Quebec Bill 59 makes amendments similar to those made to the Income Tax Act of Canada and to the Excise Tax Act, as previously announced in Information Bulletins 2012-4, 2012-5, 2012-6, 2013-2 and 2013-7. These measures relate to certain federal bills including Bills C-38 (2012 federal budget bill #1), C-45 (2012 federal budget bill #2), C-48 (the "catch-up bill") and C-60 (2013 federal budget bill #1).
Harmonization measures in Quebec Bill 59 include:
- E-filing of fiscal returns prepared by tax preparers
- Judicial authorization to obtain information in respect of unnamed persons
- Various adjustments to the thin capitalization rules
- Abolition of the tax credit for employment out of Canada
- Relaxation of certain provisions relating to registered disability savings plans
- Pooled registered pension plans
- Introduction of a special tax on profit sharing plan surpluses
- Retirement income splitting
- Tax avoidance through the use of partnerships
- Information required from businesses so that a net tax refund can be paid.
This bill also gives effect to measures in the November 20, 2012 Quebec budget and Information Bulletin 2013-7 regarding the introduction of a temporary refundable tax credit for damage insurance firms and compensation tax relating to financial institutions (Information Bulletin 2013-7). The bill also enacts part of Information Bulletin 2013-6, which encourages cultural philanthropy by:
- Introducing an additional tax credit of 25% for a first major cultural gift
- Implementing a 30% tax credit for cultural patronage by individuals
- Increasing the eligible amount of a gift of a work of public art or of an immovable to be used for cultural purposes.
Indirect tax measures
Bill 59 includes many provisions that give effect to previous QST related announcements, including measures related to:
- The rules for small suppliers to exclude some specific goods from the threshold calculations
- Pharmacists' services
- Drugs, and medical and assistive devices
- Place of supply rule for specified road vehicles delivered in Quebec and later registered in another province within 7 days of delivery
- A good taken or shipped to another province or a territory by a resident in Canada
- Home and personal care services
- Reports and services for non-health care purposes.
Bill 59 also provides a new definition of "fiscal year" in section 1 of the Quebec Sales Tax Act and removes a few provisions relating to that term throughout that Act.
Not included in Bill 59
Several measures contained in the Information Bulletins are not covered by Bill 59, including:
- The e-business credit (Information Bulletins 2013-7 and 2012-6)
- The non eligible dividend credit rate adjustment from 8% to 7.05% (Information Bulletin 2013-7)
- And most of the federal 2013 budget measures (synthetic dispositions, character conversion transactions, corporate loss trading and many others) (Information Bulletin 2013-7)
- The QST selected listed financial institution regulations.
For more information, contact your KPMG adviser.
Information is current to November 26, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500