Temporary Exemption From the Contribution to the Health Services Fund

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You may, under certain conditions, be exempted from the contribution to the health services fund on salaries or wages subject to the contribution.

If you are entitled to an exemption, you must include the exempted salaries or wages in the total payroll used to determine your contribution rate.

Large investment project

A corporation or a partnership that carries out a large investment project in Québec may, under certain conditions, be entitled to a 15-year tax holiday. Under the tax holiday, a corporation or a partnership can claim an exemption from the employer contribution to the health services fund for the portion of the salary or wages paid to employees that is attributable to the time they spend on eligible activities related to the project.

Conditions to be met

Any corporation or partnership that wants to take advantage of the tax holiday has to apply for an initial qualification certificate with the Minister of Finance, in respect of the project. The application must be filed before work on the large investment project begins, and no later than December 31, 2020.

The corporation or partnership must also hold an annual certificate issued by the Minister of Finance for a given taxation year or fiscal period confirming that:

  • the project is being carried out in the given year or period and qualifies as a large investment project for that year or period; and
  • the corporation or partnership has demonstrated that the activities under the project will be carried out in Québec.

The corporation or partnership must enclose with the RL-1 summary (form RLZ-1.S-V) a copy of the annual certificates and, where applicable, a copy of the sharing agreement for the calendar year for which the corporation or partnership is applying for the exemption from the contribution to the health services fund.

Amending the initial qualification certificate

A corporation or a partnership that holds an initial qualification certificate in respect of a large investment project can apply to the Minister of Finance to have the certificate amended to add a phase to the project. The application must be filed:

  • before work on the additional phase begins;
  • no later than the date on which the application for the first annual certificate in respect of the project is filed, and before January 1, 2021.

Applying for an initial certificate or an annual certificate

To apply for an initial certificate or an annual certificate, go to the website of the Ministère des Finances.

Exempt salaries and wages

The salary and wages that a corporation or a partnership pays an employee for the time that employee spends on eligible activities related to the large investment project qualify for the exemption from the contribution to the health services fund where they are paid for a pay period included in the exemption period covered by an annual certificate for the year concerned.

Salary and wages do not include:

  • directors' fees;
  • bonuses;
  • taxable benefits;
  • incentives and commissions (except if the employee's duties relate to the commercialization of the activities or products of the business related to the large investment project);
  • the salary or wages paid to an employee:
    • whose duties consist in building, expanding or modernizing the site where a large investment project will be carried out,
    • who develops an eligible digital platform, and
    • for the portion of time that the employee spends simultaneously on eligible activities related to the large investment project and on other activities of the corporation or partnership.

If the pay period does not fall entirely within the exemption period, only the portion of the salary or wages related to the exemption period is exempt from the employer contribution to the health services fund.  

Tax assistance cap

The total amount of the tax assistance (related to income tax and the employer contribution to the health services fund) granted for a large investment project cannot exceed 15% of the total eligible investment expenditures related to such a project.

The tax assistance that a corporation or partnership may receive, for its taxation year or fiscal period, with regard to a large investment project, cannot exceed an amount corresponding to its tax assistance cap for its taxation year or fiscal period for such a project.

For more information, see the Guide de la déclaration de revenus des sociétés (CO-17.G) (available in French only).

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