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Published | Category : Income tax - businesses

Measures to Foster Business Investment

The government has decided to replace the tax holiday for a major investment project with a new tax holiday for large investment projects.

New tax holiday for large investment projects

A corporation that, after November 20, 2012, carries out a large investment project of at least $300 million in Québec may, under certain conditions, benefit from a tax holiday. This holiday applies to income tax on the income from its eligible activities relating to such project and to employer contributions to the health services fund on the portion of salaries and wages paid to its employees for carrying out eligible activities.

Similarly, a partnership that, after November 20, 2012, carries out a large investment project in Québec may, under certain conditions, benefit from a holiday from employer contributions to the health services fund on the portion of salaries and wages paid to its employees for carrying out eligible activities relating to the project. A corporation that is a member of a partnership may benefit from the holiday from income tax on its share of the income from eligible activities of the partnership relating to such project.

To qualify as a large investment project, the corporation or partnership must obtain for the project an initial certificate as well as annual certificates issued by the Minister of Finance and the Economy certifying that the project concerns activities in the manufacturing, data processing and storage, wholesale trade or warehousing sectors.

This tax holiday will last for ten years and may not exceed 15% of the total eligible investment expenditures.

For more information, refer to page H.23 of the Budget Plan published by the Ministère des Finances et de l’Économie.

Elimination of the tax holiday for a major investment project

The elimination of the tax holiday for a major investment project is effective as of November 20, 2012.

The elimination of the tax holiday for a major investment project will not affect the eligibility for such tax holiday of corporations or partnerships that already have an initial certificate for an investment project. Such corporations or partnerships may continue to benefit from this tax holiday until it expires, according to the rules that currently apply.

For further information, see page H.32 of the Budget Plan published by the Ministère des Finances et de l’Économie.

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