I-3 - Taxation Act

Section 1029.8.36.0.3.3 Disposition versions

2007-11-07

1029.8.36.0.3.3. (Repealed).

1999, c. 83, s. 198; 2000, c. 5, s. 258; 2000, c. 39, s. 150; 2001, c. 7, s. 146; 2001, c. 51, s. 119; 2001, c. 69, s. 12; 2005, c. 1, s. 235; 2007, c. 12, s. 160.

2006-03-01

1029.8.36.0.3.3. In this division,

“eligible production costs” of a corporation for a taxation year in respect of a property that is a multimedia title, means the aggregate of

(a)  the amount by which the production costs of the corporation for the year in respect of the property exceeds the aggregate of all amounts each of which is government assistance or non-government assistance attributable to the production 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 that year; and

(b)  any amount paid by the corporation in the year or a preceding taxation year, pursuant to a legal obligation, as repayment of assistance referred to in paragraph a in respect of the property;

“eligible production work” relating to a property that is a multimedia title means work to carry out the stages of production of the property during a period that begins at the beginning of the initial design and ends 24 months after the date of completion of the final version, including activities relating to the writing of the script for the property, the development of its interactive structure, the purchase and production of its component elements and its computer development, but does not include activities relating to mastering, media duplication, promotion, distribution or dissemination;

“labour expenditure” of a corporation for a taxation year in respect of a property that is a multimedia title means, subject to the second paragraph, the aggregate of the following amounts, to the extent that they are reasonable in the circumstances and included in the production cost, cost or capital cost, as the case may be, of the property:

(a)  the salaries or wages attributable to the property that are incurred and paid by the corporation, in respect of its employees of an establishment situated in Québec, for eligible production work relating to the property carried out in the year or a preceding taxation year;

(b)  the aggregate of all amounts each of which is the portion of the consideration paid by the corporation, under the terms of a contract, for eligible production work relating to the property that was carried out on its behalf in the year or a preceding taxation year to a person or partnership who or which carried out all or a part of the eligible production work and with whom or with which the corporation is not dealing at arm’s length at the time the contract is entered into, that may reasonably be attributed to the salaries or wages attributable to the property that the person or partnership incurred and paid in respect of the person’s or partnership’s employees of an establishment situated in Québec, or that could be so attributed if that person or partnership had such employees; and

(c)  the aggregate of all amounts each of which is one-half of the portion of the consideration paid by the corporation, under the terms of a contract, for eligible production work relating to the property, to a person or partnership with whom or with which the corporation is dealing at arm’s length at the time the contract is entered into, that may reasonably be attributed to the eligible production work carried out on its behalf in the year or a preceding taxation year by the employees of an establishment of that person or partnership situated in Québec, or that could be so attributed if that person or partnership had such employees;

“multimedia title” of a corporation means an organized set of numerical information in respect of which a certificate, a favourable advance ruling or a qualification certificate, as the case may be, has been given or issued to the corporation by Investissement Québec for the purposes of this division;

“production costs” of a corporation for a taxation year in respect of a property that is a multimedia title means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, other than an amount relating to management fees or administration costs and an amount included in the production cost, cost or capital cost, as the case may be, of the property to another corporation that is a qualified corporation, incurred by the corporation before the end of the year to carry out, in Québec, eligible production work relating to the property, to the extent that it is reasonable in the circumstances and included in the production cost, cost or capital cost, as the case may be, of the property to the corporation; and

(b)  the aggregate of all amounts, each of which is an amount incurred by the corporation before the end of the year in relation to production fees and administrative costs in connection with the property, to the extent that that aggregate does not exceed 20% of the qualified labour expenditure of the corporation for the year in respect of the property;

“qualified corporation” for a taxation year means a corporation that, in the year, has an establishment in Québec and carries on therein a business of producing multimedia titles that is a qualified business, but does not include

(a)  a corporation that holds, for the year, a final certificate referred to in the first paragraph of section 1029.8.36.0.3.19;

(b)  a corporation that is 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;

(d)  (paragraph repealed);

“qualified labour expenditure” of a corporation for a taxation year in respect of a property that is a multimedia title means the amount by which

(a)  the aggregate of

i.  the labour expenditure of the corporation for the year in respect of the property, and

ii.  any amount paid by the corporation in the year or a preceding taxation year, pursuant to a legal obligation, as repayment of assistance to the extent that the assistance, in the year or a preceding taxation year, reduced because of subparagraph d of the second paragraph a labour expenditure of the corporation in respect of the property; exceeds

(b)  the product obtained by multiplying the factor specified in the fourth paragraph in respect of the property by the aggregate of all amounts each of which is an amount deemed to have been paid to the Minister under section 1029.8.36.0.3.4 by the corporation, on account of its tax payable, in respect of the property for a preceding taxation year;

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

For the purposes of the definition of “labour expenditure” in the first paragraph,

(a)  the salaries or wages incurred by a person or a partnership in respect of an employee are attributable to a property only where the employee works directly in the carrying out of the eligible production work relating to the property and only to the extent that they may reasonably be considered to relate to the carrying out of the eligible production work in view of the time spent thereon by the employee and, in that respect, an employee who spends 90% or more of working time to carry out the eligible production work relating to the property is deemed to spend all working time thereon;

(b)  the consideration referred to in paragraph b or c of the definition does not include an amount paid by a corporation to another corporation to the extent that the amount may reasonably be attributed to eligible production work relating to a property that was carried out in a taxation year of that other corporation for which that other corporation holds a certificate referred to in the first paragraph of section 1029.8.36.0.3.19 issued to it by Investissement Québec for that year;

(c)  the amount of the salaries or wages incurred or of the portion of a consideration paid, as the case may be, does not include an expenditure that is included in the production cost of a property to a corporation and that is an amount otherwise included in the cost or capital cost of the property to another corporation that is a qualified corporation;

(d)  the amount of the salaries or wages incurred or of the portion of the consideration paid, as the case may be, of a labour expenditure 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 the salaries or wages or to the portion of the consideration, as the case may be, 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; and

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

For the purposes of subparagraph ii of paragraph a of the definition of “qualified labour expenditure” in the first paragraph and of paragraph b of the definition of “eligible production costs” in that first paragraph, an amount of assistance is deemed, in respect of a property that is a multimedia title, to be repaid by a qualified corporation in a taxation year, pursuant to a legal obligation, where that amount

(a)  reduced, for the purpose of computing the amount that the qualified corporation is deemed to have paid to the Minister for a taxation year under section 1029.8.36.0.3.4 in respect of the property,

i.  because of paragraph d of the second paragraph, the amount of the salaries or wages incurred or the portion of the consideration paid, as the case may be, of a labour expenditure of the qualified corporation in respect of the property, or

ii.  because of paragraph a of the definition of “eligible production costs” in the first paragraph, the eligible production costs of the qualified corporation in respect of the property;

(b)  was not received by the qualified corporation; and

(c)  ceased in the taxation year to be an amount that the qualified corporation may reasonably expect to receive.

The factor to which paragraph b of the definition of “qualified labour expenditure” in the first paragraph refers, in respect of a property, is

(a)  20/13, in the case where the certificate, favourable advance ruling or qualification certificate that was given or issued, as the case may be, in respect of the property by Investissement Québec certifies that the property is produced without having been ordered, is intended to be commercialized and is available in a French version; and

(b)  20/9, in any other case.

For the purposes of the definition of “eligible production work” in the first paragraph, the date of completion of the final version of a multimedia title is deemed to be the date indicated by Investissement Québec as the date on which the title begins to be distributed, on the certificate, favourable advance ruling or qualification certificate that was given or issued, as the case may be, in its respect.

1999, c. 83, s. 198; 2000, c. 5, s. 258; 2000, c. 39, s. 150; 2001, c. 7, s. 146; 2001, c. 51, s. 119; 2001, c. 69, s. 12; 2005, c. 1, s. 235.