Published | Category : Income tax - businesses
Broadening the Sectors of Activity Eligible for the Tax Holiday for Large Investment Projects
To encourage more projects with a structuring effect on the Québec economy, investment projects for the development of an eligible digital platform may, under certain conditions, be recognized for the purposes of the tax holiday for large investment projects.
An “eligible digital platform” is a computer environment that enables content management or use, that serves as an intermediary in accessing information, services or property supplied or edited by a corporation or partnership, or by a third party, and that is not a tax-exempt platform.
Clarifications regarding the income tax holiday
Eligible activities pertaining to a large investment project for the development of an eligible digital platform means activities relating to the use of the eligible digital platform. Accordingly, activities that consist in selling property or offering services via the digital platform are not eligible activities pertaining to the large investment project.
Consequently, the income tax holiday applies only to income that is reasonably attributable to the use of the eligible digital platform. This income includes:
- fees and royalties charged by the operator of the eligible digital platform to use the platform as an intermediary;
- the portion of subscription fees respecting the eligible digital platform that may reasonably be considered to have been paid for the use of the platform;
- amounts paid by third parties to use the eligible digital platform as a gateway to their website;
- other such amounts.
The portion of subscription fees paid for services received or property acquired, other than the right to use the platform, is not eligible for the income tax holiday.
Clarifications regarding the holiday from employer health services fund (HSF) contributions
Salaries and wages paid to employees of the corporation or partnership for activities relating to the maintenance and upgrade of digital platform components, support service, customer service relating to the use of the platform, and other similar activities give entitlement to the holiday from employer HSF contributions.
Salaries and wages paid to an employee by the corporation or partnership for the portion of the employee's time devoted to eligible activities relating to the large investment project and other activities of the corporation or partnership do not give entitlement to the holiday from employer HSF contributions.
Salaries and wages paid by the corporation or partnership to its employees whose tasks consist in developing the eligible digital platform do not give entitlement to the holiday from employer HSF contributions.
These measures apply to investment projects that begin after March 27, 2018.
For more information, see pages A.66 to A.69 of Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.