Published | Category : Source deductions and contributions
Exemption from the Contribution to the Health Services Fund for a Business that Carries Out a Large Investment Project
A corporation or partnership that, after November 20, 2012, carries out a large investment project ($200 million or more) in Québec may, under certain conditions, be entitled to a 10-year tax holiday. This tax holiday consists of a deduction in the calculation of the corporation's taxable income and an exemption from the employer contribution to the health services fund with regard to the eligible activities relating to such a project.
Conditions to be met
A corporation or a partnership may be exempted from the contribution to the health services fund on the salary and wages paid to an employee for the time that employee spends on eligible activities of the corporation or partnership, where
- the corporation or the partnership holds
- an initial certificate from the Ministère des Finances et de l'Économie, and
- an annual certificate for the taxation year from that Ministère;
- the salary or wages are for a pay period included in the exemption period covered by the annual certificate issued for the year concerned, and do not include
- the wages paid to an employee whose duties consist in building, expanding or modernizing the site where the large investment project will be carried out,
- directors' fees,
- 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).
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.
The corporation or partnership must enclose with form RLZ-1.S-V, Summary of Source Deductions and Employer Contributions, a copy of the annual certificates and, where applicable, a copy of the partnership agreement for the calendar year for which the corporation or partnership is applying for the exemption from the employer contribution to the health services fund.
The total amount of tax assistance (related to income tax and employer contributions 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, for 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.
To apply for an initial certificate or an annual certificate, go to the website of the Ministère des Finances.
For more information, refer to the Guide de la déclaration de revenus des sociétés (CO-17.G).