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Last Word on Quebec Personal Tax Hikes for 2012 and 2013? - by Anouk Leclair 

Canadian Tax Adviser


October 16, 2012


Anouk Leclair
Montreal, National Tax Centre


Quebec announced changes to Quebec’s proposed personal tax rate hikes on October 10, 2012. The big news is that there will be no personal tax changes for 2012, retroactive or otherwise. For 2013, Quebec's Parti Québecois (PQ) minority government will not proceed with changes to increase the tax rate on capital gains (originally proposed a 75% inclusion rate) or to dividends (originally proposed to cut the dividend tax credit rate in half). However, beginning in 2013, the PQ will introduce a new top tax bracket at 25.75% for income above $100,000. This is an increase of 1.75% from the previous top tax bracket of 24% for income above $80,201.

Top 2013 Quebec marginal rates
As a result of the October 10, 2012 announcement the new top marginal tax rates for 2013 will be as follows, providing it passes through Quebec’s minority Parliament:


  • Regular income — 49.97% (from 48.22% in 2012)
  • Capital gains — 24.99% (from 24.11 in 2012)
  • Eligible dividends — 35.20% (from 32.81% in 2012)
  • Non-eligible dividends — 38.54% (from 36.35% in 2012).


Health contribution
As part of the PQ’s tax plan for 2013 it will introduce a new progressive health tax contribution. Under the new regime, taxpayers earning more than $150,000 will pay the maximum health tax premium of $1,000 per year (up from $200 per head). Taxpayers whose income is from $130,000 to $150,000 will pay from $200 to $999 and, for taxpayers whose income is between $42,000 and $130,000, the premium will remain unchanged at $200.


For more information, contact your KPMG adviser.





Information is current to October 16, 2012. 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.


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