Quebec Catch-Up Bills Receive Royal Assent | KPMG | CA

Quebec Catch-Up Bills Receive Royal Assent

Quebec Catch-Up Bills Receive Royal Assent

Canadian Tax Adviser,November 03, 2015. Several Quebec bills have recently received Royal Assent, giving effect to measures on Scientific Research and Experimental Development (SR&ED) and mining, among others.

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Bill 13

Quebec Bill 13, which implements outstanding Scientific Research and Experimental Development (SR&ED) and mining tax measures and gives effect to Quebec budget measures delivered on June 4, 2014 and November 20, 2012, received Royal Assent on October 21, 2015 and is therefore enacted for U.S. GAAP purposes as of this date. The provisions are considered substantively enacted for purposes of IFRS and Accounting Standards for Private Enterprise (ASPE) as of December 4, 2014, when the bill received first reading in the provincial legislature (as Quebec has a majority government). 

Bill 13 includes measures to:

  • Implement a 20% reduction in tax assistance for businesses 
  • Introduce a tax credit for SR&ED relating to biopharmaceutical activities
  • Introduce a penalty where information on tax preparers on SR&ED claim forms is missing, incomplete or inaccurate
  • Introduce a new method for computing mining tax that provides for a minimum tax based on the mine-mouth output value, and for progressive tax rates ranging from 16% to 28% based on an operator's profit margin
  • Reduce the tax rates for manufacturing SMEs
  • Introduce an additional deduction for transportation costs of remote manufacturing SMEs
  • Implement a tax holiday for large investment projects 
  • Modify the temporary contribution of financial institutions towards large institutions 
  • Amend the Tax Administration Act and the Taxation Act similar to those made to the Income Tax Act by federal bills assented to in 2012 and 2013.

Bill 39

Quebec Bill 39, which implements measures from the 2014 Quebec Economic Update, received Royal Assent on October 26, 2015 and is therefore enacted for U.S. GAAP purposes as of this date. The provisions are considered substantively enacted for purposes of IFRS and Accounting Standards for Private Enterprise (ASPE) as of May 14, 2015, when the bill received first reading in the provincial legislature (as Quebec has a majority government).

Bill 39 includes provincial measures to:

  • Introduce an excluded expense amount relating to qualified property for the purposes of the investment tax credit 
  • Increase the tax on capital for insurance corporations to 3% (from 2%)
  • Increase the additional deduction for transportation costs of remote manufacturing small and medium-sized businesses.

Bill 55

Quebec Bill 55, which includes harmonization legislation that implements transparency measures for the mining, oil and gas industries, received Royal Assent on October 21, 2015 and is therefore enacted for U.S. GAAP purposes as of this date. The provisions are considered substantively enacted for purposes of IFRS and Accounting Standards for Private Enterprise (ASPE) as of June 11, 2015, when the bill received first reading in the provincial legislature (as Quebec has a majority government). 

As a result, certain Quebec companies and other entities that carry out the commercial development of oil, gas or minerals are required to report to Quebec details of tax and other payments they make to all levels of domestic and foreign governments. 

Companies affected by these transparency measures must file the required statement for fiscal years starting with the first fiscal year following the fiscal year that includes October 21, 2015.

Bill 55 defers the reporting of payments to certain defined First Nations Groups until June 2017.  

For more information, contact your KPMG adviser. 

Disclaimer

Information is current to November 03, 2015. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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