Quebec 2017 Budget Bill Receives Assent | KPMG | CA

Quebec 2017 Budget Bill Receives Assent

Quebec 2017 Budget Bill Receives Assent

Quebec Bill 146 received Assent on December 7, 2017.

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Bill 146 contains measures that were previously announced in Quebec's 2017 budget as well as in various information bulletins published in 2016 and 2017.

The provisions are considered substantively enacted for purposes of IFRS and Accounting Standards for Private Enterprise (ASPE) as of November 9, 2017, when the bill received first reading in the provincial legislature (as Quebec has a majority government). Bill 146 is considered enacted for U.S. GAAP purposes on December 7, 2017, the date the bill received Assent.

Corporate tax measures
Bill 146 also includes the following corporate income tax measures:

  • Changes to the small business deduction qualification criteria for taxation years starting after December 31, 2016 
  • An extension to the compensation tax for financial institutions (now extended until March 31, 2024)
  • Changes to various income tax credits, including:
    • The temporary refundable tax credit for the production of biodiesel fuel
    • The temporary refundable tax credit for major digital transformation projects 
    • The tax credit for experienced workers 
    • The donation credit for cultural gifts
  • Harmonization with certain federal changes that:
    • Change the rules restricting access to the intergenerational rollover and the lifetime capital gains exemption (LCGE) so that it can apply to an individual's property that is principally used for farming and fishing 
    • Eliminate an entity's ability to multiply the small business deduction for partnership structures (see TNF 16-12, "2016 Federal Budget Highlights")
  • Additional shareholder loan rules for back-to-back arrangements involving shareholder loans and multiple-intermediary structures.

Personal tax measures
Some personal tax measures within Bill 146 have been changed from when the bill was initially introduced, including:

  • The personal income tax rate on the first bracket (i.e. income up to $42,705) has now been decreased to 15% from 16%
  • The personal tax credit rate is reduced to 15% (previously announced in the Quebec 2017 budget to be reduced from 20% to 16%).

These measures apply retroactively to January 1, 2017 and were announced in Quebec's economic update on November 21, 2017 (see TNF 2017-59 "Highlights of the 2017 Quebec Economic Update").

For more information, contact your KPMG adviser.

 

Information is current to December 12, 2017. 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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