Principal Changes for 2019 in the Partnership Information Return

Coronavirus (COVID-19)

Click Coronavirus Disease (COVID-19) to see whether the measures adopted by Revenu Québec apply to the information on this page.

Decrease in the income tax rate applicable to taxable non-portfolio earnings of specified investment flow-through (SIFT) partnerships

SIFT partnerships that have an establishment in Québec must pay income tax on their taxable non-portfolio earnings. The rate used to calculate the income tax has been decreasing by 0.1% per calendar year since 2017, and will stop decreasing in 2020 once the rate has reached 11.5% (for a total decrease of 0.4%).

The applicable rate of 11.7% for the 2018 calendar year will therefore decrease to 11.6% for the 2019 calendar year.

Permanent additional capital cost allowance (CCA) for property in classes 43.1, 43.2, 50 and 53, and qualified intellectual property

A new permanent additional CCA of 30% can be claimed for property acquired after December 3, 2018, that is:

The new permanent additional CCA can be claimed for the fiscal period following the period in which the property is available for use. Property for which this new additional CCA can be claimed must be included in a separate class.

With the new permanent additional CAA in place, the temporary additional CCA of 60% for class 50 or 53 property has been eliminated for property acquired after December 3, 2018.

For more information, see sections 4.5.8 and 4.5.9 of the Guide to Filing the Partnership Information Return (TP-600.G-V).

Capital cost allowance (CCA) for accelerated investment incentive property (AIIP) and for property in new classes 54 and 55

Accelerated investment incentive property (AIIP)

Changes have been made to the CCA for AIIP (which is most depreciable property acquired after November 20, 2018, and available for use before 2028). These changes primarily affect the CCA that can be claimed for the fiscal period in which AIIP is available for use.

First, the half-year rule is suspended. Second, the undepreciated capital cost (UCC) that is used to calculate the CCA is increased so that the amount of CCA can reach:

  • three times the amount that would otherwise be deducted; or
  • 100% of the cost of the AIIP in the case of qualified intellectual property or property in:
    • class 43.1, 43.2 or 53, or
    • class 50, if the property is acquired after December 3, 2018, and:
      • qualifies for the new permanent additional CCA of 30%, or
      • is used primarily in Québec.

The CCA table in Schedule B of the Partnership Information Return (TP-600-V) has been modified to take the AIIP rules into account. Columns C.1, F.1, F.2 and F.3 have been added.

For more information, see section 4.2 of the Guide to Filing the Partnership Information Return (TP-600.G-V).

New class 54 or 55 qualified property

As a rule, the new class 54 includes zero-emission vehicles acquired after March 18, 2019, and available for use before 2028 that would have been in class 10 or 10.1 had they been acquired before March 19, 2019.

The capital cost of a zero-emission vehicle that can be included in new class 54, where the vehicle would have been a passenger vehicle included in class 10.1 had it been acquired before March 19, 2019, is limited to $55,000 (excluding taxes). Unlike vehicles in class 10.1, you do not have to include each zero-emission passenger vehicle whose cost exceeds $55,000 in a separate class 54.

The new class 55 includes zero-emission vehicles acquired after March 18, 2019, and available for use before 2028 that would have been included in class 16 or 18 had they been acquired before March 19, 2019.

The new class 55 is similar to new class 54, except that it does not include zero-emission passenger vehicles and does not have a capital cost limit.

The CCA rate for class 54 is 30%. The rate for class 55 is 40%. However, a partnership that acquires class 54 or class 55 property can claim an enhanced CCA for the fiscal period in which the property is available for use. The half-year rule will not apply for purposes of calculating the CCA of these classes for that fiscal period. Furthermore, the UCC of each class will be increased before being multiplied by 30% or 40% so that the CCA for the new property can be up to 100% of its cost. For property that is available for use after 2023 but before 2028, the percentage of the cost of the property that the CCA can reach will gradually decrease (and will no longer be 100%).

The term "zero-emission vehicle" means a motor vehicle that is a plug-in hybrid with a battery of at least 7 kWh or is fully electric or fully powered by hydrogen. The vehicle must meet certain conditions, including the following:

  • It has not been used, or acquired for use, for any purpose before it was acquired by the partnership.
  • It is not a vehicle in respect of which the partnership has received financial assistance from the Government of Canada.

A partnership can choose to include a zero-emission vehicle in class 10, 10.1, 16 or 18, and forgo having the property treated as class 54 or 55 property.

For more information, see section 4.2 of the Guide to Filing the Partnership Information Return (TP-600.G-V).

Canadian exploration expenses – Oil and gas discovery wells

Since January 1, 2019, expenditures associated with drilling an oil or gas well that results in the discovery of a previously unknown petroleum or natural gas reservoir have been treated as Canadian development expenses (CDE) rather than as Canadian exploration expenses (CEE). This is also the case for expenditures incurred for building a temporary access road to, or preparing a site in respect of, any such well.

Consistent with the existing rules, drilling expenditures can continue to be classified as CEE or be reclassified as CEE in the following situations:

  • The well has been abandoned.
  • The well has not produced for 24 months.
  • The federal Minister of Natural Resources has certified that the relevant costs associated with drilling the well are expected to exceed $5 million and that the well will not produce within 24 months.

CEE treatment will continue to be available for other expenses, such as early stage geophysical and geochemical surveying.

This measure will apply to expenses incurred after 2018. If a partnership entered into a written agreement before March 22, 2017 (including a commitment to a government under the terms of a licence or permit) to incur those expenses, the measure will apply to expenses incurred after 2020.

The deduction rates applicable to CDE and CEE remain the same.

New tax credit for small and medium-sized businesses to foster the retention of experienced workers

A qualified corporation can claim the new tax credit for small and medium-sized businesses to foster the retention of experienced workers if:

  • it is a member of a qualified partnership;
  • the qualified partnership paid employer contributions for employees aged 60 or over on January 1 of a calendar year after 2018;
  • the corporation's taxation year ended in the partnership's fiscal period in which the contributions were paid.

A partnership is a qualified partnership for a given fiscal period, if it meets the following requirements:

  • It has an establishment in Québec and carries on business 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 the partnership's employees exceeds 5,000 for the fiscal period, except in the case of a partnership that would have been a primary and manufacturing sectors corporation for the fiscal period had it been a corporation.

The highest rate for this tax credit is:

  • 50% for employer contributions paid by the partnership for specified employees (employees aged at least 60 but not over 64);
  • 75% for employer contributions paid by the partnership for eligible employees (employees aged 65 or over).

The rates decrease based on the partnership's total payroll for the calendar year that ended in the fiscal period. If the total payroll is equal to or more than the total payroll threshold for the year used to determine the employer contribution to the health services fund, the rate will be 0% (if the partnership is a member of an associated group, the total payroll includes the total payroll of each member of the group).

The amount of employer contributions that the partnership paid in respect of an employee is limited and the limit is based on whether the employee is a specified employee or an eligible employee.

For more information, see section 4.4.5 of the Guide to Filing the Partnership Information Return (TP-600.G-V).

Tax credit for the reporting of tips

Indemnities (such as annual vacation pay and indemnities for statutory holidays and certain family events) that an employer must pay to an eligible employee under the Act respecting labour standards (or an employment contract) qualify for the tax credit for the reporting of tips.

On January 1, 2019, the tax credit was extended to include indemnities paid to an employee under the Act (or an employment contract) for days of leave taken:

  • to fulfil family obligations related to the care, health or education of the employee's child or the child of the employee's spouse;
  • for health reasons (owing to sickness, an organ or tissue donation for transplant, an accident, domestic violence or sexual violence of which the employee has been a victim);
  • because of the state of health of a relative or a person for whom the employee acts as a caregiver, as attested by a health professional.

Only the portion of the indemnities attributable to tips that the employee received (or that were allocated to the employee) qualifies for the tax credit.

Tax credit for the digital transformation of print media companies

If a partnership incurs eligible digital conversion costs in a fiscal period, after March 27, 2018, its members that are qualified corporations can, under certain conditions, claim the tax credit for the digital transformation of print media companies for the taxation year in which the partnership's fiscal period ends. Each corporation can claim the tax credit based on its percentage interest in the partnership.

Initially, digital conversion costs incurred after December 31, 2022, or, in the case of costs related to the acquisition of qualified property, after December 31, 2021, would not give entitlement to the tax credit. However, to further support the digital conversion of Québec print media companies' business models, the tax credit has been extended for a year. As a result, the following costs will be eligible costs:

  • eligible digital conversion costs incurred in 2023, other than those related to the acquisition of qualified property;
  • eligible digital conversion costs incurred for the acquisition of qualified property, if the property is acquired in 2022.

For more information, see the instructions for code 105 of lines 440p to 440y in CO-17.G, Guide de la déclaration de revenus des sociétés (available in French only).

Tax credit relating to information technology integration

If a partnership incurred eligible expenses related to an eligible information technology integration contract in a fiscal period, any qualified corporation that is a member of the partnership can, under certain conditions, claim the tax credit relating to information technology integration for its taxation year in which the partnership's fiscal period ends. Each corporation can claim the credit based on its percentage interest in the partnership.

Initially, expenses related to a eligible information technology integration contract incurred after December 31, 2019, would not give entitlement to the tax credit. However, in order to continue to support the integration of technology in small and medium-sized businesses, the tax credit has been extended for a year. As a result, eligible expenses related to an eligible information technology integration contract incurred in 2020 will give entitlement to the tax credit.

For more information, see information bulletin 2019-11, published on December 16, 2019, by the Ministère des Finances du Québec.

New tax credit to support print media companies

Important

The information regarding the tax credit to support print media companies does not take into account changes announced in information bulletin 2019-11, published on December 16, 2019, by the Ministère des Finances du Québec. With the changes, a partnership can, under certain conditions, include in the calculation of the tax credit the consideration it pays to a corporation for information technology activities. The partnership must hold all the shares in the corporation and the activities must be related to the production or dissemination of original written content to be published by an eligible media of the partnership.

For more information, see information bulletin 2019-11.

A qualified corporation that is a member of a qualified partnership that incurred qualified salaries or wages after December 31, 2018, in respect of employees whose duties relate to the production of original written information content or to information technology activities related to the production or dissemination of such content can, under certain conditions, claim the tax credit to support print media companies. The corporation must claim the credit for its taxation year in which the partnership's fiscal period ends, based on its percentage interest in the partnership.

A partnership is a qualified partnership for a given fiscal period, if it meets the following requirements:

  • The partnership carries on a business in Québec and has an establishment there.
  • The partnership did not carry on a broadcasting undertaking within the meaning of the Broadcasting Act.
  • The partnership holds a qualification certificate issued by Investissement Québec certifying that, in the fiscal period in question, the partnership produced and disseminated a print media that is recognized as an eligible media.

A corporation can claim a tax credit that is equal to 35% of its share of the qualified salaries and wages that the partnership incurred for eligible employees (employees for which the partnership holds a qualification certificate issued by Investissement Québec) in the fiscal period that ended in the corporation's taxation year.

The qualified salary or wages of an eligible employee for a fiscal period cannot exceed $75,000. If the employee is an eligible employee for only part of the fiscal period, the $75,000 limit is reduced. To calculate the reduced limit, multiply $75,000 by the result of the following division: the number of days in the fiscal period the employee was an eligible employee divided by 365.

A qualified partnership must also hold, for each employee to whom a qualified salary or wages was paid, a qualification certificate issued by Investissement Québec, certifying that the employee is an eligible employee for part or all of the fiscal period. A qualification certificate will be issued for an employee if the following conditions are met:

  • The employee worked for the partnership at least 26 hours per week, for a minimum period of 40 weeks.
  • The employee's duties were devoted, for all or part of the fiscal period, in a proportion of at least 75%, to directly undertaking or supervising activities relating to the production of original written information content for dissemination in an eligible media of the partnership, or to information technology activities related to the production or dissemination of such content.

For more information, see the instructions for code 108 of lines 440p through 440y in CO-17.G, Guide de la déclaration de revenus des sociétés (available in French only).

Mandatory disclosure of certain specified transactions, nominee agreements and sham transactions

New measures have been implemented to counter tax planning that undermines the tax system's integrity. These measures strengthen the current mandatory disclosure mechanism and aim to counter nominee agreements and sham transactions.

For more information, see information bulletins 2019-5 and 2019-11, published on May 17, 2019, and December 16, 2019, by the Ministère des Finances du Québec.

Fair. For all.

One vision. Concrete actions.

Read all about how we work to support and inform you. Our vision and values guide us as we carry out our role.

Veuillez patienter