Introduction of a Refundable Tax Credit Pertaining to the Costs of Issuing Shares as Part of an Initial Public Offering Under the Stock Savings Plan II
A refundable tax credit equal to 30% of the eligible issue expenses that an eligible corporation incurs in an initial public offering (IPO) under the Stock Savings Plan II (SSP II) will be introduced. An eligible corporation will be a corporation that satisfies the requirements to be considered an eligible issuing corporation for the purposes of the SSP II.
The eligible issue expenses of an eligible corporation, for a taxation year, will be the expenses incurred by the corporation in the taxation year or in a previous taxation year, in relation to a public issue of eligible shares of its capital stock in an IPO under the SSP II. The expenses will be the same as those the corporation can otherwise deduct in calculating its income. However, the eligible expenses must not exceed the lesser of
- 15% of the gross proceeds of the issue of shares; and
- $3 million.
The eligible issue expenses must be attributable to a public issue of shares for which a favourable advance ruling was issued by the Minister of Revenue before the receipt for the final prospectus was obtained, in accordance with the rules applicable to the SSP II.
The refundable tax credit for the issue expenses of shares in an IPO that an eligible corporation can receive for a taxation year during which the shares of its capital stock are issued will correspond to 30% of the eligible issue expenses incurred by the eligible corporation for that year.
An eligible corporation can receive the refundable tax credit for eligible issue expenses it incurs after March 20, 2012, in relation to a public issue of eligible shares of its capital stock in an IPO under the SSP II that is covered, after that day, by a favourable advance ruling of the Minister of Revenue, in accordance with the rules applicable to the SSP II. The refundable tax credit will be temporary since the SSP II ends December 31, 2014.
For further information, see page 79 in Additional Information on the Fiscal Measures of the Budget, published by the Ministère des Finances.