in respect of which the corporation holds, for the year, a favourable advance ruling or a certificate given or issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division;

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

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

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

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

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

“labour expenditure attributable to preparation costs and digital version publishing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth and fifth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the preparation of the property or the publishing of an eligible digital version relating to the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible preparation work relating to the property or for eligible publishing work concerning an eligible digital version and relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the non-refundable advances directly attributable to the preparation of the property or the publishing of an eligible digital version relating to the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the non-refundable advances that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that are paid by the corporation to a Québec author or a holder of the rights of a Québec author, except such advances paid to a Québec author or a holder of the rights of a Québec author for the acquisition of rights on the existing material;

(c)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible preparation work relating to the property or for eligible publishing work concerning an eligible digital version and relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of the eligible digital version of that work, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the preparation of the work or the publishing of its eligible digital version,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of its eligible digital version,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of its eligible digital version, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of the eligible digital version of that work, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the preparation of the work or with the publishing of its eligible digital version; and

(d)  half of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, half of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible preparation work or for eligible publishing work concerning an eligible digital version by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the third and fourth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the printing of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible printing work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(a.1)  the salaries or wages directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they are incurred within the time specified in subparagraph i of subparagraph c of the fourth paragraph and relate to services rendered in Québec for eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation to its eligible employees;

(b)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees as part of the printing or reprinting of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees as part of the printing or reprinting of the work; and

(c)  one-third of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, one-third of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“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 book publishing business, that is a qualified business, and that, for the year, is a publishing house recognized by the Société de développement des entreprises culturelles;

“qualified labour expenditure attributable to preparation costs and digital version publishing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to preparation costs and digital version publishing costs 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 c of the fifth 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the preparation of the property or to the publishing of a digital version of the property, up to 20/7 of the tax under Part III.1.0.5 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 attributable to preparation costs and digital version publishing costs 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 attributable to preparation costs and digital version publishing costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 20/7 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, because of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, 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, in connection with a labour expenditure attributable to preparation costs and digital version publishing costs 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 c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs and digital version publishing costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to preparation costs and digital version publishing costs 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 ii of subparagraph c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs and digital version publishing costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph c of the definition of “labour expenditure attributable to preparation costs and digital version publishing costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the fifth paragraph, reduced the labour expenditure attributable to preparation costs and digital version publishing costs 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 aggregate of the preparation costs directly attributable to the preparation of the property and the digital version publishing costs directly attributable to the publishing of an eligible digital version relating to the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the preparation of the property or the publishing of a digital version of the property for a taxation year preceding the year exceeds 20/7 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the preparation of the property or the publishing of a digital version of the property, for a taxation year preceding the year;

“qualified labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the printing and reprinting costs 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 c of the third 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the printing and reprinting of the property, up to 100/27 of the tax under Part III.1.0.5 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 attributable to the printing and reprinting costs 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 attributable to the printing and reprinting costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 100/27 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the printing and reprinting costs 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 c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to the printing and reprinting costs 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 ii of subparagraph c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular 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 attributable to printing and reprinting costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the third paragraph, reduced the labour expenditure attributable to printing and reprinting costs of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  33 1/3% of the amount by which the aggregate of the printing costs directly attributable to the printing of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or of the last work that is part of the eligible group of works is completed 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 fourth paragraph and the reprinting costs directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that the corporation incurred before the end of the year and within the time specified in subparagraph i of subparagraph c of the fourth paragraph to the extent that they relate to eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the printing and reprinting of the property for a taxation year preceding the year exceeds 100/27 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the printing and reprinting of the property, for a taxation year preceding the year;

“Québec author” means an individual who is an author or an individual who is the editor of an eligible work or a work that is part of an eligible group of works written by a team of contributors, and who was resident in Québec at the end of the calendar year preceding the calendar year in which the publishing work began, or was resident in Québec for at least five consecutive years prior to the beginning of the publishing work;

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

For the purposes of this section, the initial stage of publishing, in relation to an eligible work or an eligible group of works, means the date specified for that purpose in the favourable advance ruling given or the certificate issued by the Société de développement des entreprises culturelles, in relation to that work or group of works, for the purposes of this division.

For the purposes of the definition of “labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the printing of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the printing 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 printing of the property;

(a.1)  for the purposes of paragraph a.1 of the definition, the salaries or wages directly attributable to the reprinting of an eligible work or of a work that is part of an eligible group of works are, where an employee directly undertakes, supervises or supports the reprinting of the work, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the reprinting of the work;

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

(c)  the amount of the labour expenditure attributable to printing and reprinting costs 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 to the salaries or wages described in paragraph a or a.1 of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition or to the consideration or the portion of the consideration described in paragraph c of that definition, that are included in that labour expenditure attributable to printing and reprinting costs 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, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure attributable to printing and reprinting costs for the year in respect of a property is deemed to be null.

For the purposes of the definitions of “labour expenditure attributable to preparation costs and digital version publishing costs”, “labour expenditure attributable to printing and reprinting costs”, “qualified labour expenditure attributable to preparation costs and digital version publishing costs” and “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed;

(b)  no expenditure may be taken into consideration in computing a qualified labour expenditure attributable to printing and reprinting costs for a taxation year in respect of a property that is an eligible work or an eligible group of works or a qualified labour expenditure attributable to preparation costs and digital version publishing costs for the year in respect of the property, printing and reprinting costs directly attributable to the printing and reprinting of the property, preparation costs directly attributable to the preparation of the property and digital version publishing costs directly attributable to the publishing of an eligible digital version relating to the property, as the case may be, 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 1029.8.36.0.0.14 for that taxation year; and

(c)  no expenditure that relates to eligible reprinting work in relation to an eligible work or a work that is part of an eligible group of works may be taken into consideration in computing a labour expenditure attributable to printing and reprinting costs for a taxation year in respect of the eligible work or the eligible group of works, or printing and reprinting costs directly attributable to the printing and reprinting of the eligible work or the eligible group of works incurred before the end of the year, unless

i.  the expenditure is incurred, in respect of the eligible work or of the work that is part of the eligible group of works, on or before the day that is 36 months after the day on which the first printing of the work is completed, and

ii.  the Société de développement des entreprises culturelles notifies the Minister that the eligible reprinting work relating to the work began after 22 June 2009.

For the purposes of the definition of “labour expenditure attributable to preparation costs and digital version publishing costs” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the preparation of a property that is an eligible work or an eligible group of works or to the publishing of an eligible digital version relating to the property are, where an employee undertakes, supervises or directly supports the preparation of the property or the publishing of the eligible digital version, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the preparation of the property or to the publishing of the eligible digital version relating to the property;

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

(c)  the amount of the labour expenditure attributable to preparation costs and digital version publishing costs of a corporation for a taxation year in respect of a property is to be reduced, if applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds to the salaries or wages described in paragraph a of that definition, to the advances described in paragraph b of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph c of that definition or to the consideration or the portion of the consideration described in paragraph d of that definition, that are included in that labour expenditure attributable to preparation costs and digital version publishing costs 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 c of that definition, the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure attributable to preparation costs and digital version publishing costs for the year in respect of a property is deemed to be null.

For the purposes of this division, the printing and reprinting costs directly attributable to the printing and reprinting of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the printing costs, other than publishing fees and administration costs, incurred by the corporation for the first printing of the eligible work or of works that are part of the eligible group of works, the first assembly and the first binding;

(a.1)  the reprinting costs, other than publishing fees and administration costs, incurred by the corporation as part of the reprinting of the eligible work or of a work that is part of the eligible group of works; and

(b)   the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the printing or reprinting of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the printing or reprinting of the property.

For the purposes of this division, the preparation costs directly attributable to the preparation of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the preparation costs, other than publishing fees and administration costs, including non-refundable advances paid to the author or authors, editing, design, research, art work, mock-up production, layout, typesetting and pre-press costs;

(b)  the publishing fees and administration costs pertaining to the property that are reasonable in the circumstances; and

(c)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the preparation of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the preparation of the property.

For the purposes of this division, the digital version publishing costs directly attributable to the publishing of an eligible digital version relating to a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the digital version publishing costs, other than publishing fees and administration costs, incurred by the corporation to carry out the publishing stages of the eligible digital version of the work or of a work that is part of the group of works, including the conversion, production of metadata, indexing, previewing, stocking, destocking, quality control and filing of the work in a digital warehouse; and

(b)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the publishing of the eligible digital version of the eligible work or of a work that is part of the eligible group of works, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the publishing of the eligible digital version of the work.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the third paragraph, a labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property, or

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, a qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property;

iii.  (subparagraph repealed);

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

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

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the fifth paragraph, a labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the property, or

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” in the first paragraph, a qualified labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the property;

iii.  (subparagraph repealed);

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

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

Where the definitions of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” and “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph apply in respect of a property (other than a property described in subparagraph a.1 of the first paragraph of section 1029.8.36.0.0.14), they are to be read, in respect of the property, as if “100/27” and “20/7” were replaced wherever they appear by

(a)  “100/26.25” and “20/7”, respectively, if the property is referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.14;

(b)  “100/21.6” and “25/7”, respectively, if the property is referred to in subparagraph a.2 of the first paragraph of section 1029.8.36.0.0.14; and

(c)  “10/3” and “5/2”, respectively, if the property is referred to in subparagraph b of the first paragraph of section 1029.8.36.0.0.14.

2001, c. 51, s. 117; 2002, c. 9, s. 65; 2003, c. 9, s. 210; 2004, c. 21, s. 317; 2005, c. 23, s. 160; 2005, c. 38, s. 246; 2006, c. 13, s. 117; 2006, c. 36, s. 131; 2007, c. 12, s. 158; 2010, c. 5, s. 155; 2010, c. 25, s. 133; 2011, c. 1, s. 68; 2011, c. 34, s. 75; 2013, c. 10, s. 111; 2015, c. 21, s. 427; 2015, c. 36, s. 115.

2015-10-21

1029.8.36.0.0.13. In this division,

“eligible digital version” of an eligible work or a work that is part of an eligible group of works published by a corporation means a digital version of that work in respect of which the Société de développement des entreprises culturelles specifies in the favourable advance ruling given or the certificate issued to the corporation in respect of the eligible work or eligible group of works, for the purposes of this division, that the digital version is an eligible digital version of the work or of the work that is part of the group of works;

“eligible employee” of an individual, a corporation or a partnership, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out work relating to the property that is eligible preparation work, eligible printing work, eligible reprinting work or eligible publishing work concerning an eligible digital version;

“eligible group of works” for a taxation year means property that is a group of works in respect of which the corporation holds, for the year, a favourable advance ruling given or a certificate issued by the Société de développement des entreprises culturelles for the purposes of this division;

“eligible individual”, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out work relating to the property that is eligible preparation work, eligible printing work, eligible reprinting work or eligible publishing work concerning an eligible digital version;

“eligible preparation work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to publishing the property, from the initial stage to the stage preceding the production in print form of the eligible work or works that are part of the eligible group of works, including editing, design, research, art work, mock-up production, layout, typesetting and pre-press work;

“eligible printing work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to printing the property, which include the first printing of the eligible work or works that are part of the eligible group of works, first assembly and first binding;

“eligible publishing work concerning an eligible digital version” relating to a property that is an eligible work or an eligible group of works means the work performed to carry out the publishing stages of the eligible digital version of the work or of a work that is part of the group of works, including the conversion, production of metadata, indexing, previewing, stocking, destocking, quality control and filing of the work in a digital warehouse;

“eligible reprinting work” in relation to an eligible work or a work that is part of an eligible group of works means the work to carry out the various stages related to reprinting the work;

“eligible work” for a taxation year means property that is a work published by a corporation, in respect of which the corporation holds, for the year, a favourable advance ruling or a certificate given or issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division;

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

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

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

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

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

“labour expenditure attributable to preparation costs and digital version publishing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth and fifth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the preparation of the property or the publishing of an eligible digital version relating to the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible preparation work relating to the property or for eligible publishing work concerning an eligible digital version and relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the non-refundable advances directly attributable to the preparation of the property or the publishing of an eligible digital version relating to the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the non-refundable advances that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that are paid by the corporation to a Québec author or a holder of the rights of a Québec author, except such advances paid to a Québec author or a holder of the rights of a Québec author for the acquisition of rights on the existing material;

(c)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible preparation work relating to the property or for eligible publishing work concerning an eligible digital version and relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of the eligible digital version of that work, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the preparation of the work or the publishing of its eligible digital version,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of its eligible digital version,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of its eligible digital version, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of the eligible digital version of that work, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the preparation of the work or with the publishing of its eligible digital version; and

(d)  half of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, half of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible preparation work or for eligible publishing work concerning an eligible digital version by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the third and fourth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the printing of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible printing work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(a.1)  the salaries or wages directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they are incurred within the time specified in subparagraph i of subparagraph c of the fourth paragraph and relate to services rendered in Québec for eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation to its eligible employees;

(b)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees as part of the printing or reprinting of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees as part of the printing or reprinting of the work; and

(c)  one-third of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, one-third of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“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 book publishing business, that is a qualified business, and that, for the year, is a publishing house recognized by the Société de développement des entreprises culturelles;

“qualified labour expenditure attributable to preparation costs and digital version publishing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to preparation costs and digital version publishing costs 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 c of the fifth 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the preparation of the property or to the publishing of a digital version of the property, up to 25/7 of the tax under Part III.1.0.5 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 attributable to preparation costs and digital version publishing costs 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 attributable to preparation costs and digital version publishing costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 25/7 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, because of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, 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, in connection with a labour expenditure attributable to preparation costs and digital version publishing costs 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 c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs and digital version publishing costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to preparation costs and digital version publishing costs 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 ii of subparagraph c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs and digital version publishing costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph c of the definition of “labour expenditure attributable to preparation costs and digital version publishing costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the fifth paragraph, reduced the labour expenditure attributable to preparation costs and digital version publishing costs 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 aggregate of the preparation costs directly attributable to the preparation of the property and the digital version publishing costs directly attributable to the publishing of an eligible digital version relating to the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the preparation of the property or the publishing of a digital version of the property for a taxation year preceding the year exceeds 25/7 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the preparation of the property or the publishing of a digital version of the property, for a taxation year preceding the year;

“qualified labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the printing and reprinting costs 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 c of the third 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the printing and reprinting of the property, up to 100/21.6 of the tax under Part III.1.0.5 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 attributable to the printing and reprinting costs 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 attributable to the printing and reprinting costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 100/21.6 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the printing and reprinting costs 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 c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to the printing and reprinting costs 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 ii of subparagraph c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular 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 attributable to printing and reprinting costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the third paragraph, reduced the labour expenditure attributable to printing and reprinting costs of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  33 1/3% of the amount by which the aggregate of the printing costs directly attributable to the printing of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or of the last work that is part of the eligible group of works is completed 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 fourth paragraph and the reprinting costs directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that the corporation incurred before the end of the year and within the time specified in subparagraph i of subparagraph c of the fourth paragraph to the extent that they relate to eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the printing and reprinting of the property for a taxation year preceding the year exceeds 100/21.6 of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the printing and reprinting of the property, for a taxation year preceding the year;

“Québec author” means an individual who is an author or an individual who is the editor of an eligible work or a work that is part of an eligible group of works written by a team of contributors, and who was resident in Québec at the end of the calendar year preceding the calendar year in which the publishing work began, or was resident in Québec for at least five consecutive years prior to the beginning of the publishing work;

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

For the purposes of this section, the initial stage of publishing, in relation to an eligible work or an eligible group of works, means the date specified for that purpose in the favourable advance ruling given or the certificate issued by the Société de développement des entreprises culturelles, in relation to that work or group of works, for the purposes of this division.

For the purposes of the definition of “labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the printing of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the printing 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 printing of the property;

(a.1)  for the purposes of paragraph a.1 of the definition, the salaries or wages directly attributable to the reprinting of an eligible work or of a work that is part of an eligible group of works are, where an employee directly undertakes, supervises or supports the reprinting of the work, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the reprinting of the work;

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

(c)  the amount of the labour expenditure attributable to printing and reprinting costs 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 to the salaries or wages described in paragraph a or a.1 of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition or to the consideration or the portion of the consideration described in paragraph c of that definition, that are included in that labour expenditure attributable to printing and reprinting costs 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, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure attributable to printing and reprinting costs for the year in respect of a property is deemed to be null.

For the purposes of the definitions of “labour expenditure attributable to preparation costs and digital version publishing costs”, “labour expenditure attributable to printing and reprinting costs”, “qualified labour expenditure attributable to preparation costs and digital version publishing costs” and “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed;

(b)  no expenditure may be taken into consideration in computing a qualified labour expenditure attributable to printing and reprinting costs for a taxation year in respect of a property that is an eligible work or an eligible group of works or a qualified labour expenditure attributable to preparation costs and digital version publishing costs for the year in respect of the property, printing and reprinting costs directly attributable to the printing and reprinting of the property, preparation costs directly attributable to the preparation of the property and digital version publishing costs directly attributable to the publishing of an eligible digital version relating to the property, as the case may be, 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 1029.8.36.0.0.14 for that taxation year; and

(c)  no expenditure that relates to eligible reprinting work in relation to an eligible work or a work that is part of an eligible group of works may be taken into consideration in computing a labour expenditure attributable to printing and reprinting costs for a taxation year in respect of the eligible work or the eligible group of works, or printing and reprinting costs directly attributable to the printing and reprinting of the eligible work or the eligible group of works incurred before the end of the year, unless

i.  the expenditure is incurred, in respect of the eligible work or of the work that is part of the eligible group of works, on or before the day that is 36 months after the day on which the first printing of the work is completed, and

ii.  the Société de développement des entreprises culturelles notifies the Minister that the eligible reprinting work relating to the work began after 22 June 2009.

For the purposes of the definition of “labour expenditure attributable to preparation costs and digital version publishing costs” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the preparation of a property that is an eligible work or an eligible group of works or to the publishing of an eligible digital version relating to the property are, where an employee undertakes, supervises or directly supports the preparation of the property or the publishing of the eligible digital version, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the preparation of the property or to the publishing of the eligible digital version relating to the property;

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

(c)  the amount of the labour expenditure attributable to preparation costs and digital version publishing costs of a corporation for a taxation year in respect of a property is to be reduced, if applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds to the salaries or wages described in paragraph a of that definition, to the advances described in paragraph b of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph c of that definition or to the consideration or the portion of the consideration described in paragraph d of that definition, that are included in that labour expenditure attributable to preparation costs and digital version publishing costs 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 c of that definition, the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure attributable to preparation costs and digital version publishing costs for the year in respect of a property is deemed to be null.

For the purposes of this division, the printing and reprinting costs directly attributable to the printing and reprinting of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the printing costs, other than publishing fees and administration costs, incurred by the corporation for the first printing of the eligible work or of works that are part of the eligible group of works, the first assembly and the first binding;

(a.1)  the reprinting costs, other than publishing fees and administration costs, incurred by the corporation as part of the reprinting of the eligible work or of a work that is part of the eligible group of works; and

(b)   the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the printing or reprinting of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the printing or reprinting of the property.

For the purposes of this division, the preparation costs directly attributable to the preparation of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the preparation costs, other than publishing fees and administration costs, including non-refundable advances paid to the author or authors, editing, design, research, art work, mock-up production, layout, typesetting and pre-press costs;

(b)  the publishing fees and administration costs pertaining to the property that are reasonable in the circumstances; and

(c)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the preparation of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the preparation of the property.

For the purposes of this division, the digital version publishing costs directly attributable to the publishing of an eligible digital version relating to a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the digital version publishing costs, other than publishing fees and administration costs, incurred by the corporation to carry out the publishing stages of the eligible digital version of the work or of a work that is part of the group of works, including the conversion, production of metadata, indexing, previewing, stocking, destocking, quality control and filing of the work in a digital warehouse; and

(b)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the publishing of the eligible digital version of the eligible work or of a work that is part of the eligible group of works, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the publishing of the eligible digital version of the work.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the third paragraph, a labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property, or

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, a qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property;

iii.  (subparagraph repealed);

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

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

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the fifth paragraph, a labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the property, or

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” in the first paragraph, a qualified labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the property;

iii.  (subparagraph repealed);

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

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

Where the definitions of “qualified labour expenditure attributable to printing and reprinting costs” and “qualified labour expenditure attributable to preparation costs and digital version publishing costs” in the first paragraph apply 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, they are to be read, in respect of the property, as if “100/21.6” and “25/7” were replaced wherever they appear by

(a)  “100/26.25” and “20/7”, respectively, if the property is referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.14;

(b)  “100/27” and “20/7”, respectively, if the property is referred to in subparagraph a.1 of the first paragraph of section 1029.8.36.0.0.14; and

(c)  “10/3” and “5/2”, respectively, if the property is referred to in subparagraph b of the first paragraph of section 1029.8.36.0.0.14.

2001, c. 51, s. 117; 2002, c. 9, s. 65; 2003, c. 9, s. 210; 2004, c. 21, s. 317; 2005, c. 23, s. 160; 2005, c. 38, s. 246; 2006, c. 13, s. 117; 2006, c. 36, s. 131; 2007, c. 12, s. 158; 2010, c. 5, s. 155; 2010, c. 25, s. 133; 2011, c. 1, s. 68; 2011, c. 34, s. 75; 2013, c. 10, s. 111; 2015, c. 21, s. 427.

2013-06-05

1029.8.36.0.0.13. In this division,

“eligible digital version” of an eligible work or a work that is part of an eligible group of works published by a corporation means a digital version of that work in respect of which the Société de développement des entreprises culturelles specifies in the favourable advance ruling given or the certificate issued to the corporation in respect of the eligible work or eligible group of works, for the purposes of this division, that the digital version is an eligible digital version of the work or of the work that is part of the group of works;

“eligible employee” of an individual, a corporation or a partnership, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out work relating to the property that is eligible preparation work, eligible printing work, eligible reprinting work or eligible publishing work concerning an eligible digital version;

“eligible group of works” for a taxation year means property that is a group of works in respect of which the corporation holds, for the year, a favourable advance ruling given or a certificate issued by the Société de développement des entreprises culturelles for the purposes of this division;

“eligible individual”, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out work relating to the property that is eligible preparation work, eligible printing work, eligible reprinting work or eligible publishing work concerning an eligible digital version;

“eligible preparation work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to publishing the property, from the initial stage to the stage preceding the production in print form of the eligible work or works that are part of the eligible group of works, including editing, design, research, art work, mock-up production, layout, typesetting and pre-press work;

“eligible printing work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to printing the property, which include the first printing of the eligible work or works that are part of the eligible group of works, first assembly and first binding;

“eligible publishing work concerning an eligible digital version” relating to a property that is an eligible work or an eligible group of works means the work performed to carry out the publishing stages of the eligible digital version of the work or of a work that is part of the group of works, including the conversion, production of metadata, indexing, previewing, stocking, destocking, quality control and filing of the work in a digital warehouse;

“eligible reprinting work” in relation to an eligible work or a work that is part of an eligible group of works means the work to carry out the various stages related to reprinting the work;

“eligible work” for a taxation year means property that is a work published by a corporation, in respect of which the corporation holds, for the year, a favourable advance ruling or a certificate given or issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division;

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

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

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

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

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

“labour expenditure attributable to preparation costs and digital version publishing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth and fifth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the preparation of the property or the publishing of an eligible digital version relating to the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible preparation work relating to the property or for eligible publishing work concerning an eligible digital version and relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the non-refundable advances directly attributable to the preparation of the property or the publishing of an eligible digital version relating to the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the non-refundable advances that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that are paid by the corporation to a Québec author or a holder of the rights of a Québec author, except such advances paid to a Québec author or a holder of the rights of a Québec author for the acquisition of rights on the existing material;

(c)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible preparation work relating to the property or for eligible publishing work concerning an eligible digital version and relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of the eligible digital version of that work, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the preparation of the work or the publishing of its eligible digital version,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of its eligible digital version,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of its eligible digital version, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of the eligible digital version of that work, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the preparation of the work or with the publishing of its eligible digital version; and

(d)  half of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, half of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible preparation work or for eligible publishing work concerning an eligible digital version by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the third and fourth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the printing of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible printing work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(a.1)  the salaries or wages directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they are incurred within the time specified in subparagraph i of subparagraph c of the fourth paragraph and relate to services rendered in Québec for eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation to its eligible employees;

(b)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees as part of the printing or reprinting of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees as part of the printing or reprinting of the work; and

(c)  one-third of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, one-third of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“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 book publishing business, that is a qualified business, and that, for the year, is a publishing house recognized by the Société de développement des entreprises culturelles;

“qualified labour expenditure attributable to preparation costs and digital version publishing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to preparation costs and digital version publishing costs 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 c of the fifth 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the preparation of the property or to the publishing of a digital version of the property, up to 250% of the tax under Part III.1.0.5 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 attributable to preparation costs and digital version publishing costs 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 attributable to preparation costs and digital version publishing costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, because of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, 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, in connection with a labour expenditure attributable to preparation costs and digital version publishing costs 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 c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs and digital version publishing costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to preparation costs and digital version publishing costs 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 ii of subparagraph c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs and digital version publishing costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph c of the definition of “labour expenditure attributable to preparation costs and digital version publishing costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the fifth paragraph, reduced the labour expenditure attributable to preparation costs and digital version publishing costs 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 aggregate of the preparation costs directly attributable to the preparation of the property and the digital version publishing costs directly attributable to the publishing of an eligible digital version relating to the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the preparation of the property or the publishing of a digital version of the property for a taxation year preceding the year exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the preparation of the property or the publishing of a digital version of the property, for a taxation year preceding the year;

“qualified labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the printing and reprinting costs 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 c of the third 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the printing and reprinting of the property, up to 333 1/3% of the tax under Part III.1.0.5 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 attributable to the printing and reprinting costs 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 attributable to the printing and reprinting costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 333 1/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the printing and reprinting costs 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 c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to the printing and reprinting costs 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 ii of subparagraph c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular 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 attributable to printing and reprinting costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the third paragraph, reduced the labour expenditure attributable to printing and reprinting costs of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  33 1/3% of the amount by which the aggregate of the printing costs directly attributable to the printing of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or of the last work that is part of the eligible group of works is completed 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 fourth paragraph and the reprinting costs directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that the corporation incurred before the end of the year and within the time specified in subparagraph i of subparagraph c of the fourth paragraph to the extent that they relate to eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the printing and reprinting of the property for a taxation year preceding the year exceeds 333 1/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the printing and reprinting of the property, for a taxation year preceding the year;

“Québec author” means an individual who is an author or an individual who is the editor of an eligible work or a work that is part of an eligible group of works written by a team of contributors, and who was resident in Québec at the end of the calendar year preceding the calendar year in which the publishing work began, or was resident in Québec for at least five consecutive years prior to the beginning of the publishing work;

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

For the purposes of this section, the initial stage of publishing, in relation to an eligible work or an eligible group of works, means the date specified for that purpose in the favourable advance ruling given or the certificate issued by the Société de développement des entreprises culturelles, in relation to that work or group of works, for the purposes of this division.

For the purposes of the definition of “labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the printing of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the printing 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 printing of the property;

(a.1)  for the purposes of paragraph a.1 of the definition, the salaries or wages directly attributable to the reprinting of an eligible work or of a work that is part of an eligible group of works are, where an employee directly undertakes, supervises or supports the reprinting of the work, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the reprinting of the work;

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

(c)  the amount of the labour expenditure attributable to printing and reprinting costs 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 to the salaries or wages described in paragraph a or a.1 of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition or to the consideration or the portion of the consideration described in paragraph c of that definition, that are included in that labour expenditure attributable to printing and reprinting costs 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, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure attributable to printing and reprinting costs for the year in respect of a property is deemed to be null.

For the purposes of the definitions of “labour expenditure attributable to preparation costs and digital version publishing costs”, “labour expenditure attributable to printing and reprinting costs”, “qualified labour expenditure attributable to preparation costs and digital version publishing costs” and “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed;

(b)  no expenditure may be taken into consideration in computing a qualified labour expenditure attributable to printing and reprinting costs for a taxation year in respect of a property that is an eligible work or an eligible group of works or a qualified labour expenditure attributable to preparation costs and digital version publishing costs for the year in respect of the property, printing and reprinting costs directly attributable to the printing and reprinting of the property, preparation costs directly attributable to the preparation of the property and digital version publishing costs directly attributable to the publishing of an eligible digital version relating to the property, as the case may be, 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 1029.8.36.0.0.14 for that taxation year; and

(c)  no expenditure that relates to eligible reprinting work in relation to an eligible work or a work that is part of an eligible group of works may be taken into consideration in computing a labour expenditure attributable to printing and reprinting costs for a taxation year in respect of the eligible work or the eligible group of works, or printing and reprinting costs directly attributable to the printing and reprinting of the eligible work or the eligible group of works incurred before the end of the year, unless

i.  the expenditure is incurred, in respect of the eligible work or of the work that is part of the eligible group of works, on or before the day that is 36 months after the day on which the first printing of the work is completed, and

ii.  the Société de développement des entreprises culturelles notifies the Minister that the eligible reprinting work relating to the work began after 22 June 2009.

For the purposes of the definition of “labour expenditure attributable to preparation costs and digital version publishing costs” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the preparation of a property that is an eligible work or an eligible group of works or to the publishing of an eligible digital version relating to the property are, where an employee undertakes, supervises or directly supports the preparation of the property or the publishing of the eligible digital version, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the preparation of the property or to the publishing of the eligible digital version relating to the property;

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

(c)  the amount of the labour expenditure attributable to preparation costs and digital version publishing costs of a corporation for a taxation year in respect of a property is to be reduced, if applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds to the salaries or wages described in paragraph a of that definition, to the advances described in paragraph b of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph c of that definition or to the consideration or the portion of the consideration described in paragraph d of that definition, that are included in that labour expenditure attributable to preparation costs and digital version publishing costs 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 c of that definition, the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure attributable to preparation costs and digital version publishing costs for the year in respect of a property is deemed to be null.

For the purposes of this division, the printing and reprinting costs directly attributable to the printing and reprinting of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the printing costs, other than publishing fees and administration costs, incurred by the corporation for the first printing of the eligible work or of works that are part of the eligible group of works, the first assembly and the first binding;

(a.1)  the reprinting costs, other than publishing fees and administration costs, incurred by the corporation as part of the reprinting of the eligible work or of a work that is part of the eligible group of works; and

(b)   the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the printing or reprinting of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the printing or reprinting of the property.

For the purposes of this division, the preparation costs directly attributable to the preparation of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the preparation costs, other than publishing fees and administration costs, including non-refundable advances paid to the author or authors, editing, design, research, art work, mock-up production, layout, typesetting and pre-press costs;

(b)  the publishing fees and administration costs pertaining to the property that are reasonable in the circumstances; and

(c)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the preparation of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the preparation of the property.

For the purposes of this division, the digital version publishing costs directly attributable to the publishing of an eligible digital version relating to a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the digital version publishing costs, other than publishing fees and administration costs, incurred by the corporation to carry out the publishing stages of the eligible digital version of the work or of a work that is part of the group of works, including the conversion, production of metadata, indexing, previewing, stocking, destocking, quality control and filing of the work in a digital warehouse; and

(b)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the publishing of the eligible digital version of the eligible work or of a work that is part of the eligible group of works, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the publishing of the eligible digital version of the work.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the third paragraph, a labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property, or

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, a qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property;

iii.  (subparagraph repealed);

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

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

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the fifth paragraph, a labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the property, or

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” in the first paragraph, a qualified labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the property;

iii.  (subparagraph repealed);

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

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

For the purposes of the definitions of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” and “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  in relation to a property referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.14, the definition of “qualified labour expenditure attributable to printing and reprinting costs” is to be read, in respect of the property, as if “333 1/3%” was replaced wherever it appears by “380.95%” and the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” is to be read, in respect of the property, as if “250%” was replaced wherever it appears by “285.71%”; and

(b)  in relation to a property referred to in subparagraph a.1 of the first paragraph of section 1029.8.36.0.0.14, the definition of “qualified labour expenditure attributable to printing and reprinting costs” is to be read, in respect of the property, as if “333 1/3%” was replaced wherever it appears by “370.37%” and the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” is to be read, in respect of the property, as if “250%” was replaced wherever it appears by “285.71%”.

2001, c. 51, s. 117; 2002, c. 9, s. 65; 2003, c. 9, s. 210; 2004, c. 21, s. 317; 2005, c. 23, s. 160; 2005, c. 38, s. 246; 2006, c. 13, s. 117; 2006, c. 36, s. 131; 2007, c. 12, s. 158; 2010, c. 5, s. 155; 2010, c. 25, s. 133; 2011, c. 1, s. 68; 2011, c. 34, s. 75; 2013, c. 10, s. 111.

2011-12-09

1029.8.36.0.0.13. In this division,

“eligible digital version” of an eligible work or a work that is part of an eligible group of works published by a corporation means a digital version of that work in respect of which the Société de développement des entreprises culturelles specifies in the favourable advance ruling given or the certificate issued to the corporation in respect of the eligible work or eligible group of works, for the purposes of this division, that the digital version is an eligible digital version of the work or of the work that is part of the group of works;

“eligible employee” of an individual, a corporation or a partnership, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out work relating to the property that is eligible preparation work, eligible printing work, eligible reprinting work or eligible publishing work concerning an eligible digital version;

“eligible group of works” for a taxation year means property that is a group of works in respect of which the corporation holds, for the year, a favourable advance ruling given or a certificate issued by the Société de développement des entreprises culturelles for the purposes of this division;

“eligible individual”, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out work relating to the property that is eligible preparation work, eligible printing work, eligible reprinting work or eligible publishing work concerning an eligible digital version;

“eligible preparation work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to publishing the property, from the initial stage to the stage preceding the production in print form of the eligible work or works that are part of the eligible group of works, including editing, design, research, art work, mock-up production, layout, typesetting and pre-press work;

“eligible printing work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to printing the property, which include the first printing of the eligible work or works that are part of the eligible group of works, first assembly and first binding;

“eligible publishing work concerning an eligible digital version” relating to a property that is an eligible work or an eligible group of works means the work performed to carry out the publishing stages of the eligible digital version of the work or of a work that is part of the group of works, including the conversion, production of metadata, indexing, previewing, stocking, destocking, quality control and filing of the work in a digital warehouse;

“eligible reprinting work” in relation to an eligible work or a work that is part of an eligible group of works means the work to carry out the various stages related to reprinting the work;

“eligible work” for a taxation year means property that is a work published by a corporation, in respect of which the corporation holds, for the year, a favourable advance ruling or a certificate given or issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division;

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

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

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

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

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

“labour expenditure attributable to preparation costs and digital version publishing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth and fifth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the preparation of the property or the publishing of an eligible digital version relating to the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible preparation work relating to the property or for eligible publishing work concerning an eligible digital version and relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the non-refundable advances directly attributable to the preparation of the property or the publishing of an eligible digital version relating to the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the non-refundable advances that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that are paid by the corporation to a Québec author or a holder of the rights of a Québec author, except such advances paid to a Québec author or a holder of the rights of a Québec author for the acquisition of rights on the existing material;

(c)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible preparation work relating to the property or for eligible publishing work concerning an eligible digital version and relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of the eligible digital version of that work, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the preparation of the work or the publishing of its eligible digital version,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of its eligible digital version,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of its eligible digital version, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the preparation of the eligible work or a work that is part of the eligible group of works or with the publishing of the eligible digital version of that work, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the preparation of the work or with the publishing of its eligible digital version; and

(d)  half of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, half of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible preparation work or for eligible publishing work concerning an eligible digital version by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the third and fourth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the printing of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible printing work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(a.1)  the salaries or wages directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they are incurred within the time specified in subparagraph i of subparagraph c of the fourth paragraph and relate to services rendered in Québec for eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation to its eligible employees;

(b)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees as part of the printing or reprinting of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees as part of the printing or reprinting of the work; and

(c)  one-third of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, one-third of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“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 book publishing business, that is a qualified business, and that, for the year, is a publishing house recognized by the Société de développement des entreprises culturelles;

“qualified labour expenditure attributable to preparation costs and digital version publishing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to preparation costs and digital version publishing costs 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 c of the fifth 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the preparation of the property or to the publishing of a digital version of the property, up to 250% of the tax under Part III.1.0.5 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 attributable to preparation costs and digital version publishing costs 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 attributable to preparation costs and digital version publishing costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, because of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, 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, in connection with a labour expenditure attributable to preparation costs and digital version publishing costs 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 c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs and digital version publishing costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to preparation costs and digital version publishing costs 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 ii of subparagraph c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs and digital version publishing costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph c of the definition of “labour expenditure attributable to preparation costs and digital version publishing costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the fifth paragraph, reduced the labour expenditure attributable to preparation costs and digital version publishing costs 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 aggregate of the preparation costs directly attributable to the preparation of the property and the digital version publishing costs directly attributable to the publishing of an eligible digital version relating to the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the preparation of the property or the publishing of a digital version of the property for a taxation year preceding the year exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the preparation of the property or the publishing of a digital version of the property, for a taxation year preceding the year;

“qualified labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the printing and reprinting costs 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 c of the third 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the printing and reprinting of the property, up to 333 1/3% of the tax under Part III.1.0.5 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 attributable to the printing and reprinting costs 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 attributable to the printing and reprinting costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 333 1/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the printing and reprinting costs 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 c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to the printing and reprinting costs 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 ii of subparagraph c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular 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 attributable to printing and reprinting costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the third paragraph, reduced the labour expenditure attributable to printing and reprinting costs of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  33 1/3% of the amount by which the aggregate of the printing costs directly attributable to the printing of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or of the last work that is part of the eligible group of works is completed 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 fourth paragraph and the reprinting costs directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that the corporation incurred before the end of the year and within the time specified in subparagraph i of subparagraph c of the fourth paragraph to the extent that they relate to eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the printing and reprinting of the property for a taxation year preceding the year exceeds 333 1/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the printing and reprinting of the property, for a taxation year preceding the year;

“Québec author” means an individual who is an author or an individual who is the editor of an eligible work or a work that is part of an eligible group of works written by a team of contributors, and who was resident in Québec at the end of the calendar year preceding the calendar year in which the publishing work began, or was resident in Québec for at least five consecutive years prior to the beginning of the publishing work;

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

For the purposes of this section, the initial stage of publishing, in relation to an eligible work or an eligible group of works, means the date specified for that purpose in the favourable advance ruling given or the certificate issued by the Société de développement des entreprises culturelles, in relation to that work or group of works, for the purposes of this division.

For the purposes of the definition of “labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the printing of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the printing 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 printing of the property;

(a.1)  for the purposes of paragraph a.1 of the definition, the salaries or wages directly attributable to the reprinting of an eligible work or of a work that is part of an eligible group of works are, where an employee directly undertakes, supervises or supports the reprinting of the work, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the reprinting of the work;

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

(c)  the amount of the labour expenditure attributable to printing and reprinting costs 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 to the salaries or wages described in paragraph a or a.1 of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition or to the consideration or the portion of the consideration described in paragraph c of that definition, that are included in that labour expenditure attributable to printing and reprinting costs 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, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure attributable to printing and reprinting costs for the year in respect of a property is deemed to be null.

For the purposes of the definitions of “labour expenditure attributable to preparation costs and digital version publishing costs”, “labour expenditure attributable to printing and reprinting costs”, “qualified labour expenditure attributable to preparation costs and digital version publishing costs” and “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed;

(b)  no expenditure may be taken into consideration in computing a labour expenditure attributable to printing and reprinting costs for a taxation year in respect of a property that is an eligible work or an eligible group of works or a labour expenditure attributable to preparation costs and digital version publishing costs for the year in respect of the property, printing and reprinting costs directly attributable to the printing and reprinting of the property, preparation costs directly attributable to the preparation of the property and digital version publishing costs directly attributable to the publishing of an eligible digital version relating to the property, as the case may be, 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 1029.8.36.0.0.14 for that taxation year; and

(c)  no expenditure that relates to eligible reprinting work in relation to an eligible work or a work that is part of an eligible group of works may be taken into consideration in computing a labour expenditure attributable to printing and reprinting costs for a taxation year in respect of the eligible work or the eligible group of works, or printing and reprinting costs directly attributable to the printing and reprinting of the eligible work or the eligible group of works incurred before the end of the year, unless

i.  the expenditure is incurred, in respect of the eligible work or of the work that is part of the eligible group of works, on or before the day that is 36 months after the day on which the first printing of the work is completed, and

ii.  the Société de développement des entreprises culturelles notifies the Minister that the eligible reprinting work relating to the work began after 22 June 2009.

For the purposes of the definition of “labour expenditure attributable to preparation costs and digital version publishing costs” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the preparation of a property that is an eligible work or an eligible group of works or to the publishing of an eligible digital version relating to the property are, where an employee undertakes, supervises or directly supports the preparation of the property or the publishing of the eligible digital version, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the preparation of the property or to the publishing of the eligible digital version relating to the property;

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

(c)  the amount of the labour expenditure attributable to preparation costs and digital version publishing costs of a corporation for a taxation year in respect of a property is to be reduced, if applicable, by the aggregate of all amounts each of which is the lesser of the particular amount that corresponds to the salaries or wages described in paragraph a of that definition, to the advances described in paragraph b of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph c of that definition or to the consideration or the portion of the consideration described in paragraph d of that definition, that are included in that labour expenditure attributable to preparation costs and digital version publishing costs 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 c of that definition, the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure attributable to preparation costs and digital version publishing costs for the year in respect of a property is deemed to be null.

For the purposes of this division, the printing and reprinting costs directly attributable to the printing and reprinting of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the printing costs, other than publishing fees and administration costs, incurred by the corporation for the first printing of the eligible work or of works that are part of the eligible group of works, the first assembly and the first binding;

(a.1)  the reprinting costs, other than publishing fees and administration costs, incurred by the corporation as part of the reprinting of the eligible work or of a work that is part of the eligible group of works; and

(b)   the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the printing or reprinting of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the printing or reprinting of the property.

For the purposes of this division, the preparation costs directly attributable to the preparation of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the preparation costs, other than publishing fees and administration costs, including non-refundable advances paid to the author or authors, editing, design, research, art work, mock-up production, layout, typesetting and pre-press costs;

(b)  the publishing fees and administration costs pertaining to the property that are reasonable in the circumstances; and

(c)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the preparation of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the preparation of the property.

For the purposes of this division, the digital version publishing costs directly attributable to the publishing of an eligible digital version relating to a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the digital version publishing costs, other than publishing fees and administration costs, incurred by the corporation to carry out the publishing stages of the eligible digital version of the work or of a work that is part of the group of works, including the conversion, production of metadata, indexing, previewing, stocking, destocking, quality control and filing of the work in a digital warehouse; and

(b)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the publishing of the eligible digital version of the eligible work or of a work that is part of the eligible group of works, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the publishing of the eligible digital version of the work.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the third paragraph, a labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property, or

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, a qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property;

iii.  (subparagraph repealed);

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

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

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the fifth paragraph, a labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the property, or

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” in the first paragraph, a qualified labour expenditure attributable to preparation costs and digital version publishing costs of the corporation in respect of the property;

iii.  (subparagraph repealed);

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

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

For the purposes of the definitions of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” and “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  in relation to a property referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.14, the definition of “qualified labour expenditure attributable to printing and reprinting costs” is to be read, in respect of the property, as if “333 1/3%” was replaced wherever it appears by “380.95%” and the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” is to be read, in respect of the property, as if “250%” was replaced wherever it appears by “285.71%” ; and

(b)  in relation to a property referred to in subparagraph a.1 of the first paragraph of section 1029.8.36.0.0.14, the definition of “qualified labour expenditure attributable to printing and reprinting costs” is to be read, in respect of the property, as if “333 1/3%” was replaced wherever it appears by “370.37%” and the definition of “qualified labour expenditure attributable to preparation costs and digital version publishing costs” is to be read, in respect of the property, as if “250%” was replaced wherever it appears by “285.71%”.

2001, c. 51, s. 117; 2002, c. 9, s. 65; 2003, c. 9, s. 210; 2004, c. 21, s. 317; 2005, c. 23, s. 160; 2005, c. 38, s. 246; 2006, c. 13, s. 117; 2006, c. 36, s. 131; 2007, c. 12, s. 158; 2010, c. 5, s. 155; 2010, c. 25, s. 133; 2011, c. 1, s. 68; 2011, c. 34, s. 75.

2011-02-17

1029.8.36.0.0.13. In this division,

“eligible employee” of an individual, a corporation or a partnership, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out eligible preparation work, eligible printing work or eligible reprinting work relating to the property;

“eligible group of works” for a taxation year means property that is a group of works in respect of which the corporation holds, for the year, a favourable advance ruling given or a certificate issued by the Société de développement des entreprises culturelles for the purposes of this division;

“eligible individual”, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out eligible preparation work, eligible printing work or eligible reprinting work relating to the property;

“eligible preparation work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to publishing the property, from the initial stage to the stage preceding the production in print form of the eligible work or works that are part of the eligible group of works, including editing, design, research, art work, mock-up production, layout, typesetting and pre-press work;

“eligible printing work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to printing the property, which include the first printing of the eligible work or works that are part of the eligible group of works, first assembly and first binding;

“eligible reprinting work” in relation to an eligible work or a work that is part of an eligible group of works means the work to carry out the various stages related to reprinting the work;

“eligible work” for a taxation year means property that is a work published by a corporation, in respect of which the corporation holds, for the year, a favourable advance ruling or a certificate given or issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division;

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

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

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

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

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

“labour expenditure attributable to preparation costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth and fifth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the preparation of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible preparation work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the non-refundable advances directly attributable to the preparation of the property that are incurred by the corporation in the year pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that are paid by the corporation to a Québec author or a holder of the rights of a Québec author, except such advances paid to a holder of the rights of a Québec author for the acquisition of rights on the existing material;

(c)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible preparation work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the preparation of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the preparation of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the preparation of the eligible work or a work that is part of the eligible group of works, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the preparation of the work; and

(d)  half of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, half of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible preparation work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the third and fourth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the printing of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible printing work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(a.1)  the salaries or wages directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they are incurred within the time specified in subparagraph i of subparagraph c of the fourth paragraph and relate to services rendered in Québec for eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation to its eligible employees;

(b)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees as part of the printing or reprinting of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees as part of the printing or reprinting of the work; and

(c)  one-third of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, one-third of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“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 book publishing business, that is a qualified business, and that, for the year, is a publishing house recognized by the Société de développement des entreprises culturelles;

“qualified labour expenditure attributable to preparation costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the preparation costs 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 c of the fifth 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the preparation of the property, up to 250% of the tax under Part III.1.0.5 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 attributable to the preparation costs 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 attributable to the preparation costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the preparation costs 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 c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to the preparation costs 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 ii of subparagraph c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph c of the definition of “labour expenditure attributable to preparation costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the fifth paragraph, reduced the labour expenditure attributable to preparation costs 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 preparation costs directly attributable to the preparation of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the preparation costs of the corporation in respect of the preparation of the property for a taxation year preceding the year exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the preparation of the property, for a taxation year preceding the year;

“qualified labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the printing and reprinting costs 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 c of the third 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the printing and reprinting of the property, up to 333 1/3% of the tax under Part III.1.0.5 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 attributable to the printing and reprinting costs 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 attributable to the printing and reprinting costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 333 1/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the printing and reprinting costs 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 c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to the printing and reprinting costs 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 ii of subparagraph c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular 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 attributable to printing and reprinting costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the third paragraph, reduced the labour expenditure attributable to printing and reprinting costs of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  33 1/3% of the amount by which the aggregate of the printing costs directly attributable to the printing of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or of the last work that is part of the eligible group of works is completed 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 fourth paragraph and the reprinting costs directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that the corporation incurred before the end of the year and within the time specified in subparagraph i of subparagraph c of the fourth paragraph to the extent that they relate to eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the printing and reprinting of the property for a taxation year preceding the year exceeds 333 1/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the printing and reprinting of the property, for a taxation year preceding the year;

“Québec author” means an individual who is an author or an individual who is the editor of an eligible work or a work that is part of an eligible group of works written by a team of contributors, and who was resident in Québec at the end of the calendar year preceding the calendar year in which the publishing work began, or was resident in Québec for at least five consecutive years prior to the beginning of the publishing work;

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

For the purposes of this section, the initial stage of publishing, in relation to an eligible work or an eligible group of works, means

(a)  if a publishing contract is entered into between a qualified corporation and the author or one of the authors of the eligible work or a work that is part of the eligible group of works,

i.  in the case of an eligible work, the time at which the qualified corporation enters into such a publishing contract with the author or one of the authors of the work, and

ii.  in the case of an eligible group of works, the time at which the qualified corporation enters into a first publishing contract with the author or one of the authors of a work of the group; and

(b)  in any other case, the date on which the qualified corporation files an application with the Société de développement des entreprises culturelles for an advance ruling in respect of the eligible work or the eligible group of works.

For the purposes of the definition of “labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the printing of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the printing 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 printing of the property;

(a.1)  for the purposes of paragraph a.1 of the definition, the salaries or wages directly attributable to the reprinting of an eligible work or of a work that is part of an eligible group of works are, where an employee directly undertakes, supervises or supports the reprinting of the work, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the reprinting of the work;

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

(c)  the amount of the labour expenditure attributable to printing and reprinting costs 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 to the salaries or wages described in paragraph a or a.1 of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition or to the consideration or the portion of the consideration described in paragraph c of that definition, that are included in that labour expenditure attributable to printing and reprinting costs 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, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure attributable to printing and reprinting costs for the year in respect of a property is deemed to be null.

For the purposes of the definitions of “labour expenditure attributable to preparation costs”, “labour expenditure attributable to printing and reprinting costs”, “qualified labour expenditure attributable to preparation costs” and “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed;

(b)  no expenditure may be taken into consideration in computing a labour expenditure attributable to printing and reprinting costs or to preparation costs of a corporation for a taxation year in respect of a property that is an eligible work or an eligible group of works, or printing and reprinting costs or preparation costs directly attributable to the printing and reprinting or preparation 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 1029.8.36.0.0.14 for that taxation year; and

(c)  no expenditure that relates to eligible reprinting work in relation to an eligible work or a work that is part of an eligible group of works may be taken into consideration in computing a labour expenditure attributable to printing and reprinting costs for a taxation year in respect of the eligible work or the eligible group of works, or printing and reprinting costs directly attributable to the printing and reprinting of the eligible work or the eligible group of works incurred before the end of the year, unless

i.  the expenditure is incurred, in respect of the eligible work or of the work that is part of the eligible group of works, on or before the day that is 36 months after the day on which the first printing of the work is completed, and

ii.  the Société de développement des entreprises culturelles notifies the Minister that the eligible reprinting work relating to the work began after 22 June 2009.

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

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the preparation of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the preparation 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 preparation of the property;

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

(c)  the amount of the labour expenditure attributable to preparation costs 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 to the salaries or wages described in paragraph a of that definition, to the advances described in paragraph b of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph c of that definition or to the consideration or the portion of the consideration described in paragraph d of that definition, that are included in that labour expenditure attributable to preparation costs 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 c of that definition, the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

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

For the purposes of this division, the printing and reprinting costs directly attributable to the printing and reprinting of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the printing costs, other than publishing fees and administration costs, incurred by the corporation for the first printing of the eligible work or of works that are part of the eligible group of works, the first assembly and the first binding;

(a.1)  the reprinting costs, other than publishing fees and administration costs, incurred by the corporation as part of the reprinting of the eligible work or of a work that is part of the eligible group of works; and

(b)   the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the printing or reprinting of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the printing or reprinting of the property.

For the purposes of this division, the preparation costs directly attributable to the preparation of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the preparation costs, other than publishing fees and administration costs, including non-refundable advances paid to the author or authors, editing, design, research, art work, mock-up production, layout, typesetting and pre-press costs;

(b)  the publishing fees and administration costs pertaining to the property that are reasonable in the circumstances; and

(c)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the preparation of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the preparation of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the third paragraph, a labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, a qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property, or

iii.  (subparagraph repealed);

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

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

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the fifth paragraph, a labour expenditure attributable to the preparation costs of the corporation in respect of the property,

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

iii.  (subparagraph repealed);

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

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

For the purposes of the definitions of “qualified labour expenditure attributable to printing and reprinting costs” and “qualified labour expenditure attributable to preparation costs” in the first paragraph, the following rules apply:

(a)  in relation to a property referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.14, the definition of “qualified labour expenditure attributable to printing and reprinting costs” is to be read, in respect of the property, as if “333 1/3%” was replaced wherever it appears by “380.95%” and the definition of “qualified labour expenditure attributable to preparation costs” is to be read, in respect of the property, as if “250%” was replaced wherever it appears by “285.71%”; and

(b)  in relation to a property referred to in subparagraph a.1 of the first paragraph of section 1029.8.36.0.0.14, the definition of “qualified labour expenditure attributable to printing and reprinting costs” is to be read, in respect of the property, as if “333 1/3%” was replaced wherever it appears by “370.37%” and the definition of “qualified labour expenditure attributable to preparation costs” is to be read, in respect of the property, as if “250%” was replaced wherever it appears by“285.71%”.

2001, c. 51, s. 117; 2002, c. 9, s. 65; 2003, c. 9, s. 210; 2004, c. 21, s. 317; 2005, c. 23, s. 160; 2005, c. 38, s. 246; 2006, c. 13, s. 117; 2006, c. 36, s. 131; 2007, c. 12, s. 158; 2010, c. 5, s. 155; 2010, c. 25, s. 133; 2011, c. 1, s. 68.

2010-10-27

1029.8.36.0.0.13. In this division,

“eligible employee” of an individual, a corporation or a partnership, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out eligible preparation work, eligible printing work or eligible reprinting work relating to the property;

“eligible group of works” for a taxation year means property that is a group of works in respect of which the corporation holds, for the year, a favourable advance ruling given or a certificate issued by the Société de développement des entreprises culturelles for the purposes of this division;

“eligible individual”, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out eligible preparation work, eligible printing work or eligible reprinting work relating to the property;

“eligible preparation work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to publishing the property, from the initial stage to the stage preceding the production in print form of the eligible work or works that are part of the eligible group of works, including editing, design, research, art work, mock-up production, layout, typesetting and pre-press work;

“eligible printing work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to printing the property, which include the first printing of the eligible work or works that are part of the eligible group of works, first assembly and first binding;

“eligible reprinting work” in relation to an eligible work or a work that is part of an eligible group of works means the work to carry out the various stages related to reprinting the work;

“eligible work” for a taxation year means property that is a work published by a corporation, in respect of which the corporation holds, for the year, a favourable advance ruling or a certificate given or issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division;

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

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

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

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

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

“labour expenditure attributable to preparation costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth and fifth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the preparation of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible preparation work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the non-refundable advances directly attributable to the preparation of the property that are incurred by the corporation in the year pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that are paid by the corporation to a Québec author or a holder of the rights of a Québec author, except such advances paid to a holder of the rights of a Québec author for the acquisition of rights on the existing material;

(c)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible preparation work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the preparation of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the preparation of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the preparation of the eligible work or a work that is part of the eligible group of works, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the preparation of the work; and

(d)  half of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, half of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible preparation work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the third and fourth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the printing of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible printing work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(a.1)  the salaries or wages directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they are incurred within the time specified in subparagraph i of subparagraph c of the fourth paragraph and relate to services rendered in Québec for eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation to its eligible employees;

(b)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees as part of the printing or reprinting of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec as part of the printing or reprinting of the eligible work or a work that is part of the eligible group of works, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees as part of the printing or reprinting of the work; and

(c)  one-third of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, one-third of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible printing work or eligible reprinting work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“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 book publishing business, that is a qualified business, and that, for the year, is a publishing house recognized by the Société de développement des entreprises culturelles;

“qualified labour expenditure attributable to preparation costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the preparation costs 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 c of the fifth 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the preparation of the property, up to 250% of the tax under Part III.1.0.5 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 attributable to the preparation costs 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 attributable to the preparation costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the preparation costs 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 c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to the preparation costs 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 ii of subparagraph c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph c of the definition of “labour expenditure attributable to preparation costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the fifth paragraph, reduced the labour expenditure attributable to preparation costs 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 preparation costs directly attributable to the preparation of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the preparation costs of the corporation in respect of the preparation of the property for a taxation year preceding the year exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the preparation of the property, for a taxation year preceding the year;

“qualified labour expenditure attributable to printing and reprinting costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the printing and reprinting costs 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 c of the third 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the printing and reprinting of the property, up to 3331/3% of the tax under Part III.1.0.5 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 attributable to the printing and reprinting costs 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 attributable to the printing and reprinting costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 3331/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the printing and reprinting costs 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 c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to the printing and reprinting costs 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 ii of subparagraph c of the third paragraph, reduced that labour expenditure attributable to printing and reprinting costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular 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 attributable to printing and reprinting costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the third paragraph, reduced the labour expenditure attributable to printing and reprinting costs of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  331/3% of the amount by which the aggregate of the printing costs directly attributable to the printing of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or of the last work that is part of the eligible group of works is completed 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 fourth paragraph and the reprinting costs directly attributable to the reprinting of the eligible work or of a work that is part of the eligible group of works that the corporation incurred before the end of the year and within the time specified in subparagraph i of subparagraph c of the fourth paragraph to the extent that they relate to eligible reprinting work referred to in subparagraph ii of that subparagraph c in relation to the work, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the printing and reprinting of the property for a taxation year preceding the year exceeds 3331/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the printing and reprinting of the property, for a taxation year preceding the year;

“Québec author” means an individual who is an author or an individual who is the editor of an eligible work or a work that is part of an eligible group of works written by a team of contributors, and who was resident in Québec at the end of the calendar year preceding the calendar year in which the publishing work began, or was resident in Québec for at least five consecutive years prior to the beginning of the publishing work;

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

For the purposes of this section, the initial stage of publishing, in relation to an eligible work or an eligible group of works, means

(a)  if a publishing contract is entered into between a qualified corporation and the author or one of the authors of the eligible work or a work that is part of the eligible group of works,

i.  in the case of an eligible work, the time at which the qualified corporation enters into such a publishing contract with the author or one of the authors of the work, and

ii.  in the case of an eligible group of works, the time at which the qualified corporation enters into a first publishing contract with the author or one of the authors of a work of the group; and

(b)  in any other case, the date on which the qualified corporation files an application with the Société de développement des entreprises culturelles for an advance ruling in respect of the eligible work or the eligible group of works.

For the purposes of the definition of “labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the printing of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the printing 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 printing of the property;

(a.1)  for the purposes of paragraph a.1 of the definition, the salaries or wages directly attributable to the reprinting of an eligible work or of a work that is part of an eligible group of works are, where an employee directly undertakes, supervises or supports the reprinting of the work, the portion of the salaries or wages paid to or on behalf of the employee that may reasonably be considered to relate to the reprinting of the work;

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

(c)  the amount of the labour expenditure attributable to printing and reprinting costs 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 to the salaries or wages described in paragraph a or a.1 of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition or to the consideration or the portion of the consideration described in paragraph c of that definition, that are included in that labour expenditure attributable to printing and reprinting costs 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, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

(e)  where, for a taxation year, a corporation is not a qualified corporation, its labour expenditure attributable to printing and reprinting costs for the year in respect of a property is deemed to be null.

For the purposes of the definitions of “labour expenditure attributable to preparation costs”, “labour expenditure attributable to printing and reprinting costs”, “qualified labour expenditure attributable to preparation costs” and “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed;

(b)  no expenditure may be taken into consideration in computing a labour expenditure attributable to printing and reprinting costs or to preparation costs of a corporation for a taxation year in respect of a property that is an eligible work or an eligible group of works, or printing and reprinting costs or preparation costs directly attributable to the printing and reprinting or preparation 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 1029.8.36.0.0.14 for that taxation year; and

(c)  no expenditure that relates to eligible reprinting work in relation to an eligible work or a work that is part of an eligible group of works may be taken into consideration in computing a labour expenditure attributable to printing and reprinting costs for a taxation year in respect of the eligible work or the eligible group of works, or printing and reprinting costs directly attributable to the printing and reprinting of the eligible work or the eligible group of works incurred before the end of the year, unless

i.  the expenditure is incurred, in respect of the eligible work or of the work that is part of the eligible group of works, on or before the day that is 36 months after the day on which the first printing of the work is completed, and

ii.  the Société de développement des entreprises culturelles notifies the Minister that the eligible reprinting work relating to the work began after 22 June 2009.

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

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the preparation of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the preparation 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 preparation of the property;

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

(c)  the amount of the labour expenditure attributable to preparation costs 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 to the salaries or wages described in paragraph a of that definition, to the advances described in paragraph b of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph c of that definition or to the consideration or the portion of the consideration described in paragraph d of that definition, that are included in that labour expenditure attributable to preparation costs 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 c of that definition, the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

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

For the purposes of this division, the printing and reprinting costs directly attributable to the printing and reprinting of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the printing costs, other than publishing fees and administration costs, incurred by the corporation for the first printing of the eligible work or of works that are part of the eligible group of works, the first assembly and the first binding;

(a.1)  the reprinting costs, other than publishing fees and administration costs, incurred by the corporation as part of the reprinting of the eligible work or of a work that is part of the eligible group of works; and

(b)   the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the printing or reprinting of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the printing or reprinting of the property.

For the purposes of this division, the preparation costs directly attributable to the preparation of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the preparation costs, other than publishing fees and administration costs, including non-refundable advances paid to the author or authors, editing, design, research, art work, mock-up production, layout, typesetting and pre-press costs;

(b)  the publishing fees and administration costs pertaining to the property that are reasonable in the circumstances; and

(c)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the preparation of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the preparation of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the third paragraph, a labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property,

ii.  because of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to printing and reprinting costs” in the first paragraph, a qualified labour expenditure attributable to the printing and reprinting costs of the corporation in respect of the property, or

iii.  (subparagraph repealed);

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

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

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the fifth paragraph, a labour expenditure attributable to the preparation costs of the corporation in respect of the property,

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

iii.  (subparagraph repealed);

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

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

For the purposes of the definitions of “qualified labour expenditure attributable to printing and reprinting costs” and “qualified labour expenditure attributable to preparation costs” in the first paragraph, the following rules apply:

(a)  in relation to a property referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.14, the definition of “qualified labour expenditure attributable to printing and reprinting costs” is to be read, in respect of the property, as if “3331/3%” was replaced wherever it appears by “380.95%” and the definition of “qualified labour expenditure attributable to preparation costs” is to be read, in respect of the property, as if “250%” was replaced wherever it appears by “285.7143%”; and

(b)  in relation to a property referred to in subparagraph a.1 of the first paragraph of section 1029.8.36.0.0.14, the definition of “qualified labour expenditure attributable to printing and reprinting costs” is to be read, in respect of the property, as if “3331/3%” was replaced wherever it appears by “370.37%” and the definition of “qualified labour expenditure attributable to preparation costs” is to be read, in respect of the property, as if “250%” was replaced wherever it appears by “285.7143%”.

2001, c. 51, s. 117; 2002, c. 9, s. 65; 2003, c. 9, s. 210; 2004, c. 21, s. 317; 2005, c. 23, s. 160; 2005, c. 38, s. 246; 2006, c. 13, s. 117; 2006, c. 36, s. 131; 2007, c. 12, s. 158; 2010, c. 5, s. 155; 2010, c. 25, s. 133.

2010-04-20

1029.8.36.0.0.13. In this division,

“eligible employee” of an individual, a corporation or a partnership, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out eligible preparation work or eligible printing work relating to the property;

“eligible group of works” for a taxation year means property that is a group of works in respect of which the corporation holds, for the year, a favourable advance ruling given or a certificate issued by the Société de développement des entreprises culturelles for the purposes of this division;

“eligible individual”, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out eligible preparation work or eligible printing work relating to the property;

“eligible preparation work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to publishing the property, from the initial stage to the stage preceding the production in print form of the eligible work or works that are part of the eligible group of works, including editing, design, research, art work, mock-up production, layout, typesetting and pre-press work;

“eligible printing work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to printing the property, which include the first printing of the eligible work or works that are part of the eligible group of works, first assembly and first binding;

“eligible work” for a taxation year means property that is a work published by a corporation, in respect of which the corporation holds, for the year, a favourable advance ruling or a certificate given or issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division;

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

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

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

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

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

“labour expenditure attributable to preparation costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth and fifth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the preparation of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible preparation work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the non-refundable advances directly attributable to the preparation of the property that are incurred by the corporation in the year pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that are paid by the corporation to a Québec author or a holder of the rights of a Québec author, except such advances paid to a holder of the rights of a Québec author for the acquisition of rights on the existing material;

(c)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible preparation work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the preparation of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the preparation of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the preparation of the eligible work or a work that is part of the eligible group of works, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the preparation of the work; and

(d)  half of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, half of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible preparation work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“labour expenditure attributable to printing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the third and fourth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the printing of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible printing work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible printing work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the printing of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the printing of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the printing of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the printing of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the printing of the eligible work or a work that is part of the eligible group of works, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the printing of the work; and

(c)  one-third of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, one-third of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible printing work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“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 book publishing business, that is a qualified business, and that, for the year, is a publishing house recognized by the Société de développement des entreprises culturelles;

“qualified labour expenditure attributable to preparation costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the preparation costs 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 c of the fifth 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the preparation of the property, up to 250% of the tax under Part III.1.0.5 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 attributable to the preparation costs 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 attributable to the preparation costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the preparation costs 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 c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to the preparation costs 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 ii of subparagraph c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph c of the definition of “labour expenditure attributable to preparation costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the fifth paragraph, reduced the labour expenditure attributable to preparation costs 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 preparation costs directly attributable to the preparation of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the preparation costs of the corporation in respect of the preparation of the property for a taxation year preceding the year exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the preparation of the property, for a taxation year preceding the year;

“qualified labour expenditure attributable to printing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the printing costs 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 c of the third 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the printing of the property, up to 3331/3% of the tax under Part III.1.0.5 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 attributable to the printing costs 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 attributable to the printing costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 3331/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the printing costs 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 c of the third paragraph, reduced that labour expenditure attributable to printing costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to the printing costs 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 ii of subparagraph c of the third paragraph, reduced that labour expenditure attributable to printing costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular 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 attributable to printing costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the third paragraph, reduced the labour expenditure attributable to printing costs of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  331/3% of the amount by which the printing costs directly attributable to the printing of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the printing costs of the corporation in respect of the printing of the property for a taxation year preceding the year exceeds 3331/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the printing of the property, for a taxation year preceding the year;

“Québec author” means an individual who is an author or an individual who is the editor of an eligible work or a work that is part of an eligible group of works written by a team of contributors, and who was resident in Québec at the end of the calendar year preceding the calendar year in which the publishing work began, or was resident in Québec for at least five consecutive years prior to the beginning of the publishing work;

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

For the purposes of this section, the initial stage of publishing, in relation to an eligible work or an eligible group of works, means

(a)  if a publishing contract is entered into between a qualified corporation and the author or one of the authors of the eligible work or a work that is part of the eligible group of works,

i.  in the case of an eligible work, the time at which the qualified corporation enters into such a publishing contract with the author or one of the authors of the work, and

ii.  in the case of an eligible group of works, the time at which the qualified corporation enters into a first publishing contract with the author or one of the authors of a work of the group; and

(b)  in any other case, the date on which the qualified corporation files an application with the Société de développement des entreprises culturelles for an advance ruling in respect of the eligible work or the eligible group of works.

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

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the printing of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the printing 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 printing of the property;

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

(c)  the amount of the labour expenditure attributable to printing costs 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 to the salaries or wages described in paragraph a of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition or to the consideration or the portion of the consideration described in paragraph c of that definition, that are included in that labour expenditure attributable to printing costs 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, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

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

For the purposes of the definitions of “labour expenditure attributable to preparation costs”, “labour expenditure attributable to printing costs”, “qualified labour expenditure attributable to preparation costs” and “qualified labour expenditure attributable to printing costs” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed; and

(b)  no expenditure may be taken into consideration in computing a labour expenditure attributable to printing costs or to preparation costs of a corporation for a taxation year in respect of a property that is an eligible work or an eligible group of works, or printing costs or preparation costs directly attributable to the printing or preparation of the property incurred before the end of the year, unless the expenditure is paid at the time the corporation first files with the Minister the prescribed form containing the prescribed information provided for in the first paragraph of section 1029.8.36.0.0.14 for that taxation year.

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

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the preparation of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the preparation 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 preparation of the property;

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

(c)  the amount of the labour expenditure attributable to preparation costs 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 to the salaries or wages described in paragraph a of that definition, to the advances described in paragraph b of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph c of that definition or to the consideration or the portion of the consideration described in paragraph d of that definition, that are included in that labour expenditure attributable to preparation costs 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 c of that definition, the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

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

For the purposes of this division, the printing costs directly attributable to the printing of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the printing costs, other than publishing fees and administration costs, incurred by the corporation for the first printing of the eligible work or of works that are part of the eligible group of works, the first assembly and the first binding; and

(b)   the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the printing of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the printing of the property.

For the purposes of this division, the preparation costs directly attributable to the preparation of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the preparation costs, other than publishing fees and administration costs, including non-refundable advances paid to the author or authors, editing, design, research, art work, mock-up production, layout, typesetting and pre-press costs;

(b)  the publishing fees and administration costs pertaining to the property that are reasonable in the circumstances; and

(c)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the preparation of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the preparation of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to printing costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the third paragraph, a labour expenditure attributable to the printing costs of the corporation in respect of the property,

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

iii.  (subparagraph repealed);

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

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

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the fifth paragraph, a labour expenditure attributable to the preparation costs of the corporation in respect of the property,

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

iii.  (subparagraph repealed);

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

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

For the purposes of the definitions of “qualified labour expenditure attributable to printing costs” and “qualified labour expenditure attributable to preparation costs” in the first paragraph, the following rules apply:

(a)  in relation to a property referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.14, the definition of “qualified labour expenditure attributable to printing costs” is to be read, in respect of the property, as if “3331/3%” was replaced wherever it appears by “380.95%” and the definition of “qualified labour expenditure attributable to preparation costs” is to be read, in respect of the property, as if “250%” was replaced wherever it appears by “285.7143%”; and

(b)  in relation to a property referred to in subparagraph a.1 of the first paragraph of section 1029.8.36.0.0.14, the definition of “qualified labour expenditure attributable to printing costs” is to be read, in respect of the property, as if “3331/3%” was replaced wherever it appears by “370.37%” and the definition of “qualified labour expenditure attributable to preparation costs” is to be read, in respect of the property, as if “250%” was replaced wherever it appears by “285.7143%”.

2001, c. 51, s. 117; 2002, c. 9, s. 65; 2003, c. 9, s. 210; 2004, c. 21, s. 317; 2005, c. 23, s. 160; 2005, c. 38, s. 246; 2006, c. 13, s. 117; 2006, c. 36, s. 131; 2007, c. 12, s. 158; 2010, c. 5, s. 155.

2007-11-07

1029.8.36.0.0.13. In this division,

“eligible employee” of an individual, a corporation or a partnership, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out eligible preparation work or eligible printing work relating to the property;

“eligible group of works” for a taxation year means property that is a group of works in respect of which the corporation holds, for the year, a favourable advance ruling given or a certificate issued by the Société de développement des entreprises culturelles for the purposes of this division;

“eligible individual”, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out eligible preparation work or eligible printing work relating to the property;

“eligible preparation work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to publishing the property, from the initial stage to the stage preceding the production in print form of the eligible work or works that are part of the eligible group of works, including editing, design, research, art work, mock-up production, layout, typesetting and pre-press work;

“eligible printing work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to printing the property, which include the first printing of the eligible work or works that are part of the eligible group of works, first assembly and first binding;

“eligible work” for a taxation year means property that is a work published by a corporation, in respect of which the corporation holds, for the year, a favourable advance ruling or a certificate given or issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division;

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

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

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

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

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

“labour expenditure attributable to preparation costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth and fifth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the preparation of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible preparation work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the non-refundable advances directly attributable to the preparation of the property that are incurred by the corporation in the year pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that are paid by the corporation to a Québec author or a holder of the rights of a Québec author, except such advances paid to a holder of the rights of a Québec author for the acquisition of rights on the existing material;

(c)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible preparation work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the preparation of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the preparation of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the preparation of the eligible work or a work that is part of the eligible group of works, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the preparation of the work; and

(d)  half of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, half of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible preparation work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“labour expenditure attributable to printing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the third and fourth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the printing of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible printing work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible printing work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the printing of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the printing of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the printing of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the printing of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the printing of the eligible work or a work that is part of the eligible group of works, by an eligible individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the printing of the work; and

(c)  one-third of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, one-third of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible printing work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“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 book publishing business, that is a qualified business, and that, for the year, is a publishing house recognized by the Société de développement des entreprises culturelles;

“qualified labour expenditure attributable to preparation costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the preparation costs 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 c of the fifth 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the preparation of the property, up to 250% of the tax under Part III.1.0.5 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 attributable to the preparation costs 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 attributable to the preparation costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the preparation costs 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 c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to the preparation costs 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 ii of subparagraph c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in any of subparagraphs i to iv of paragraph c of the definition of “labour expenditure attributable to preparation costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the fifth paragraph, reduced the labour expenditure attributable to preparation costs 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 preparation costs directly attributable to the preparation of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the preparation costs of the corporation in respect of the preparation of the property for a taxation year preceding the year exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the preparation of the property, for a taxation year preceding the year;

“qualified labour expenditure attributable to printing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the printing costs 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 c of the third 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 subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the printing of the property, up to 3331/3% of the tax under Part III.1.0.5 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 attributable to the printing costs 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 attributable to the printing costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 3331/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the printing costs 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 c of the third paragraph, reduced that labour expenditure attributable to printing costs 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, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, on or before the corporation’s filing-due date for the year, in connection with a labour expenditure attributable to the printing costs 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 ii of subparagraph c of the third paragraph, reduced that labour expenditure attributable to printing costs for that preceding year, and

(3)  the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular 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 attributable to printing costs”, to the extent that the amount has not, under subparagraph iii of subparagraph c of the third paragraph, reduced the labour expenditure attributable to printing costs of the corporation for that preceding year in respect of the property; and

(b)  the amount by which

i.  331/3% of the amount by which the printing costs directly attributable to the printing of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the printing costs of the corporation in respect of the printing of the property for a taxation year preceding the year exceeds 3331/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the printing of the property, for a taxation year preceding the year;

“Québec author” means an individual who is an author or an individual who is the editor of an eligible work or a work that is part of an eligible group of works written by a team of contributors, and who was resident in Québec at the end of the calendar year preceding the calendar year in which the publishing work began, or was resident in Québec for at least five consecutive years prior to the beginning of the publishing work;

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

For the purposes of this section, the initial stage of publishing, in relation to an eligible work or an eligible group of works, means

(a)  if a publishing contract is entered into between a qualified corporation and the author or one of the authors of the eligible work or a work that is part of the eligible group of works,

i.  in the case of an eligible work, the time at which the qualified corporation enters into such a publishing contract with the author or one of the authors of the work, and

ii.  in the case of an eligible group of works, the time at which the qualified corporation enters into a first publishing contract with the author or one of the authors of a work of the group; and

(b)  in any other case, the date on which the qualified corporation files an application with the Société de développement des entreprises culturelles for an advance ruling in respect of the eligible work or the eligible group of works.

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

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the printing of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the printing 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 printing of the property;

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

(c)  the amount of the labour expenditure attributable to printing costs 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 to the salaries or wages described in paragraph a of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph b of that definition or to the consideration or the portion of the consideration described in paragraph c of that definition, that are included in that labour expenditure attributable to printing costs 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, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

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

For the purposes of the definitions of “labour expenditure attributable to preparation costs”, “labour expenditure attributable to printing costs”, “qualified labour expenditure attributable to preparation costs” and “qualified labour expenditure attributable to printing costs” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed; and

(b)  no expenditure may be taken into consideration in computing a labour expenditure attributable to printing costs or to preparation costs of a corporation for a taxation year in respect of a property that is an eligible work or an eligible group of works, or printing costs or preparation costs directly attributable to the printing or preparation of the property incurred before the end of the year, unless the expenditure is paid at the time the corporation first files with the Minister the prescribed form containing the prescribed information provided for in the first paragraph of section 1029.8.36.0.0.14 for that taxation year.

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

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the preparation of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the preparation 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 preparation of the property;

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

(c)  the amount of the labour expenditure attributable to preparation costs 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 to the salaries or wages described in paragraph a of that definition, to the advances described in paragraph b of that definition, to the portion of the remuneration described in any of subparagraphs i to iv of paragraph c of that definition or to the consideration or the portion of the consideration described in paragraph d of that definition, that are included in that labour expenditure attributable to preparation costs 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 c of that definition, the amount of any government assistance and non-government assistance that an eligible individual, a particular corporation or a partnership 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 particular corporation or the partnership, as the case may be, that are referred to in that subparagraph;

(d)  (subparagraph repealed);

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

For the purposes of this division, the printing costs directly attributable to the printing of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the printing costs, other than publishing fees and administration costs, incurred by the corporation for the first printing of the eligible work or of works that are part of the eligible group of works, the first assembly and the first binding; and

(b)   the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the printing of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the printing of the property.

For the purposes of this division, the preparation costs directly attributable to the preparation of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the preparation costs, other than publishing fees and administration costs, including non-refundable advances paid to the author or authors, editing, design, research, art work, mock-up production, layout, typesetting and pre-press costs; and

(b)  the publishing fees and administration costs pertaining to the property that are reasonable in the circumstances;

(c)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the preparation of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the preparation of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to printing costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the third paragraph, a labour expenditure attributable to the printing costs of the corporation in respect of the property,

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

iii.  (subparagraph repealed);

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

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

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs” 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 an eligible work or an eligible group of works, 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 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the fifth paragraph, a labour expenditure attributable to the preparation costs of the corporation in respect of the property,

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

iii.  (subparagraph repealed);

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

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

In the case of a property referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.14, the definition of “qualified labour expenditure attributable to printing costs” in the first paragraph shall be read, in respect of the property, with “3331/3%”, wherever it appears, replaced by “380.95%” and the definition of “qualified labour expenditure attributable to preparation costs” in the first paragraph shall be read, in respect of the property, with “250%”, wherever it appears, replaced by “285.7143%”.

2001, c. 51, s. 117; 2002, c. 9, s. 65; 2003, c. 9, s. 210; 2004, c. 21, s. 317; 2005, c. 23, s. 160; 2005, c. 38, s. 246; 2006, c. 13, s. 117; 2006, c. 36, s. 131; 2007, c. 12, s. 158.

2006-12-06

1029.8.36.0.0.13. In this division,

“eligible employee” of an individual, a corporation or a partnership, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out eligible preparation work or eligible printing work relating to the property;

“eligible group of works” for a taxation year means property that is a group of works in respect of which the corporation holds, for the year, a favourable advance ruling given or a certificate issued by the Société de développement des entreprises culturelles for the purposes of this division;

“eligible individual”, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out eligible preparation work or eligible printing work relating to the property;

“eligible preparation work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to publishing the property, from the initial stage to the stage preceding the production in print form of the eligible work or works that are part of the eligible group of works, including editing, design, research, art work, mock-up production, layout, typesetting and pre-press work;

“eligible printing work” in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to printing the property, which include the first printing of the eligible work or works that are part of the eligible group of works, first assembly and first binding;

“eligible work” for a taxation year means property that is a work published by a corporation, in respect of which the corporation holds, for the year, a favourable advance ruling or a certificate given or issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division;

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

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

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

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

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

“labour expenditure attributable to preparation costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth and fifth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the preparation of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible preparation work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the non-refundable advances directly attributable to the preparation of the property that are incurred by the corporation in the year pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that are paid by the corporation to a Québec author or a holder of the rights of a Québec author, except such advances paid to a holder of the rights of a Québec author for the acquisition of rights on the existing material;

(c)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible preparation work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the preparation of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the preparation of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the preparation of the eligible work or a work that is part of the eligible group of works, by an individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the preparation of the work; and

(d)  half of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, half of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible preparation work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“labour expenditure attributable to printing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the third and fourth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the printing of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible printing work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible printing work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the printing of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the printing of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the printing of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the printing of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the printing of the eligible work or a work that is part of the eligible group of works, by an individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the printing of the work; and

(c)  one-third of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, one-third of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible printing work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

“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 book publishing business, that is a qualified business, and that, for the year, is a publishing house recognized by the Société de développement des entreprises culturelles;

“qualified labour expenditure attributable to preparation costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the preparation costs of the corporation for the year in respect of the property,

(2)  any repayment made by the corporation in the year, pursuant to a legal obligation, of assistance referred to, in relation to the property, in subparagraph 1 of subparagraph ii or subparagraph c of the fifth paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance referred to in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the preparation of the property, up to 250% of the tax under Part III.1.0.5 that the corporation is required to pay in a taxation year preceding the year by reason of that subparagraph i, in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure attributable to the preparation costs 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 attributable to the preparation costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph 1 of subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the preparation costs of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, by virtue of subparagraph c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs for that preceding year, and

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

(b)  the amount by which

i.  50% of the amount by which the preparation costs directly attributable to the preparation of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the preparation costs of the corporation in respect of the preparation of the property for a taxation year preceding the year exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the preparation of the property, for a taxation year preceding the year;

“qualified labour expenditure attributable to printing costs” of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the printing costs of the corporation for the year in respect of the property,

(2)  any repayment made by the corporation in the year, pursuant to a legal obligation, of assistance referred to, in relation to the property, in subparagraph 1 of subparagraph ii or subparagraph c of the third paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance referred to in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the printing of the property, up to 333 1/3% of the tax under Part III.1.0.5 that the corporation is required to pay in a taxation year preceding the year by reason of that subparagraph i, in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure attributable to the printing costs 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 attributable to the printing costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 333 1/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph 1 of subparagraph  ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the printing costs of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, by virtue of subparagraph c of the third paragraph, reduced that labour expenditure attributable to printing costs for that preceding year, and

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

(b)  the amount by which

i.  33 1/3% of the amount by which the printing costs directly attributable to the printing of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the printing costs of the corporation in respect of the printing of the property for a taxation year preceding the year exceeds 333 1/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the printing of the property, for a taxation year preceding the year;

“Québec author” means an individual who is an author or an individual who is the editor of an eligible work or a work that is part of an eligible group of works written by a team of contributors, and who was resident in Québec at the end of the calendar year preceding the calendar year in which the publishing work began, or was resident in Québec for at least five consecutive years prior to the beginning of the publishing work;

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

For the purposes of this section, the initial stage of publishing, in relation to an eligible work or an eligible group of works, means

(a)  if a publishing contract is entered into between a qualified corporation and the author or one of the authors of the eligible work or a work that is part of the eligible group of works,

i.  in the case of an eligible work, the time at which the qualified corporation enters into such a publishing contract with the author or one of the authors of the work, and

ii.  in the case of an eligible group of works, the time at which the qualified corporation enters into a first publishing contract with the author or one of the authors of a work of the group; and

(b)  in any other case, the date on which the qualified corporation files an application with the Société de développement des entreprises culturelles for an advance ruling in respect of the eligible work or the eligible group of works.

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

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the printing of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the printing 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 printing of the property;

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

(c)   the amount of the labour expenditure attributable to printing costs of a corporation for a taxation year in respect of a property shall be reduced, where applicable, by the amount of any government assistance and non-government assistance attributable to each of the amounts described in paragraph a of that definition and in any of subparagraphs i to iv of paragraph b of that definition and to the portion of the amount described in paragraph c of that definition, where applicable, included in that labour expenditure attributable to printing costs of the corporation for the year, that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, up to each of those amounts or the portion of that amount, as the case may be;

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

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

For the purposes of the definitions of “labour expenditure attributable to preparation costs”, “labour expenditure attributable to printing costs”, “qualified labour expenditure attributable to preparation costs” and “qualified labour expenditure attributable to printing costs” in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed; and

(b)  no expenditure may be taken into consideration in computing a labour expenditure attributable to printing costs or to preparation costs of a corporation for a taxation year in respect of a property that is an eligible work or an eligible group of works, or printing costs or preparation costs directly attributable to the printing or preparation of the property incurred before the end of the year, unless the expenditure is paid at the time the corporation first files with the Minister the prescribed form containing the prescribed information provided for in the first paragraph of section 1029.8.36.0.0.14 for that taxation year.

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

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the preparation of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the preparation 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 preparation of the property;

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

(c)  the amount of the labour expenditure attributable to preparation costs of a corporation for a taxation year in respect of a property shall be reduced, where applicable, by the amount of any government assistance and non-government assistance attributable to each of the amounts described in paragraph a or b of that definition and in any of subparagraphs i to iv of paragraph c of that definition and to the portion of the amount described in paragraph d of that definition, where applicable, included in that labour expenditure attributable to preparation costs of the corporation for the year, that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, up to each of those amounts or the portion of that amount, as the case may be;

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

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

For the purposes of this division, the printing costs directly attributable to the printing of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the printing costs, other than publishing fees and administration costs, incurred by the corporation for the first printing of the eligible work or of works that are part of the eligible group of works, the first assembly and the first binding; and

(b)   the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the printing of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the printing of the property.

For the purposes of this division, the preparation costs directly attributable to the preparation of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the preparation costs, other than publishing fees and administration costs, including non-refundable advances paid to the author or authors, editing, design, research, art work, mock-up production, layout, typesetting and pre-press costs; and

(b)  the publishing fees and administration costs pertaining to the property that are reasonable in the circumstances;

(c)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the preparation of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the preparation of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to printing costs” in the first paragraph, and of subparagraph 1 of subparagraph i of paragraph b of that definition, an amount of assistance is deemed, in respect of a property that is an eligible work or an eligible group of works, to be repaid by a corporation in a taxation year, pursuant to a legal obligation, where that amount

(a)  reduced, for the purpose of computing the amount that the corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the third paragraph, a labour expenditure attributable to the printing costs of the corporation in respect of the property,

ii.  because of subparagraph 1 of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to printing costs” in the first paragraph, a qualified labour expenditure attributable to the printing costs of the corporation in respect of the property, or

iii.  because of subparagraph 1 of subparagraph i of paragraph b of the definition of “qualified labour expenditure attributable to printing costs” in the first paragraph, the printing costs of the corporation, in respect of the property, for the year or for a preceding taxation year;

(b)  was not received by the corporation; and

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

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs” in the first paragraph, and of subparagraph 1 of subparagraph i of paragraph b of that definition, an amount of assistance is deemed, in respect of a property that is an eligible work or an eligible group of works, to be repaid by a corporation in a taxation year, pursuant to a legal obligation, where that amount

(a)  reduced, for the purpose of computing the amount that the corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.14 in respect of the property,

i.  because of subparagraph c of the fifth paragraph, a labour expenditure attributable to the preparation costs of the corporation in respect of the property,

ii.  because of subparagraph 1 of subparagraph ii of paragraph a of the definition of “qualified labour expenditure attributable to preparation costs” in the first paragraph, a qualified labour expenditure attributable to the preparation costs of the corporation in respect of the property, or

iii.  because of subparagraph 1 of subparagraph i of paragraph b of the definition of “qualified labour expenditure attributable to preparation costs” in the first paragraph, the preparation costs of the corporation, in respect of the property, for the year or for a preceding taxation year;

(b)  was not received by the corporation; and

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

In the case of a property referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.14, the definition of “qualified labour expenditure attributable to printing costs” in the first paragraph shall be read, in respect of the property, with “333 1/3%”, wherever it appears, replaced by “380.95%” and the definition of “qualified labour expenditure attributable to preparation costs” in the first paragraph shall be read, in respect of the property, with “250%”, wherever it appears, replaced by “285.7143%”.

2001, c. 51, s. 117; 2002, c. 9, s. 65; 2003, c. 9, s. 210; 2004, c. 21, s. 317; 2005, c. 23, s. 160; 2005, c. 38, s. 246; 2006, c. 13, s. 117; 2006, c. 36, s. 131.

2006-06-13

1029.8.36.0.0.13. In this division,

"eligible employee" of an individual, a corporation or a partnership, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out eligible preparation work or eligible printing work relating to the property;

"eligible group of works" for a taxation year means property that is a group of works in respect of which the corporation holds, for the year, a favourable advance ruling given or a certificate issued by the Société de développement des entreprises culturelles for the purposes of this division;

"eligible individual", for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out eligible preparation work or eligible printing work relating to the property;

"eligible preparation work" in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to publishing the property, from the initial stage to the stage preceding the production in print form of the eligible work or works that are part of the eligible group of works, including editing, design, research, art work, mock-up production, layout, typesetting and pre-press work;

"eligible printing work" in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to printing the property, which include the first printing of the eligible work or works that are part of the eligible group of works, first assembly and first binding;

"eligible work" for a taxation year means property that is a work published by a corporation, in respect of which the corporation holds, for the year, a favourable advance ruling or a certificate given or issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division;

"excluded corporation" for a taxation year means a corporation that is

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

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

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

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

"labour expenditure attributable to preparation costs" of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth and fifth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the preparation of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible preparation work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the non-refundable advances directly attributable to the preparation of the property that are incurred by the corporation in the year pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that are paid by the corporation to a Québec author or a holder of the rights of a Québec author, except such advances paid to a holder of the rights of a Québec author for the acquisition of rights on the existing material;

(c)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible preparation work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the preparation of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the preparation of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the preparation of the eligible work or a work that is part of the eligible group of works, by an individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the preparation of the work; and

(d)  half of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, half of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible preparation work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

"labour expenditure attributable to printing costs" of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the third and fourth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the printing of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible printing work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible printing work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the printing of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the printing of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the printing of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the printing of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the printing of the eligible work or a work that is part of the eligible group of works, by an individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the printing of the work; and

(c)  one-third of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, one-third of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible printing work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

"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 book publishing business, that is a qualified business, and that, for the year, is a publishing house recognized by the Société de développement des entreprises culturelles;

"qualified labour expenditure attributable to preparation costs" of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the preparation costs of the corporation for the year in respect of the property,

(2)  any repayment made by the corporation in the year, pursuant to a legal obligation, of assistance referred to, in relation to the property, in subparagraph 1 of subparagraph ii or subparagraph c of the fifth paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance referred to in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the preparation of the property, up to 250% of the tax under Part III.1.0.5 that the corporation is required to pay in a taxation year preceding the year by reason of that subparagraph i, in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure attributable to the preparation costs 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 attributable to the preparation costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph 1 of subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the preparation costs of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, by virtue of subparagraph c of the fifth paragraph, reduced that labour expenditure attributable to preparation costs for that preceding year, and

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

(b)  the amount by which

i.  50% of the amount by which the preparation costs directly attributable to the preparation of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the preparation costs of the corporation in respect of the preparation of the property for a taxation year preceding the year exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the preparation of the property, for a taxation year preceding the year;

"qualified labour expenditure attributable to printing costs" of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the printing costs of the corporation for the year in respect of the property,

(2)  any repayment made by the corporation in the year, pursuant to a legal obligation, of assistance referred to, in relation to the property, in subparagraph 1 of subparagraph ii or subparagraph c of the third paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance referred to in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the printing of the property, up to 333 1/3% of the tax under Part III.1.0.5 that the corporation is required to pay in a taxation year preceding the year by reason of that subparagraph i, in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure attributable to the printing costs 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 attributable to the printing costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 333 1/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph 1 of subparagraph  ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the printing costs of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, by virtue of subparagraph c of the third paragraph, reduced that labour expenditure attributable to printing costs for that preceding year, and

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

(b)  the amount by which

i.  33 1/3% of the amount by which the printing costs directly attributable to the printing of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the printing costs of the corporation in respect of the printing of the property for a taxation year preceding the year exceeds 333 1/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the printing of the property, for a taxation year preceding the year;

"Québec author" means an individual who is an author or an individual who is the editor of an eligible work or a work that is part of an eligible group of works written by a team of contributors, and who was resident in Québec at the end of the calendar year preceding the calendar year in which the publishing work began, or was resident in Québec for at least five consecutive years prior to the beginning of the publishing work;

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

For the purposes of this section, the initial stage of publishing, in relation to an eligible work or an eligible group of works, means

(a)  if a publishing contract is entered into between a qualified corporation and the author or one of the authors of the eligible work or a work that is part of the eligible group of works,

i.  in the case of an eligible work, the time at which the qualified corporation enters into such a publishing contract with the author or one of the authors of the work, and

ii.  in the case of an eligible group of works, the time at which the qualified corporation enters into a first publishing contract with the author or one of the authors of a work of the group; and

(b)  in any other case, the date on which the qualified corporation files an application with the Société de développement des entreprises culturelles for an advance ruling in respect of the eligible work or the eligible group of works.

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

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the printing of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the printing 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 printing of the property;

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

(c)   the amount of the labour expenditure attributable to printing costs of a corporation for a taxation year in respect of a property shall be reduced, where applicable, by the amount of any government assistance and non-government assistance attributable to each of the amounts described in paragraph a of that definition and in any of subparagraphs i to iv of paragraph b of that definition and to the portion of the amount described in paragraph c of that definition, where applicable, included in that labour expenditure attributable to printing costs of the corporation for the year, that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, up to each of those amounts or the portion of that amount, as the case may be;

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

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

For the purposes of the definitions of "labour expenditure attributable to preparation costs", "labour expenditure attributable to printing costs", "qualified labour expenditure attributable to preparation costs" and "qualified labour expenditure attributable to printing costs" in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed; and

(b)  no expenditure may be taken into consideration in computing a labour expenditure attributable to printing costs or to preparation costs of a corporation for a taxation year in respect of a property that is an eligible work or an eligible group of works, or printing costs or preparation costs directly attributable to the printing or preparation of the property incurred before the end of the year, unless the expenditure is paid at the time the corporation first files with the Minister the prescribed form containing the prescribed information provided for in the first paragraph of section 1029.8.36.0.0.14 for that taxation year.

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

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the preparation of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the preparation 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 preparation of the property;

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

(c)  the amount of the labour expenditure attributable to preparation costs of a corporation for a taxation year in respect of a property shall be reduced, where applicable, by the amount of any government assistance and non-government assistance attributable to each of the amounts described in paragraph a or b of that definition and in any of subparagraphs i to iv of paragraph c of that definition and to the portion of the amount described in paragraph d of that definition, where applicable, included in that labour expenditure attributable to preparation costs of the corporation for the year, that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year, up to each of those amounts or the portion of that amount, as the case may be;

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

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

For the purposes of this division, the printing costs directly attributable to the printing of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the printing costs, other than publishing fees and administration costs, incurred by the corporation for the first printing of the eligible work or of works that are part of the eligible group of works, the first assembly and the first binding; and

(b)   the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the printing of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the printing of the property.

For the purposes of this division, the preparation costs directly attributable to the preparation of a property that is an eligible work or an eligible group of works incurred by a corporation before the end of a taxation year are

(a)  the preparation costs, other than publishing fees and administration costs, including non-refundable advances paid to the author or authors, editing, design, research, art work, mock-up production, layout, typesetting and pre-press costs; and

(b)  the publishing fees and administration costs pertaining to the property that are reasonable in the circumstances;

(c)  the portion of the cost of acquisition of a particular property, owned by the corporation and used by it as part of the preparation of the property, that is the portion of the depreciation of that particular property, for the year, determined in accordance with the generally accepted accounting principles, relating to the use of that particular property by the corporation in the year, as part of the preparation of the property.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of "qualified labour expenditure attributable to printing costs" in the first paragraph, and of subparagraph 1 of subparagraph i of paragraph b of that definition, an amount of assistance is deemed, in respect of a property that is an eligible work or an eligible group of works, to be repaid by a corporation in a taxation year, pursuant to a legal obligation, where that amount

(a)  reduced, for the purpose of computing the amount that the corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the third paragraph, a labour expenditure attributable to the printing costs of the corporation in respect of the property,

ii.  because of subparagraph 1 of subparagraph ii of paragraph a of the definition of "qualified labour expenditure attributable to printing costs" in the first paragraph, a qualified labour expenditure attributable to the printing costs of the corporation in respect of the property, or

iii.  because of subparagraph 1 of subparagraph i of paragraph b of the definition of "qualified labour expenditure attributable to printing costs" in the first paragraph, the printing costs of the corporation, in respect of the property, for the year or for a preceding taxation year;

(b)  was not received by the corporation; and

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

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of "qualified labour expenditure attributable to preparation costs" in the first paragraph, and of subparagraph 1 of subparagraph i of paragraph b of that definition, an amount of assistance is deemed, in respect of a property that is an eligible work or an eligible group of works, to be repaid by a corporation in a taxation year, pursuant to a legal obligation, where that amount

(a)  reduced, for the purpose of computing the amount that the corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.14 in respect of the property,

i.  because of subparagraph c of the fifth paragraph, a labour expenditure attributable to the preparation costs of the corporation in respect of the property,

ii.  because of subparagraph 1 of subparagraph ii of paragraph a of the definition of "qualified labour expenditure attributable to preparation costs" in the first paragraph, a qualified labour expenditure attributable to the preparation costs of the corporation in respect of the property, or

iii.  because of subparagraph 1 of subparagraph i of paragraph b of the definition of "qualified labour expenditure attributable to preparation costs" in the first paragraph, the preparation costs of the corporation, in respect of the property, for the year or for a preceding taxation year;

(b)  was not received by the corporation; and

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

In the case of a property referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.14, the definition of "qualified labour expenditure attributable to printing costs" in the first paragraph shall be read, in respect of the property, with "333 1/3%", wherever it appears, replaced by "380.95%" and the definition of "qualified labour expenditure attributable to preparation costs" in the first paragraph shall be read, in respect of the property, with "250%", wherever it appears, replaced by "285.7143%".

2001, c. 51, s. 117; 2002, c. 9, s. 65; 2003, c. 9, s. 210; 2004, c. 21, s. 317; 2005, c. 23, s. 160; 2005, c. 38, s. 246; 2006, c. 13, s. 117.

2006-03-01

1029.8.36.0.0.13. In this division,

"eligible employee" of an individual, a corporation or a partnership, for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out eligible preparation work or eligible printing work relating to the property;

"eligible group of works" for a taxation year means property that is a group of works in respect of which the corporation holds, for the year, a favourable advance ruling given or a certificate issued by the Société de développement des entreprises culturelles for the purposes of this division;

"eligible individual", for a taxation year, means, in respect of a property that is an eligible work or an eligible group of works, an individual resident in Québec at any time in the calendar year in which the individual carries out eligible preparation work or eligible printing work relating to the property;

"eligible preparation work" in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to publishing the property, from the initial stage to the stage preceding the production in print form of the eligible work or works that are part of the eligible group of works, including editing, design, research, art work, mock-up production, layout, typesetting and pre-press work;

"eligible printing work" in relation to a property that is an eligible work or an eligible group of works means the work to carry out the various stages related to printing the property, which include the first printing of the eligible work or works that are part of the eligible group of works, first assembly and first binding;

"eligible work" for a taxation year means property that is a work published by a corporation, in respect of which the corporation holds, for the year, a favourable advance ruling or a certificate given or issued, as the case may be, by the Société de développement des entreprises culturelles for the purposes of this division;

"excluded corporation" for a taxation year means a corporation that is

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

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

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

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

"labour expenditure attributable to preparation costs" of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth and fifth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the preparation of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible preparation work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the non-refundable advances directly attributable to the preparation of the property that are incurred by the corporation in the year pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that are paid by the corporation to a Québec author or a holder of the rights of a Québec author, except such advances paid to a holder of the rights of a Québec author for the acquisition of rights on the existing material;

(c)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible preparation work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the preparation of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the preparation of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the preparation of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the preparation of the eligible work or a work that is part of the eligible group of works, by an individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the preparation of the work; and

(d)  half of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, half of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible preparation work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

"labour expenditure attributable to printing costs" of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the third and fourth paragraphs, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances:

(a)  the salaries or wages directly attributable to the printing of the property that are incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the salaries or wages that are incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate, to the extent that they relate to services rendered in Québec for eligible printing work relating to the property before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation to its eligible employees;

(b)  the portion of the remuneration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, the portion of the remuneration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate for services rendered in Québec to the corporation for eligible printing work relating to the property pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation,

i.  to an eligible individual who carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services personally rendered in Québec by the eligible individual in connection with the printing of the eligible work or a work that is part of the eligible group of works, or to the wages of the individual’s eligible employees that relate to services rendered in Québec by the individual’s eligible employees in connection with the printing of the work,

ii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, other than a particular corporation referred to in subparagraph iii, to the extent that that portion of remuneration is reasonably attributable to the wages paid to the particular corporation’s eligible employees that relate to services rendered in Québec by the particular corporation’s eligible employees in connection with the printing of the eligible work or a work that is part of the eligible group of works,

iii.  to a particular corporation that has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, all the issued capital stock of which, other than directors’ qualifying shares, belongs to an eligible individual, and whose activities consist principally in providing the eligible individual’s services, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec by the eligible individual in connection with the printing of the eligible work or a work that is part of the eligible group of works, or

iv.  to a partnership that carries on a business in Québec, has an establishment in Québec and is not dealing at arm’s length with the corporation at the time the contract is entered into, to the extent that that portion of remuneration is reasonably attributable to services rendered in Québec in connection with the printing of the eligible work or a work that is part of the eligible group of works, by an individual who is a member of the partnership, or to the wages paid to the partnership’s eligible employees that relate to services rendered in Québec by the partnership’s eligible employees in connection with the printing of the work; and

(c)  one-third of the consideration, other than a salary or wages or a non-repayable advance, that is incurred by the corporation in the year and, if the year is the taxation year in which the corporation files an application for an advance ruling or, in the absence of such an application, an application for a certificate in respect of the property with the Société de développement des entreprises culturelles, one-third of the portion of the consideration that is incurred by the corporation in a year preceding the year in which the corporation filed the application for an advance ruling or a certificate pursuant to a contract entered into in respect of the eligible work or a work that is part of the eligible group of works, and that is paid by the corporation, for services rendered in Québec to the corporation for eligible printing work by an eligible individual or by a corporation or partnership having an establishment in Québec, other than an employee of the corporation, with which the corporation is dealing at arm’s length at the time the contract is entered into;

"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 book publishing business, that is a qualified business, and that, for the year, is a publishing house recognized by the Société de développement des entreprises culturelles;

"qualified labour expenditure attributable to preparation costs" of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the preparation costs of the corporation for the year in respect of the property,

(2)  any repayment made by the corporation in the year, pursuant to a legal obligation, of assistance referred to, in relation to the property, in subparagraph 1 of subparagraph ii or subparagraph c of the fifth paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance referred to in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the preparation of the property, up to 250% of the tax under Part III.1.0.5 that the corporation is required to pay in a taxation year preceding the year by reason of that subparagraph i, in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure attributable to the preparation costs 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 attributable to the preparation costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph 1 of subparagraph ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the preparation costs of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, by virtue of subparagraph c of the fourth paragraph, reduced that labour expenditure attributable to preparation costs for that preceding year, and

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

(b)  the amount by which

i.  50% of the amount by which the preparation costs directly attributable to the preparation of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the preparation costs of the corporation in respect of the preparation of the property for a taxation year preceding the year exceeds 250% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the preparation of the property, for a taxation year preceding the year;

"qualified labour expenditure attributable to printing costs" of a corporation for a taxation year, in respect of property that is an eligible work or an eligible group of works, means, subject to the fourth paragraph, the lesser of

(a)  the amount by which

i.  the aggregate of

(1)  the labour expenditure attributable to the printing costs of the corporation for the year in respect of the property,

(2)  any repayment made by the corporation in the year, pursuant to a legal obligation, of assistance referred to, in relation to the property, in subparagraph 1 of subparagraph ii or subparagraph c of the third paragraph in respect of a taxation year for which the corporation is a qualified corporation, or of any other assistance referred to in subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18 in relation to the printing of the property, up to 333 1/3% of the tax under Part III.1.0.5 that the corporation is required to pay in a taxation year preceding the year by reason of that subparagraph i, in relation to that assistance, and

(3)  the amount by which the aggregate of all amounts each of which is, for a taxation year preceding the year and in respect of the property, the labour expenditure attributable to the printing costs 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 attributable to the printing costs of the corporation in respect of the property for a taxation year preceding the year, exceeds 333 1/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5 for a year preceding the year, by reason of subparagraph i of subparagraph b of the first paragraph of section 1129.4.0.18, in relation to assistance referred to in subparagraph 1 of subparagraph  ii, exceeds

ii.  the aggregate of

(1)  the amount of any government assistance or 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, in relation to a labour expenditure attributable to the printing costs of the corporation for a taxation year preceding the year in respect of the property, to the extent that the amount has not, by virtue of subparagraph c of the third paragraph, reduced that labour expenditure attributable to printing costs for that preceding year, and

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

(b)  the amount by which

i.  33 1/3% of the amount by which the printing costs directly attributable to the printing of the property that the corporation incurred before the end of the year in respect of the property to the extent that they relate to services rendered before the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed 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 fourth paragraph, and that are paid by the corporation, exceeds the aggregate of

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

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

ii.  the amount by which the aggregate of all amounts each of which is the qualified labour expenditure attributable to the printing costs of the corporation in respect of the printing of the property for a taxation year preceding the year exceeds 333 1/3% of the aggregate of all amounts each of which is a tax that the corporation is required to pay under Part III.1.0.5, in respect of the printing of the property, for a taxation year preceding the year;

"Québec author" means an individual who is an author or an individual who is the editor of an eligible work or a work that is part of an eligible group of works written by a team of contributors, and who was resident in Québec at the end of the calendar year preceding the calendar year in which the publishing work began, or was resident in Québec for at least five consecutive years prior to the beginning of the publishing work;

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

For the purposes of this section, the initial stage of publishing, in relation to an eligible work or an eligible group of works, means

(a)  if a publishing contract is entered into between a qualified corporation and the author or one of the authors of the eligible work or a work that is part of the eligible group of works,

i.  in the case of an eligible work, the time at which the qualified corporation enters into such a publishing contract with the author or one of the authors of the work, and

ii.  in the case of an eligible group of works, the time at which the qualified corporation enters into a first publishing contract with the author or one of the authors of a work of the group; and

(b)  in any other case, the date on which the qualified corporation files an application with the Société de développement des entreprises culturelles for an advance ruling in respect of the eligible work or the eligible group of works.

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

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the printing of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the printing 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 printing of the property;

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

(c)  the amount of the labour expenditure attributable to the printing costs of a corporation for a taxation year in respect of a property shall be reduced, where applicable, by the amount of any government assistance or non-government assistance attributable to that expenditure, that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year;

(d)  the amount of the labour expenditure attributable to the printing costs of a corporation for a taxation year in respect of a property shall be reduced, where applicable, by the amount of any benefit or advantage attributable to that expenditure, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year; and

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

For the purposes of the definitions of "labour expenditure attributable to preparation costs", "labour expenditure attributable to printing costs", "qualified labour expenditure attributable to preparation costs" and "qualified labour expenditure attributable to printing costs" in the first paragraph, the following rules apply:

(a)  the date to which those definitions refer is the date that is 18 months after the end of the corporation’s fiscal period that includes the date on which the first printing of the eligible work or the last work that is part of the eligible group of works is completed; and

(b)  no expenditure may be taken into consideration in computing a labour expenditure attributable to printing costs or to preparation costs of a corporation for a taxation year in respect of a property that is an eligible work or an eligible group of works, or printing costs or preparation costs directly attributable to the printing or preparation of the property incurred before the end of the year, unless the expenditure is paid at the time the corporation first files with the Minister the prescribed form containing the prescribed information provided for in the first paragraph of section 1029.8.36.0.0.14 for that taxation year.

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

(a)  for the purposes of paragraph a of the definition, the salaries or wages directly attributable to the preparation of a property that is an eligible work or an eligible group of works are, where an employee directly undertakes, supervises or supports the preparation 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 preparation of the property;

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

(c)  the amount of the labour expenditure attributable to the preparation costs of a corporation for a taxation year in respect of a property shall be reduced, where applicable, by the amount of any government assistance or non-government assistance attributable to that expenditure, that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year;

(d)  the amount of the labour expenditure attributable to the preparation costs of a corporation for a taxation year in respect of a property shall be reduced, where applicable, by the amount of any benefit or advantage attributable to that expenditure, whether in the form of a reimbursement, compensation or guarantee, in the form of proceeds of disposition of property which exceed the fair market value of the property, or in any other form or manner, that the corporation has received, is entitled to receive or may reasonably expect to receive on or before the corporation’s filing-due date for the year; and

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

For the purposes of this division, the printing costs directly attributable to the printing of a property that is an eligible work or an eligible group of works incurred before the end of a taxation year are the costs, other than publishing fees and administration costs, incurred by the corporation for the first printing of the eligible work or works that are part of the eligible group of works, first assembly and first binding.

For the purposes of this division, the preparation costs directly attributable to the preparation of a property that is an eligible work or an eligible group of works incurred before the end of a taxation year are

(a)  the preparation costs, other than publishing fees and administration costs, including non-refundable advances paid to the author or authors, editing, design, research, art work, mock-up production, layout, typesetting and pre-press costs; and

(b)  the publishing fees and administration costs pertaining to the property that are reasonable in the circumstances.

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of "qualified labour expenditure attributable to printing costs" in the first paragraph, and of subparagraph 1 of subparagraph i of paragraph b of that definition, an amount of assistance is deemed, in respect of a property that is an eligible work or an eligible group of works, to be repaid by a corporation in a taxation year, pursuant to a legal obligation, where that amount

(a)  reduced, for the purpose of computing the amount that the corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.14, in respect of the property,

i.  because of subparagraph c of the third paragraph, a labour expenditure attributable to the printing costs of the corporation in respect of the property,

ii.  because of subparagraph 1 of subparagraph ii of paragraph a of the definition of "qualified labour expenditure attributable to printing costs" in the first paragraph, a qualified labour expenditure attributable to the printing costs of the corporation in respect of the property, or

iii.  because of subparagraph 1 of subparagraph i of paragraph b of the definition of "qualified labour expenditure attributable to printing costs" in the first paragraph, the printing costs of the corporation, in respect of the property, for the year or for a preceding taxation year;

(b)  was not received by the corporation; and

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

For the purposes of subparagraph 2 of subparagraph i of paragraph a of the definition of "qualified labour expenditure attributable to preparation costs" in the first paragraph, and of subparagraph 1 of subparagraph i of paragraph b of that definition, an amount of assistance is deemed, in respect of a property that is an eligible work or an eligible group of works, to be repaid by a corporation in a taxation year, pursuant to a legal obligation, where that amount

(a)  reduced, for the purpose of computing the amount that the corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.0.14 in respect of the property,

i.  because of subparagraph c of the fifth paragraph, a labour expenditure attributable to the preparation costs of the corporation in respect of the property,

ii.  because of subparagraph 1 of subparagraph ii of paragraph a of the definition of "qualified labour expenditure attributable to preparation costs" in the first paragraph, a qualified labour expenditure attributable to the preparation costs of the corporation in respect of the property, or

iii.  because of subparagraph 1 of subparagraph i of paragraph b of the definition of "qualified labour expenditure attributable to preparation costs" in the first paragraph, the preparation costs of the corporation, in respect of the property, for the year or for a preceding taxation year;

(b)  was not received by the corporation; and

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

In the case of a property referred to in subparagraph a of the first paragraph of section 1029.8.36.0.0.14, the definition of "qualified labour expenditure attributable to printing costs" in the first paragraph shall be read, in respect of the property, with "333 1/3%", wherever it appears, replaced by "380.95%" and the definition of "qualified labour expenditure attributable to preparation costs" in the first paragraph shall be read, in respect of the property, with "250%", wherever it appears, replaced by "285.7143%".

2001, c. 51, s. 117; 2002, c. 9, s. 65; 2003, c. 9, s. 210; 2004, c. 21, s. 317; 2005, c. 23, s. 160; 2005, c. 38, s. 246.