I-3 - Taxation Act

Section 1029.8.36.0.3.55 Disposition versions

2021-06-04

1029.8.36.0.3.55. (Repealed).

2002, c. 9, s. 74; 2002, c. 40, s. 144; 2021, c. 18, s. 119.

2006-03-01

1029.8.36.0.3.55. Subject to sections 1029.8.36.0.3.53 and 1029.8.36.0.3.54, where, at a particular time in a particular calendar year, the activities carried on by a person or partnership, in this section referred to as the “vendor”, diminish or cease in relation to a particular business carried on by the vendor in Québec, and where it may reasonably be considered that, as a result, another person or partnership, in this section referred to as the “purchaser”, begins, after the particular time, to carry on similar activities in the course of carrying on such a business in Québec or increases, after that time, the scope of similar activities carried on in the course of carrying on such a business, for the purposes of section 1029.8.36.0.3.50, the following rules apply, subject to the third, fourth and fifth paragraphs:

(a)  the aggregate of all amounts each of which is the wages paid by the vendor in the vendor’s base calendar year to an employee who reports for work at an establishment of the employer situated in Québec in relation to the particular business is deemed to be equal, at any time after the particular time, to the amount by which that aggregate otherwise determined exceeds the amount determined by the formula

A × B × C;

(b)  the purchaser is deemed

i.  to have paid to an employee who reports for work at an establishment of the employer situated in Québec, in a period within the particular calendar year, an amount equal to the proportion of the aggregate of all amounts each of which is the wages paid by the vendor to such an employee, to the extent that the employee may reasonably be considered to have been assigned to the carrying on of the part of the activities that diminished or ceased at the particular time, that the number of days in the particular calendar year which precede the particular time is of the number of days in the particular calendar year which precede the particular time and during which the vendor carried on those activities, and

ii.  to have paid in respect of the aggregate of all amounts each of which is the wages paid in the purchaser’s base calendar year to an employee who reported for work at an establishment of the employer situated in Québec in relation to the particular business, an amount equal to the aggregate of

(1)  the aggregate of all amounts each of which is the wages paid by the purchaser in the purchaser’s base calendar year, otherwise determined, to an employee who reported for work at an establishment of the employer situated in Québec in relation to the particular business,

(2)  an amount equal to the proportion of the aggregate of all amounts each of which is the wages paid by the vendor to an employee in the part of the particular calendar year preceding the particular time, to the extent that the wages may reasonably be considered to relate to the carrying on by the employee of the part of the activities that diminished or ceased at the particular time, that the number of days in the particular calendar year which precede the particular time is of the number of days in the particular calendar year which precede the particular time and during which the vendor carried on those activities, and

(3)  the aggregate of all amounts each of which is the wages paid by the purchaser to an employee, in the part of the calendar year following the particular time, to the extent that the wages may reasonably be considered to relate to the carrying on by the employee of the part of the activities that began or increased at the particular time.

In the formula provided for in subparagraph a of the first paragraph,

(a)  A is the aggregate of all amounts each of which is the wages paid by the vendor in the vendor’s base calendar year to an employee who reports for work at an establishment of the employer situated in Québec in relation to the particular business;

(b)  B is the proportion that the number of the vendor’s employees referred to in subparagraph a who are assigned to the part of the activities that diminished or ceased at the particular time is of the number of the vendor’s employees referred to in subparagraph a immediately before the particular time; and

(c)  C is the proportion that the number of days in the particular calendar year following the particular time is of 365.

Where a person or a partnership is, at any time in a calendar year, a purchaser in relation to activities carried on by a person or partnership and, at a subsequent time in the same calendar year, that person or partnership is a vendor in relation to all of those activities, this section does not apply to the person or partnership either as vendor or as purchaser in respect of the activities and, for the purposes of section 1029.8.36.0.3.50, the person or partnership is deemed to have paid, from that time to the subsequent time, no portion of the wages that may reasonably be considered to relate to the employees of the person or partnership assigned to the carrying on of the activities that ceased after the subsequent time.

Where a person or partnership is, at a particular time in a calendar year, a purchaser in relation to activities carried on by another person or partnership and, at a subsequent time in the same calendar year, the person or partnership is a vendor in relation to part of those activities, for the purposes of section 1029.8.36.0.3.50 and for the purpose of determining the amount that the person or partnership is deemed to have paid under subparagraphs i and ii of subparagraph b of the first paragraph, the following rules apply:

(a)  the person’s or partnership’s employees are deemed to have been paid by the person or partnership only the portion of the wages that may reasonably be considered to have been paid to the employees assigned to the part of the activities that the person or partnership continues to carry on after that subsequent time; and

(b)  the other person’s or partnership’s employees are deemed to have been paid by the other person or partnership only the portion of the wages that may reasonably be considered to have been paid to the employees assigned to the part of the activities that the other person or partnership continues to carry on after that subsequent time.

Where, at a particular time in a particular calendar year that ends in one of the first four years of operation of a corporation, the corporation or, as the case may be, an associated employer of the corporation at the end of a calendar year is a purchaser in relation to activities carried on by a person or partnership, this section does not apply to the corporation or the associated employer of the corporation, as purchaser, or to the person or partnership, as vendor, in respect of the activities and, for the purposes of section 1029.8.36.0.3.50, the corporation or, as the case may be, the associated employer of the corporation at the end of the calendar year is deemed to have paid, in the base calendar year, no portion of the wages that may reasonably be considered to relate to the employees of the person or partnership assigned to the carrying on of the activities.

For the purposes of the fifth paragraph, a reference to a calendar year ending in a year of operation includes a reference to a calendar year ending coincidentally with that of the year of operation.

2002, c. 9, s. 74; 2002, c. 40, s. 144.