I-3 - Taxation Act

Section 737.18.17.12 Disposition versions

2024-05-07

737.18.17.12. Where, at any time in a particular taxation year or fiscal period, a corporation or a partnership (in this section referred to as the “acquirer”) acquired all or substantially all of a recognized business from another corporation or partnership (in this section referred to as the “vendor”) in relation to a large investment project, and the Minister of Finance previously authorized the transfer of the carrying out of the large investment project to the acquirer, according to a qualification certificate issued by that Minister to the acquirer in respect of the project, the vendor and the acquirer shall, subject to the third paragraph, enter into an agreement under which an amount in respect of the vendor’s tax assistance limit in relation to the project is transferred to the acquirer, which amount must not be greater than the amount by which the limit, determined in accordance with the second paragraph, exceeds,

(a)  where the vendor is a corporation, the total of

i.  the aggregate of all amounts each of which is, for a preceding taxation year, in relation to the large investment project, equal to the amount determined by the formula

A × B × C, and

ii.  the aggregate of all amounts each of which is either the vendor’s contribution exemption amount, for a preceding taxation year, in respect of the large investment project, determined in accordance with the second paragraph of section 34.1.0.3 of the Act respecting the Régie de l’assurance maladie du Québec (chapter R-5), or, for a preceding taxation year to which the computation method election in relation to the project applies, the amount determined by the formula

H × I; or

(b)  where the vendor is a partnership, the total of

i.  the aggregate of all amounts each of which is the amount agreed on, in respect of a preceding fiscal period of the vendor, in relation to the large investment project, pursuant to an agreement referred to in section 737.18.17.10 or 737.18.17.10.1 in respect of that fiscal period, and

ii.  the aggregate of all amounts each of which is either the vendor’s contribution exemption amount, for a preceding fiscal period, in respect of the large investment project, determined in accordance with the second paragraph of section 34.1.0.3 of the Act respecting the Régie de l’assurance maladie du Québec, or, for a preceding fiscal period to which the computation method election in relation to the project applies, the amount determined by the formula

H × I.

A vendor’s tax assistance limit in relation to a large investment project is 15% of its total qualified capital investments on the date of the end of the start-up period of the large investment project or, if it is earlier, on the day that includes the time referred to in the first paragraph, unless the vendor acquired all or substantially all of the recognized business in relation to the project following a previous transfer, in which case it is the amount, subject to the ninth paragraph, that was transferred to the vendor pursuant to the agreement referred to in this section in respect of the acquisition.

Where the recognized business referred to in the first paragraph is operated by the vendor in relation to a deemed large investment project within the meaning of section 737.18.17.1.1, the vendor and the acquirer shall, for the purpose of determining, in accordance with section 737.18.17.8 or section 34.1.0.4 of the Act respecting the Régie de l’assurance maladie du Québec, the acquirer’s tax assistance limit in relation to the deemed large investment project, agree on one or more of the following amounts in the agreement referred to in the first paragraph:

(a)  where the time referred to in the first paragraph is before the date of the beginning of the tax-free period in respect of the second large investment project, an amount in respect of the vendor’s tax assistance limit in relation to the first large investment project, which amount must not be greater than the amount determined by the formula

D − F;

(b)  where the time referred to in the first paragraph is included in the 15-year period that begins on the date of the beginning of the tax-free period in respect of the second large investment project, but is not after the last day of the tax-free period in respect of the first large investment project, a first amount in respect of the vendor’s tax assistance limit in relation to the first large investment project, which amount may be equal to zero, and a second amount in respect of the vendor’s tax assistance limit in relation to the second large investment project, subject to the total of those amounts not being greater than the amount determined by the formula

(D + E) − F; or

(c)  in any other case, an amount in respect of the vendor’s tax assistance limit in relation to the second large investment project, which amount must not be greater than the amount determined by the formula

(D + E) − (F + G).

In the formulas in the first and third paragraphs, 

(a)  A is 1, unless the vendor has an establishment situated outside Québec for the preceding year, in which case it is the proportion that the vendor’s business carried on in Québec is of the aggregate of its business carried on in Canada or in Québec and elsewhere, as determined under subsection 2 of section 771 for that preceding year;

(b)  B is, subject to the seventh and eighth paragraphs, the aggregate of

i.  the product obtained by multiplying the rate determined in respect of the corporation for the year in accordance with the sixth paragraph by the amount by which the amount that would be determined in respect of the vendor for the preceding year under section 771.2.1.2 if no reference were made to section 771.2.5.1 and if, for the purposes of paragraph b of section 771.2.1.2, its taxable income for the preceding year were computed without reference to section 737.18.17.5, exceeds the amount determined in its respect for the preceding year under section 771.2.1.2, and

ii.  the product obtained by multiplying the basic rate determined for the preceding year in respect of the vendor under section 771.0.2.3.1 by the amount by which the amount that the vendor deducts in computing its taxable income for the preceding year under section 737.18.17.5 exceeds the excess amount determined under subparagraph i;

(c)  C is

i.  where the computation method election in relation to the large investment project does not apply to the preceding year, the proportion that the vendor’s tax exemption amount for the preceding year in respect of the project, determined in accordance with the second paragraph of section 737.18.17.6, is of the aggregate of all amounts each of which is the vendor’s tax exemption amount for the preceding year, determined in accordance with that second paragraph, in respect of a large investment project of the vendor, or of a partnership of which it is a member, that is referred to in the first paragraph of section 737.18.17.5 for that year, or

ii.  where the computation method election in relation to the large investment project applies to the preceding year, the proportion that the vendor’s maximum annual tax exemption amount for the preceding year, in relation to the large investment project, is of the aggregate of all amounts each of which is the vendor’s maximum annual tax exemption amount for the preceding year, in relation to a large investment project of the vendor, or of a partnership of which it is a member, that is referred to in the first paragraph of section 737.18.17.5 for that year;

(d)  D is the vendor’s tax assistance limit in relation to the first large investment project;

(e)  E is the vendor’s tax assistance limit in relation to the second large investment project;

(f)  F is the amount determined in respect of the deemed large investment project in accordance with subparagraph a or b of the first paragraph for the particular taxation year or fiscal period, as the case may be;

(g)  G is the amount by which the vendor’s tax assistance limit in relation to the first large investment project exceeds the amount determined in respect of the deemed large investment project in accordance with subparagraph a or b of the first paragraph for the vendor’s taxation year or fiscal period that includes the last day of the tax-free period in respect of the first large investment project;

(h)  H is the aggregate of the amounts that are not payable by the vendor, for the preceding taxation year or fiscal period, under subparagraph ii of subparagraph d.1 of the sixth paragraph of section 34 of the Act respecting the Régie de l’assurance maladie du Québec; and

(i)  I is the proportion that the vendor’s maximum annual contribution exemption amount for the preceding taxation year or fiscal period, in relation to the large investment project, is of the aggregate of all amounts each of which is the vendor’s maximum annual contribution exemption amount for the preceding year or fiscal period, in relation to a large investment project of the vendor that is referred to in subparagraph d.1 of the sixth paragraph of section 34 of the Act respecting the Régie de l’assurance maladie du Québec for that year or fiscal period.

For the purpose of determining the amount referred to in subparagraph i of subparagraph a of the first paragraph for any preceding taxation year for which section 733.0.5.1 applies to the vendor, subparagraph b of the fourth paragraph is to be read as if

(a)  the amount that is deducted by the vendor in computing its taxable income for the preceding year under section 737.18.17.5 were increased by the amount by which its non-capital loss for the preceding year exceeds the amount that would be that loss if it were determined without reference to section 733.0.5.1; and

(b)  the vendor’s taxable income for the preceding year, determined without reference to section 737.18.17.5, were equal to the amount that, but for section 737.18.17.6, would be determined in its respect for the preceding year under section 737.18.17.5.

The rate to which subparagraph i of subparagraph b of the fourth paragraph refers in respect of a corporation for a taxation year is equal to the amount by which the basic rate determined for the year in respect of the corporation under section 771.0.2.3.1 exceeds the percentage determined for the year in its respect under subparagraph c of the first paragraph of section 771.0.2.4.

Where the corporation is a manufacturing corporation, within the meaning assigned by the first paragraph of section 771.1, to which paragraph d.3 of subsection 1 of section 771 applies for the preceding taxation year, this section, as it reads in its application to a taxation year that begins before 1 January 2017, is to be read as if “8% of” in subparagraph i of subparagraph b of the third paragraph were replaced by “the product obtained by multiplying the difference between the basic rate determined for the preceding year in respect of the vendor under section 771.0.2.3.1 and the percentage determined for the preceding year in its respect under section 771.0.2.5 by

Where the corporation is a primary and manufacturing sectors corporation, within the meaning assigned by the first paragraph of section 771.1, to which paragraph d.4 of subsection 1 of section 771 applies for the preceding taxation year, the sixth paragraph is to be read as if “subparagraph c of the first paragraph of section 771.0.2.4” were replaced by “section 771.0.2.6”.

Where the previous transfer to which the second paragraph refers occurred before the date of the end of the start-up period of the large investment project concerned, the vendor’s tax assistance limit in relation to the project is to be increased by an amount equal to the product obtained by multiplying by 15% the amount that would be its total qualified capital investments on the date of the end of the start-up period or, if it is earlier, on the day that includes the time referred to in the first paragraph, if the definition of “total qualified capital investments” in the first paragraph of section 737.18.17.1 were read as if “from the beginning of the carrying out of the large investment project” were replaced by “from the time the corporation or partnership acquired the recognized business in relation to the large investment project”.

2015, c. 21, s. 260; 2017, c. 1, s. 185; 2019, c. 14, s. 205; 2021, c. 36, s. 76; 2024, c. 11, s. 70.

2021-12-10

737.18.17.12. Where, at any time in a particular taxation year or fiscal period, a corporation or a partnership, as the case may be, (in this section referred to as the “acquirer”) acquired all or substantially all of a recognized business from another corporation or partnership (in this section referred to as the “vendor”) in relation to a large investment project, and the Minister of Finance previously authorized the transfer of the carrying out of the large investment project to the acquirer, according to a qualification certificate issued by that Minister to the acquirer in respect of the project, the vendor and the acquirer shall, subject to the third paragraph, enter into an agreement under which an amount in respect of the vendor’s tax assistance limit in relation to the project is transferred to the acquirer, which amount must not be greater than the amount by which the limit, determined in accordance with the second paragraph, exceeds,

(a)  where the vendor is a corporation, the total of

i.  the aggregate of all amounts each of which is, for a preceding taxation year, equal to the amount determined by the formula

A × B × C, and

ii.  the aggregate of all amounts each of which is the vendor’s contribution exemption amount, for a preceding taxation year, in respect of the large investment project, determined in accordance with the second paragraph of section 34.1.0.3 of the Act respecting the Régie de l’assurance maladie du Québec (chapter R-5); or

(b)  where the vendor is a partnership, the total of

i.  the aggregate of all amounts each of which is the amount agreed on, in respect of a preceding fiscal period of the vendor, in relation to the large investment project, pursuant to an agreement referred to in section 737.18.17.10 in respect of the fiscal period, and

ii.  the aggregate of all amounts each of which is the vendor’s contribution exemption amount, for a preceding fiscal period, in respect of the large investment project, determined in accordance with the second paragraph of section 34.1.0.3 of the Act respecting the Régie de l’assurance maladie du Québec.

A vendor’s tax assistance limit in relation to a large investment project is 15% of its total qualified capital investments on the date of the end of the start-up period of the large investment project or, if it is earlier, on the day that includes the time referred to in the first paragraph, unless the vendor acquired all or substantially all of the recognized business in relation to the project following a previous transfer, in which case it is the amount, subject to the ninth paragraph, that was transferred to the vendor pursuant to the agreement referred to in this section in respect of the acquisition.

Where the recognized business referred to in the first paragraph is operated by the vendor in relation to a deemed large investment project within the meaning of section 737.18.17.1.1, the vendor and the acquirer shall, for the purpose of determining, in accordance with section 737.18.17.8 or section 34.1.0.4 of the Act respecting the Régie de l’assurance maladie du Québec (chapter R-5), the acquirer’s tax assistance limit in relation to the deemed large investment project, agree on one or more of the following amounts in the agreement referred to in the first paragraph:

(a)  where the time referred to in the first paragraph is before the date of the beginning of the tax-free period in respect of the second large investment project, an amount in respect of the vendor’s tax assistance limit in relation to the first large investment project, which amount must not be greater than the amount determined by the formula

D − F;

(b)  where the time referred to in the first paragraph is included in the 15-year period that begins on the date of the beginning of the tax-free period in respect of the second large investment project, but is not after the last day of the tax-free period in respect of the first large investment project, a first amount in respect of the vendor’s tax assistance limit in relation to the first large investment project, which amount may be equal to zero, and a second amount in respect of the vendor’s tax assistance limit in relation to the second large investment project, subject to the total of those amounts not being greater than the amount determined by the formula

(D + E) − F; or

(c)  in any other case, an amount in respect of the vendor’s tax assistance limit in relation to the second large investment project, which amount must not be greater than the amount determined by the formula

(D + E) − (F + G).

In the formulas in the first and third paragraphs, 

(a)  A is 1, unless the vendor has an establishment situated outside Québec for the preceding year, in which case it is the proportion that the vendor’s business carried on in Québec is of the aggregate of its business carried on in Canada or in Québec and elsewhere, as determined under subsection 2 of section 771 for that preceding year;

(b)  B is, subject to the seventh and eighth paragraphs, the aggregate of

i.  the product obtained by multiplying the rate determined in respect of the corporation for the year in accordance with the sixth paragraph by the amount by which the amount that would be determined in respect of the vendor for the preceding year under section 771.2.1.2 if no reference were made to section 771.2.5.1 and if, for the purposes of paragraph b of section 771.2.1.2, its taxable income for the preceding year were computed without reference to section 737.18.17.5, exceeds the amount determined in its respect for the preceding year under section 771.2.1.2, and

ii.  the product obtained by multiplying the basic rate determined for the preceding year in respect of the vendor under section 771.0.2.3.1 by the amount by which the amount that the vendor deducts in computing its taxable income for the preceding year under section 737.18.17.5 exceeds the excess amount determined under subparagraph i; and

(c)  C is the proportion that the vendor’s tax exemption amount for the preceding year in respect of the large investment project, determined in accordance with the second paragraph of section 737.18.17.6, is of the aggregate of all amounts each of which is the vendor’s tax exemption amount for the preceding year, determined in accordance with that second paragraph, in respect of a large investment project of the vendor, or of a partnership of which it is a member, that is referred to in the first paragraph of section 737.18.17.5 for that preceding year;

(d)  D is the vendor’s tax assistance limit in relation to the first large investment project;

(e)  E is the vendor’s tax assistance limit in relation to the second large investment project;

(f)  F is the amount determined in respect of the deemed large investment project in accordance with subparagraph a or b of the first paragraph for the particular taxation year or fiscal period, as the case may be; and

(g)  G is the amount by which the vendor’s tax assistance limit in relation to the first large investment project exceeds the amount determined in respect of the deemed large investment project in accordance with subparagraph a or b of the first paragraph for the vendor’s taxation year or fiscal period that includes the last day of the tax-free period in respect of the first large investment project.

For the purpose of determining the amount referred to in subparagraph i of subparagraph a of the first paragraph for any preceding taxation year for which section 733.0.5.1 applies to the vendor, subparagraph b of the fourth paragraph is to be read as if

(a)  the amount that is deducted by the vendor in computing its taxable income for the preceding year under section 737.18.17.5 were increased by the amount by which its non-capital loss for the preceding year exceeds the amount that would be that loss if it were determined without reference to section 733.0.5.1; and

(b)  the vendor’s taxable income for the preceding year, determined without reference to section 737.18.17.5, were equal to the amount that, but for section 737.18.17.6, would be determined in its respect for the preceding year under section 737.18.17.5.

The rate to which subparagraph i of subparagraph b of the fourth paragraph refers in respect of a corporation for a taxation year is equal to the amount by which the basic rate determined for the year in respect of the corporation under section 771.0.2.3.1 exceeds the percentage determined for the year in its respect under subparagraph c of the first paragraph of section 771.0.2.4.

Where the corporation is a manufacturing corporation, within the meaning assigned by the first paragraph of section 771.1, to which paragraph d.3 of subsection 1 of section 771 applies for the preceding taxation year, this section, as it reads in its application to a taxation year that begins before 1 January 2017, is to be read as if “8% of” in subparagraph i of subparagraph b of the third paragraph were replaced by “the product obtained by multiplying the difference between the basic rate determined for the preceding year in respect of the vendor under section 771.0.2.3.1 and the percentage determined for the preceding year in its respect under section 771.0.2.5 by

Where the corporation is a primary and manufacturing sectors corporation, within the meaning assigned by the first paragraph of section 771.1, to which paragraph d.4 of subsection 1 of section 771 applies for the preceding taxation year, the sixth paragraph is to be read as if “subparagraph c of the first paragraph of section 771.0.2.4” were replaced by “section 771.0.2.6”.

Where the previous transfer to which the second paragraph refers occurred before the date of the end of the start-up period of the large investment project concerned, the vendor’s tax assistance limit in relation to the project is to be increased by an amount equal to the product obtained by multiplying by 15% the amount that would be its total qualified capital investments on the date of the end of the start-up period or, if it is earlier, on the day that includes the time referred to in the first paragraph, if the definition of “total qualified capital investments” in the first paragraph of section 737.18.17.1 were read as if “from the beginning of the carrying out of the large investment project” were replaced by “from the time the corporation or partnership acquired the recognized business in relation to the large investment project”.

2015, c. 21, s. 260; 2017, c. 1, s. 185; 2019, c. 14, s. 205; 2021, c. 36, s. 76.

2019-06-19

737.18.17.12. Where, at any time in a particular taxation year or fiscal period, a corporation or a partnership, as the case may be, (in this section referred to as the “acquirer”) acquired all or substantially all of a recognized business from another corporation or partnership (in this section referred to as the “vendor”) in relation to a large investment project, and the Minister of Finance previously authorized the transfer of the carrying out of the large investment project to the acquirer, according to a qualification certificate issued by that Minister to the acquirer in respect of the project, the vendor and the acquirer shall, subject to the third paragraph, enter into an agreement under which an amount in respect of the vendor’s tax assistance limit in relation to the project is transferred to the acquirer, which amount must not be greater than the amount by which the limit, determined in accordance with the second paragraph, exceeds,

(a)  where the vendor is a corporation, the total of

i.  the aggregate of all amounts each of which is, for a preceding taxation year, equal to the amount determined by the formula

A × B × C, and

ii.  the aggregate of all amounts each of which is the vendor’s contribution exemption amount, for a preceding taxation year, in respect of the large investment project, determined in accordance with the second paragraph of section 34.1.0.3 of the Act respecting the Régie de l’assurance maladie du Québec (chapter R-5); or

(b)  where the vendor is a partnership, the total of

i.  the aggregate of all amounts each of which is the amount agreed on, in respect of a preceding fiscal period of the vendor, in relation to the large investment project, pursuant to an agreement referred to in section 737.18.17.10 in respect of the fiscal period, and

ii.  the aggregate of all amounts each of which is the vendor’s contribution exemption amount, for a preceding fiscal period, in respect of the large investment project, determined in accordance with the second paragraph of section 34.1.0.3 of the Act respecting the Régie de l’assurance maladie du Québec.

A vendor’s tax assistance limit in relation to a large investment project is 15% of its total qualified capital investments on the date of the beginning of the tax-free period in respect of the large investment project, unless the vendor acquired all or substantially all of the recognized business in relation to the project following a previous transfer, in which case it is the amount that was transferred to the vendor pursuant to the agreement referred to in this section in respect of the acquisition.

Where the recognized business referred to in the first paragraph is operated by the vendor in relation to a deemed large investment project within the meaning of section 737.18.17.1.1, the vendor and the acquirer shall, for the purpose of determining, in accordance with section 737.18.17.8 or section 34.1.0.4 of the Act respecting the Régie de l’assurance maladie du Québec (chapter R-5), the acquirer’s tax assistance limit in relation to the deemed large investment project, agree on one or more of the following amounts in the agreement referred to in the first paragraph:

(a)  where the time referred to in the first paragraph is before the date of the beginning of the tax-free period in respect of the second large investment project, an amount in respect of the vendor’s tax assistance limit in relation to the first large investment project, which amount must not be greater than the amount determined by the formula

D − F;

(b)  where the time referred to in the first paragraph is included in the 15-year period that begins on the date of the beginning of the tax-free period in respect of the second large investment project, but is not after the last day of the tax-free period in respect of the first large investment project, a first amount in respect of the vendor’s tax assistance limit in relation to the first large investment project, which amount may be equal to zero, and a second amount in respect of the vendor’s tax assistance limit in relation to the second large investment project, subject to the total of those amounts not being greater than the amount determined by the formula

(D + E) − F; or

(c)  in any other case, an amount in respect of the vendor’s tax assistance limit in relation to the second large investment project, which amount must not be greater than the amount determined by the formula

(D + E) − (F + G).

In the formulas in the first and third paragraphs, 

(a)  A is 1, unless the vendor has an establishment situated outside Québec for the preceding year, in which case it is the proportion that the vendor’s business carried on in Québec is of the aggregate of its business carried on in Canada or in Québec and elsewhere, as determined under subsection 2 of section 771 for that preceding year;

(b)  B is, subject to the seventh and eighth paragraphs, the aggregate of

i.  the product obtained by multiplying the rate determined in respect of the corporation for the year in accordance with the sixth paragraph by the amount by which the amount that would be determined in respect of the vendor for the preceding year under section 771.2.1.2 if no reference were made to section 771.2.5.1 and if, for the purposes of paragraph b of section 771.2.1.2, its taxable income for the preceding year were computed without reference to section 737.18.17.5, exceeds the amount determined in its respect for the preceding year under section 771.2.1.2, and

ii.  the product obtained by multiplying the basic rate determined for the preceding year in respect of the vendor under section 771.0.2.3.1 by the amount by which the amount that the vendor deducts in computing its taxable income for the preceding year under section 737.18.17.5 exceeds the excess amount determined under subparagraph i; and

(c)  C is the proportion that the vendor’s tax exemption amount for the preceding year in respect of the large investment project, determined in accordance with the second paragraph of section 737.18.17.6, is of the aggregate of all amounts each of which is the vendor’s tax exemption amount for the preceding year, determined in accordance with that second paragraph, in respect of a large investment project of the vendor, or of a partnership of which it is a member, that is referred to in the first paragraph of section 737.18.17.5 for that preceding year;

(d)  D is the vendor’s tax assistance limit in relation to the first large investment project;

(e)  E is the vendor’s tax assistance limit in relation to the second large investment project;

(f)  F is the amount determined in respect of the deemed large investment project in accordance with subparagraph a or b of the first paragraph for the particular taxation year or fiscal period, as the case may be; and

(g)  G is the amount by which the vendor’s tax assistance limit in relation to the first large investment project exceeds the amount determined in respect of the deemed large investment project in accordance with subparagraph a or b of the first paragraph for the vendor’s taxation year or fiscal period that includes the last day of the tax-free period in respect of the first large investment project.

For the purpose of determining the amount referred to in subparagraph i of subparagraph a of the first paragraph for any preceding taxation year for which section 733.0.5.1 applies to the vendor, subparagraph b of the fourth paragraph is to be read as if

(a)  the amount that is deducted by the vendor in computing its taxable income for the preceding year under section 737.18.17.5 were increased by the amount by which its non-capital loss for the preceding year exceeds the amount that would be that loss if it were determined without reference to section 733.0.5.1; and

(b)  the vendor’s taxable income for the preceding year, determined without reference to section 737.18.17.5, were equal to the amount that, but for section 737.18.17.6, would be determined in its respect for the preceding year under section 737.18.17.5.

The rate to which subparagraph i of subparagraph b of the fourth paragraph refers in respect of a corporation for a taxation year is equal to the amount by which the basic rate determined for the year in respect of the corporation under section 771.0.2.3.1 exceeds the percentage determined for the year in its respect under subparagraph c of the first paragraph of section 771.0.2.4.

Where the corporation is a manufacturing corporation, within the meaning assigned by the first paragraph of section 771.1, to which paragraph d.3 of subsection 1 of section 771 applies for the preceding taxation year, this section, as it reads in its application to a taxation year that begins before 1 January 2017, is to be read as if “8% of” in subparagraph i of subparagraph b of the third paragraph were replaced by “the product obtained by multiplying the difference between the basic rate determined for the preceding year in respect of the vendor under section 771.0.2.3.1 and the percentage determined for the preceding year in its respect under section 771.0.2.5 by

Where the corporation is a primary and manufacturing sectors corporation, within the meaning assigned by the first paragraph of section 771.1, to which paragraph d.4 of subsection 1 of section 771 applies for the preceding taxation year, the sixth paragraph is to be read as if “subparagraph c of the first paragraph of section 771.0.2.4” were replaced by “section 771.0.2.6”.

2015, c. 21, s. 260; 2017, c. 1, s. 185; 2019, c. 14, s. 205.

2017-02-08

737.18.17.12. Where, at any time in a particular taxation year or fiscal period, a corporation or a partnership, as the case may be, (in this section referred to as the “acquirer”), acquired all or substantially all of a recognized business from another corporation or partnership (in this section referred to as the “vendor”) in relation to a large investment project, and the Minister of Finance previously authorized the transfer of the carrying out of the large investment project to the acquirer, according to a qualification certificate issued by that Minister to the acquirer in respect of the project, the vendor and the acquirer shall enter into an agreement under which an amount in respect of the vendor’s tax assistance limit in relation to the project is transferred to the acquirer, which amount must not be greater than the amount by which the amount described in the second paragraph exceeds,

(a)  where the vendor is a corporation, the total of

i.  the aggregate of all amounts each of which is, for a preceding taxation year, equal to the amount determined by the formula

A × B × C, and

ii.  the aggregate of all amounts each of which is the vendor’s contribution exemption amount, for a preceding taxation year, in respect of the large investment project, determined in accordance with the second paragraph of section 34.1.0.3 of the Act respecting the Régie de l’assurance maladie du Québec (chapter R-5); or

(b)  where the vendor is a partnership, the total of

i.  the aggregate of all amounts each of which is the amount agreed on, in respect of a preceding fiscal period of the vendor, in relation to the large investment project, pursuant to an agreement referred to in section 737.18.17.10 in respect of the fiscal period, and

ii.  the aggregate of all amounts each of which is the vendor’s contribution exemption amount, for a preceding fiscal period, in respect of the large investment project, determined in accordance with the second paragraph of section 34.1.0.3 of the Act respecting the Régie de l’assurance maladie du Québec.

The amount to which the portion of the first paragraph before subparagraph a refers is 15% of the total qualified capital investments of the vendor on the date of the beginning of the tax-free period in respect of the large investment project, unless the vendor acquired all or substantially all of the recognized business in relation to the project following a previous transfer, in which case it is the amount that was transferred to the vendor pursuant to the agreement referred to in this section in respect of the acquisition.

In the formula in subparagraph i of subparagraph a of the first paragraph,

(a)  A is 1, unless the vendor has an establishment situated outside Québec for the preceding year, in which case it is the proportion that the vendor’s business carried on in Québec is of the aggregate of its business carried on in Canada or in Québec and elsewhere, as determined under subsection 2 of section 771 for that preceding year;

(b)  B is, subject to the fifth and sixth paragraphs, the aggregate of

i.  8% of the amount by which the amount that would be determined in respect of the vendor for the preceding year under section 771.2.1.2 if no reference were made to section 771.2.5.1 and if, for the purposes of paragraph b of section 771.2.1.2, its taxable income for the preceding year were computed without reference to section 737.18.17.5, exceeds the amount determined in its respect for the preceding year under section 771.2.1.2, and

ii.  the product obtained by multiplying the basic rate determined for the preceding year in respect of the vendor under section 771.0.2.3.1 by the amount by which the amount that the vendor deducts in computing its taxable income for the preceding year under section 737.18.17.5 exceeds the excess amount determined under subparagraph i; and

(c)  C is the proportion that the vendor’s tax exemption amount for the preceding year in respect of the large investment project, determined in accordance with the second paragraph of section 737.18.17.6, is of the aggregate of all amounts each of which is the vendor’s tax exemption amount for the preceding year, determined in accordance with that second paragraph, in respect of a large investment project of the vendor, or of a partnership of which it is a member, that is referred to in the first paragraph of section 737.18.17.5 for that preceding year.

For the purpose of determining the amount referred to in subparagraph i of subparagraph a of the first paragraph for any preceding taxation year for which section 733.0.5.1 applies to the vendor, subparagraph b of the third paragraph is to be read as if

(a)  the amount that is deducted by the vendor in computing its taxable income for the preceding year under section 737.18.17.5 were increased by the amount by which its non-capital loss for the preceding year exceeds the amount that would be that loss if it were determined without reference to section 733.0.5.1; and

(b)  the vendor’s taxable income for the preceding year, determined without reference to section 737.18.17.5, were equal to the amount that, but for section 737.18.17.6, would be determined in its respect for the preceding year under section 737.18.17.5.

Where the corporation is a manufacturing corporation, within the meaning assigned by the first paragraph of section 771.1, to which paragraph d.3 of subsection 1 of section 771 applies for the preceding taxation year, subparagraph i of subparagraph b of the third paragraph is to be read as if “8% of” were replaced by “the product obtained by multiplying the difference between the basic rate determined for the preceding year in respect of the vendor under section 771.0.2.3.1 and the percentage determined for the preceding year in its respect under section 771.0.2.5 by”.

Where the corporation is a primary and manufacturing sectors corporation, within the meaning assigned by the first paragraph of section 771.1, to which paragraph d.4 of subsection 1 of section 771 applies for the preceding taxation year, subparagraph i of subparagraph b of the third paragraph is to be read as if “8% of” were replaced by “the product obtained by multiplying the difference between the basic rate determined for the preceding year in respect of the vendor under section 771.0.2.3.1 and the percentage determined for the preceding year in its respect under section 771.0.2.6 by”.

2015, c. 21, s. 260; 2017, c. 1, s. 185.

2015-10-21

737.18.17.12. Where, at any time in a particular taxation year or fiscal period, a corporation or a partnership, as the case may be, (in this section referred to as the “acquirer”), acquired all or substantially all of a recognized business from another corporation or partnership (in this section referred to as the “vendor”) in relation to a large investment project, and the Minister of Finance previously authorized the transfer of the carrying out of the large investment project to the acquirer, according to a qualification certificate issued by that Minister to the acquirer in respect of the project, the vendor and the acquirer shall enter into an agreement under which an amount in respect of the vendor’s tax assistance limit in relation to the project is transferred to the acquirer, which amount must not be greater than the amount by which the amount described in the second paragraph exceeds,

(a)  where the vendor is a corporation, the total of

i.  the aggregate of all amounts each of which is, for a preceding taxation year, equal to the amount determined by the formula

A × B × C, and

ii.  the aggregate of all amounts each of which is the vendor’s contribution exemption amount, for a preceding taxation year, in respect of the large investment project, determined in accordance with the second paragraph of section 34.1.0.3 of the Act respecting the Régie de l’assurance maladie du Québec (chapter R-5); or

(b)  where the vendor is a partnership, the total of

i.  the aggregate of all amounts each of which is the amount agreed on, in respect of a preceding fiscal period of the vendor, in relation to the large investment project, pursuant to an agreement referred to in section 737.18.17.10 in respect of the fiscal period, and

ii.  the aggregate of all amounts each of which is the vendor’s contribution exemption amount, for a preceding fiscal period, in respect of the large investment project, determined in accordance with the second paragraph of section 34.1.0.3 of the Act respecting the Régie de l’assurance maladie du Québec.

The amount to which the portion of the first paragraph before subparagraph a refers is 15% of the total qualified capital investments of the vendor on the date of the beginning of the tax-free period in respect of the large investment project, unless the vendor acquired all or substantially all of the recognized business in relation to the project following a previous transfer, in which case it is the amount that was transferred to the vendor pursuant to the agreement referred to in this section in respect of the acquisition.

In the formula in subparagraph i of subparagraph a of the first paragraph,

(a)  A is 1, unless the vendor has an establishment situated outside Québec for the preceding year, in which case it is the proportion that the vendor’s business carried on in Québec is of the aggregate of its business carried on in Canada or in Québec and elsewhere, as determined under subsection 2 of section 771 for that preceding year;

(b)  B is, subject to the fifth paragraph, the aggregate of

i.  8% of the amount by which the amount that would be determined in respect of the vendor for the preceding year under section 771.2.1.2 if no reference were made to section 771.2.5.1 and if, for the purposes of paragraph b of section 771.2.1.2, its taxable income for the preceding year were computed without reference to section 737.18.17.5, exceeds the amount determined in its respect for the preceding year under section 771.2.1.2, and

ii.  11.9% of the amount by which the amount that the vendor deducts in computing its taxable income for the preceding year under section 737.18.17.5 exceeds the excess amount determined under subparagraph i; and

(c)  C is the proportion that the vendor’s tax exemption amount for the preceding year in respect of the large investment project, determined in accordance with the second paragraph of section 737.18.17.6, is of the aggregate of all amounts each of which is the vendor’s tax exemption amount for the preceding year, determined in accordance with that second paragraph, in respect of a large investment project of the vendor, or of a partnership of which it is a member, that is referred to in the first paragraph of section 737.18.17.5 for that preceding year.

For the purpose of determining the amount referred to in subparagraph i of subparagraph a of the first paragraph for any preceding taxation year for which section 733.0.5.1 applies to the vendor, subparagraph b of the third paragraph is to be read as if

(a)  the amount that is deducted by the vendor in computing its taxable income for the preceding year under section 737.18.17.5 were increased by the amount by which its non-capital loss for the preceding year exceeds the amount that would be that loss if it were determined without reference to section 733.0.5.1; and

(b)  the vendor’s taxable income for the preceding year, determined without reference to section 737.18.17.5, were equal to the amount that, but for section 737.18.17.6, would be determined in its respect for the preceding year under section 737.18.17.5.

Where the corporation is a manufacturing corporation, within the meaning assigned by the first paragraph of section 771.1, to which paragraph d.3 of subsection 1 of section 771 applies for the taxation year, the reference to “8%” in subparagraph i of subparagraph b of the third paragraph is to be read

(a)  as a reference to “4%”, where subparagraph ii of subparagraph a of the first paragraph of section 771.0.2.5 applies to the corporation;

(b)  as a reference to the percentage determined by the following formula, where subparagraph i of subparagraph a of the first paragraph of section 771.0.2.5 applies to the corporation:

8% – (D + E); and

(c)  as a reference to the amount by which 8% exceeds the aggregate of the following percentages, where subparagraph b of the first paragraph of section 771.0.2.5 applies to the corporation:

i.  the percentage determined by the formula

D × (F – 25%)/25%, and

ii.  the percentage determined by the formula

E × (F – 25%)/25%.

In the formulas in the fifth paragraph,

(a)  D is the proportion of 2% that the number of days in the taxation year that follow 4 June 2014 but precede 1 April 2015 is of the number of days in the taxation year;

(b)  E is the proportion of 4% that the number of days in the taxation year that follow 31 March 2015 is of the number of days in the taxation year; and

(c)  F is the proportion of the manufacturing or processing activities, within the meaning assigned by the first paragraph of section 771.1, of the corporation for the taxation year.

2015, c. 21, s. 260.