Subject to certain conditions, some transactions must be reported via mandatory disclosure, such as:

• confidential transactions;
• transactions involving conditional remuneration;
• transactions with contractual coverage;
• specified transactions.

As of December 18, 2021, any transaction intended to result in a refundable tax credit does not meet the definition of a transaction involving conditional remuneration. As a result, it is no longer necessary to disclose such a transaction in form TP-1079.DI-V, Mandatory Disclosure of a Confidential Transaction or a Transaction Involving Conditional Remuneration or Contractual Coverage.

This change applies to a refundable tax credit that must be claimed using a prescribed form whose legal filing deadline falls after December 31, 2021.

For more information, see Mandatory or Preventive Disclosure.  

A qualified partnership that acquires qualified property in a given capital cost allowance (CCA) class in a fiscal period after December 31, 2021, can take advantage of immediate expensing. This allows the partnership to claim temporary enhanced CCA of up to 100% of the property's capital cost, provided the property becomes available for use in the fiscal period and:

• before 2025, if it is acquired by a qualified partnership whose members are all individuals throughout the period;
• before 2024, in all other cases.

A qualified partnership is a Canadian partnership for which each member throughout the fiscal period is:

• a Canadian-controlled private corporation (CCPC);
• an individual (other than a trust) who is resident in Canada.

Qualified property is designated immediate expensing property (DIEP) for the fiscal period (i.e. depreciable property other than property in any of classes 1 to 6, 14.1, 17, 47, 49 or 51). Class 43.1, 43.2, 44, 50 and 53 property still qualifies for the accelerated investment incentive and the resulting CCA of up to 100% of the property's capital cost, and the property does not have to be included in DIEP.

CCA can be claimed for DIEP if:

• the property was not used for any purpose before it was acquired by the partnership, and no CCA or terminal loss was claimed by the partnership or by a person or other partnership with regard to the property for a taxation year or fiscal period that ended before the property was acquired by the partnership; or
• the property is not property that was acquired as part of a tax-deferred rollover or property that was previously acquired or held by the partnership or by a person or partnership (hereafter “the other entity”) with which the partnership was not dealing at arm's length when the other entity owned or acquired the property.

Property must be designated as DIEP using form CO-130.AD, Déduction pour amortissement à l'égard de biens relatifs à la passation en charges immédiate, no later than 12 months following the information return filing deadline for the fiscal period.

CCA for DIEP is limited to $1.5 million per fiscal period (hereafter the “limit”). If the qualified partnership's fiscal period has fewer than 365 days, the limit must be multiplied by the number of days in the fiscal period divided by 365.

If the capital cost of all the qualified partnership's DIEP exceeds the $1.5 million limit for a fiscal period, the qualified partnership can choose the classes for which it wants to claim CCA at the 100% rate. If the capital cost of DIEP in a given class exceeds the limit, the excess capital cost is subject to the usual CCA rules.

If the capital cost of all the qualified partnership's DIEP does not reach the limit for a fiscal period, the qualified partnership cannot carry forward the unused amount to another fiscal period.

Associated partnerships

The rules for determining whether two partnerships are associated have been broadened for the purpose of CCA with regard to DIEP. A qualified partnership can now be considered a partnership that is associated with other eligible persons or qualified partnerships for a fiscal period.

If a qualified partnership is considered to be associated with other eligible persons or qualified partnerships, all of these persons or partnerships must agree on how to allocate the $1.5 million limit and then inform us using form TP-130.EN-V, Immediate Expensing Limit Agreement.

Clean energy generation equipment and energy conservation equipment is included in class 43.1 or, under certain conditions, in class 43.2. These classes benefit from tax incentives with respect to CCA.

Changes have been made so that air-source heat pumps used mainly for space or water heating can be included, subject to certain conditions, in classes 43.1 and 43.2.

The changes concern property acquired after April 6, 2022.

If a qualified partnership incurred specified expenses in a fiscal period to acquire specified property, any qualified corporation that is a member of the partnership can claim the tax credit for investment and innovation for the expenses for a taxation year in which the partnership's fiscal period ends, provided the expenses were incurred after March 10, 2020, and before January 1, 2025.

In 2021, the tax credit rates were temporarily increased from:

• 20% to 40%, if the property was acquired to be used mainly in a low economic vitality territory;
• 15% to 30%, if the property was acquired to be used mainly in an intermediate economic vitality territory;
• 10% to 20%, if the property was acquired to be used mainly in a high economic vitality territory.

This temporary increase has been extended for one year and now applies to specified expenses incurred after March 25, 2021, and before January 1, 2024, to acquire specified property during that period, or to acquire specified property after March 25, 2021, and before April 1, 2024, if one of the following two conditions applies:

• The property is acquired pursuant to a written obligation entered into after March 25, 2021, and before January 1, 2024.
• Construction of the property by or on behalf of the qualified partnership began after March 25, 2021, and before January 1, 2024.

For more information, see form CO-1029.8.36.II, Crédit d'impôt pour investissement et innovation, and the page Crédit d'impôt pour investissement et innovation (in French only).

If, in a fiscal period, a qualified partnership paid employer contributions in respect of its employees aged 60 or over on January 1 of a calendar year ending in that period, any qualified corporation that is a member of the partnership can claim the tax credit to foster the retention of experienced workers in respect of those contributions for its taxation year in which the partnership's fiscal period ends. Each qualified corporation can claim the tax credit based on its share of the employer contributions that the partnership paid for the calendar year.

A partnership is a qualified partnership for a fiscal period if it meets the following conditions:

• It carries on a business in Québec and has an establishment there.
• Its paid-up capital for the previous fiscal period is less than $15 million (if the partnership is a member of an associated group, its paid-up capital includes the paid-up capital of each member of the group).
• The number of remunerated hours of all its employees exceeds 5,000 for the fiscal period (except if the partnership would have been a primary or manufacturing sector corporation if it had been a corporation).

However, to ensure more qualified corporations that are members of a partnership can take advantage of this tax credit, the criteria regarding paid-up capital and remunerated hours no longer factor into the definition of “qualified partnership.”

This measure applies for a qualified partnership's fiscal period ending after December 30, 2022, in respect of employer contributions the partnership paid for a calendar year after 2021.

For more information, see form CO-1029.8.33.TE, Crédit d'impôt favorisant le maintien en emploi des travailleurs d'expérience, and the page Crédit d'impôt favorisant le maintien en emploi des travailleurs d'expérience (in French only).

If, in a fiscal period, a qualified partnership paid employer contributions in respect of eligible employees for a calendar year ending after the fiscal period, a qualified corporation that is a member of the partnership can claim the tax credit for small and medium-sized businesses that employ persons with a severely limited capacity for employment regarding its contributions for the taxation year in which the partnership's fiscal period ends. The corporation must take into account its percentage interest in the partnership.

A partnership is a qualified partnership for a fiscal period if it meets the following conditions:

• It carries on a business in Québec and has an establishment there.
• Its paid-up capital for the previous fiscal period is less than $15 million (if the partnership is a member of an associated group, its paid-up capital includes the paid-up capital of each member of the group).
• The number of remunerated hours of all its employees exceeds 5,000 for the fiscal period (except if the partnership would have been a primary or manufacturing sector corporation if it had been a corporation).

However, to ensure more qualified corporations that are members of a partnership can take advantage of this tax credit, the criteria regarding paid-up capital and remunerated hours no longer factor into the definition of “qualified partnership.”

Given the changes, the tax credit has been renamed the “tax credit for the retention of persons with a severely limited capacity for employment” as of the 2022 calendar year.

This measure applies for a qualified partnership's fiscal period ending after December 30, 2022, in respect of employer contributions the partnership paid for a calendar year after 2021.

For more information, see form CO-1029.8.33.CS, Crédit d'impôt pour le maintien en emploi des personnes ayant des contraintes sévères à l'emploi, and the page Crédit d'impôt pour le maintien en emploi des personnes ayant des contraintes sévères à l'emploi (in French only).