Coronavirus (COVID-19)

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

Published | Category : Income tax - businesses

Standardizing Tax Rates for SMBs

To further ease the tax burden on small and medium-sized businesses (SMBs) in sectors other than the primary and manufacturing sectors, and thus standardize the tax rates applicable to SMBs, the 3.7% small business deduction (SBD) rate has been raised. It will be further raised until the tax rate applicable to the portion of a corporation's income qualifying for the SBD reaches 4% in 2021. Consequently, the rate of the additional deduction for SMBs in the primary and manufacturing sectors has been reduced and will be further reduced until it has been eliminated altogether in 2021.

The maximum SBD rate available to a corporation is now:

  • 4.7% for the period that begins on March 28, 2018, and ends on December 31, 2018;
  • 5.6% for the period that begins on January 1, 2019, and ends on December 31, 2019;
  • 6.5% for the period that begins on January 1, 2020, and ends on December 31, 2020;
  • 7.5% as of January 1, 2021.

Accordingly, the rate of the additional deduction for SMBs in the primary and manufacturing sectors has been reduced so that the maximum deduction rate available to corporations is 3% for the period that begins on March 28, 2018, and ends on December 31, 2018, 2% for the period that begins on January 1, 2019, and ends on December 31, 2019, and 1% for the period that begins on January 1, 2020, and ends on December 31, 2020. The additional deduction for SMBs in the primary and manufacturing sectors will be eliminated as of January 1, 2021.

The announced changes to the SBD rates and to the rate of the additional deduction for SMBs in the primary and manufacturing sectors apply to taxation years of a corporation that end after March 28, 2018.

If a taxation year of a corporation straddles periods to which different SBD rates apply, the SBD rate that applies to the corporation for that taxation year is an average rate calculated taking into account the number of days in the taxation year included in each period and the SBD rate applicable to each of these periods.

Similarly, the rate of the additional deduction for SMBs in the primary and manufacturing sectors that applies to the corporation for that taxation year is an average rate calculated taking into account the number of days in the taxation year included in each period and the rate of the additional deduction for SMBs in the primary and manufacturing sectors applicable to each of these periods.

For more information, see pages A.60 and A.63 of the Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

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