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Published | Category : Income tax - businesses

Reduced Tax Rate for Small and Medium-Sized Manufacturing Businesses

Québec small and medium-sized manufacturing businesses can benefit from an additional reduction of up to four percentage points from their tax rate.

Small and medium-sized manufacturing businesses

For the purposes of this measure, small and medium-sized manufacturing businesses are corporations at least 25% of whose activities consist of manufacturing and processing activities in a given taxation year.

Two items are considered in determining the proportion of a corporation's activities attributable to manufacturing and processing activities: assets and labour.

Determining the rate of the additional reduction

Small and medium-sized manufacturing businesses whose proportion of activities attributable to manufacturing and processing activities, for a given taxation year, is 50% or more, can benefit from the maximum additional reduction rate applicable for that taxation year.

Where such proportion, for a given taxation year, is between 50% and 25%, the additional reduction rate from which the business in question can benefit, for that taxation year, is reduced linearly.

The maximum rate of the additional reduction that applies with respect to a taxation year ended after June 4, 2014, is two percentage points. The maximum rate that applies with respect to a taxation year ended after March 31, 2015, is four percentage points.

However, where the taxation year of a small or medium-sized manufacturing business includes June 4, 2014, or March 31, 2015, the additional reduction rate applies in proportion to the number of days in the taxation year that follow June 4, 2014, or March 31, 2015.

For more information, see pages 1 through 3 of the Additional Information on the Fiscal Measures of the Budget (PDF – 795 KB) published on June 4, 2014, by the Ministère des Finances.

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