I-3 - Taxation Act

Section 1029.8.36.166.60.36 Disposition versions

2023-03-15

1029.8.36.166.60.36. In this division,

“aluminum producing corporation” for a taxation year means a corporation that, at any time in the year after 10 March 2020, carries on an aluminum producing business or is the owner or lessee of property used in the carrying on of such a business by another corporation, a partnership or a trust with which the corporation is associated;

“associated group” in a taxation year or a fiscal period has the meaning assigned by section 1029.8.36.166.60.37;

“eligible expenses” of a corporation for a particular taxation year or of a partnership for a particular fiscal period, in respect of a qualified property, has the meaning assigned by section 1029.8.36.166.40;

“excluded corporation” for a taxation year means

(a)  a corporation that is exempt from tax for the year under Book VIII;

(b)  a corporation that would be exempt from tax for the year under section 985, but for section 192;

(c)  an aluminum producing corporation for the year; or

(d)  an oil refining corporation for the year;

“excluded expense amount” relating to a property, for a taxation year or a fiscal period, means

(a)  where the property is a qualified property, the excluded expense amount relating to that property, determined in accordance with the first paragraph of section 1029.8.36.166.40 for the year or fiscal period;

(b)  where the property is a specified property of a corporation, the lesser of

i.  an amount that would be equal to the corporation’s specified expenses in respect of the specified property for the taxation year, if the definition of “specified expenses” were read without reference to “the amount by which the excluded expense amount relating to the corporation’s specified property for the particular year is exceeded by” in the portion of its paragraph a before subparagraph i, and

ii.  an amount equal to the amount by which the exclusion threshold in respect of the specified property exceeds the aggregate of all amounts each of which is the excluded expense amount relating to that property for a preceding taxation year; or

(c)  where the property is a specified property of a partnership, the lesser of

i.  an amount that would be equal to the partnership’s specified expenses in respect of the specified property for the fiscal period, if the definition of “specified expenses” were read without reference to “the amount by which the excluded expense amount relating to the partnership’s specified property for the particular fiscal period is exceeded by” in the portion of its paragraph b before subparagraph i, and

ii.  an amount equal to the amount by which the exclusion threshold in respect of the specified property exceeds the aggregate of all amounts each of which is the excluded expense amount relating to that property for a preceding fiscal period;

“excluded partnership” for a fiscal period means a partnership that, at any time in the fiscal period after 10 March 2020, carries on an aluminum producing business or an oil refining business;

“exclusion threshold” in respect of a specified property means, subject to the fourth paragraph,

(a)  $5,000, in the case of a property referred to in subparagraph ii or v of paragraph b of the definition of “specified property”; or

(b)  $12,500, in any other case;

“hydrometallurgy” means any processing of an ore or concentrate that produces a metal, metallic salt or metallic compound by carrying out a chemical reaction in an aqueous or organic solution;

“large investment project” has the meaning assigned by the first paragraph of section 737.18.17.1;

“limit relating to an unused portion” of a corporation for a taxation year means the aggregate of its total taxes for the year and of the amount determined for the year in its respect under the second paragraph of section 1029.8.36.166.60.45;

“maximum tax credit amount” of a corporation for a taxation year means the sum obtained by adding the amount by which its total taxes for the year exceed the amount it is deemed to have paid to the Minister for the year under section 1029.8.36.166.60.51 and the amount determined for the year in its respect under the first paragraph of section 1029.8.36.166.60.45;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 10 March 2020, carries on an oil refining business or is the owner or lessee of property used in the carrying on of such a business by another corporation, a partnership or a trust, with which the corporation is associated;

“qualified corporation” for a taxation year means a corporation, other than an excluded corporation for the year, that, in the year, carries on a business in Québec and has an establishment in Québec;

“qualified management software package” means a property of a corporation or partnership that is a software package mainly enabling the management of one or more of the following elements:

(a)  all of the operational processes of a business carried on by the corporation or partnership, as the case may be, by integrating all of the functions of the business;

(b)  the interactions with the clients of the business carried on by the corporation or partnership, as the case may be, through multiple and interconnected communication channels; or

(c)  a network of businesses carried on by the corporation or partnership, as the case may be, that are involved in the production of a product or the provision of a service required by the end client, to cover all movements of materials or information, from the point of origin to the point of consumption;

“qualified partnership” for a fiscal period means a partnership, other than an excluded partnership for the fiscal period, that, in the fiscal period, carries on a business in Québec and has an establishment in Québec;

“qualified property” of a corporation or a partnership has the meaning assigned by section 1029.8.36.166.40;

“recognized business” has the meaning assigned by the first paragraph of section 737.18.17.1;

“refining” means any processing of a product from a smelting or concentration operation to remove impurities, which produces very high grade metal;

“smelting” means any processing of an ore or concentrate in the course of which the charge is melted and chemically converted to produce a slag and a matte or metal containing impurities;

“specified expenses” of a corporation for a particular taxation year or of a partnership for a particular fiscal period, in respect of a specified property, means

(a)  for a corporation, the amount by which the excluded expense amount relating to the corporation’s specified property for the particular year is exceeded by the aggregate of the following expenses, except expenses incurred with a person with whom the corporation, a specified shareholder of the corporation or, if the corporation is a cooperative, a specified member of the corporation is not dealing at arm’s length:

i.  the expenses incurred by the corporation in the particular year to acquire the specified property that are included, at the end of that year, in the capital cost of the property and that are paid on or before the last day of the 18-month period following the end of that year, and

ii.  the expenses incurred by the corporation to acquire the specified property in a preceding taxation year for which it was a qualified corporation that are included, at the end of the preceding year, in the capital cost of the property and that are paid in the particular year, but more than 18 months after the end of that preceding year; or

(b)  for a partnership, the amount by which the excluded expense amount relating to the partnership’s specified property for the particular fiscal period is exceeded by the aggregate of the following expenses, except expenses incurred with a corporation that is a member of the partnership or with a person with whom such a corporation, a specified shareholder of the corporation or, if the corporation is a cooperative, a specified member of the corporation is not dealing at arm’s length:

i.  the expenses incurred by the partnership in the particular fiscal period to acquire the specified property that are included, at the end of that fiscal period, in the capital cost of the property and that are paid on or before the last day of the 18-month period following the end of that fiscal period, and

ii.  the expenses incurred by the partnership to acquire the specified property in a preceding fiscal period for which it was a qualified partnership that are included, at the end of the preceding fiscal period, in the capital cost of the property and that are paid in the particular fiscal period, but more than 18 months after the end of that preceding fiscal period;

“specified member” of a corporation that is a cooperative, in a taxation year, means a member having, directly or indirectly, at any time in the year, at least 10% of the votes that could be cast at a meeting of the members of the cooperative;

“specified property” of a corporation or a partnership means a property, other than a property that is the subject of a valid election made in accordance with the second paragraph of section 1029.8.36.166.40, that meets the following conditions:

(a)  the property is acquired by the corporation or partnership after 10 March 2020 and before 1 January 2025, but is not a property acquired pursuant to an obligation in writing entered into before 11 March 2020 or the construction of which, if applicable, by or on behalf of the purchaser, had begun by 10 March 2020;

(b)  if no reference were made to section 93.6, the property would be

i.  a property included in Class 43 of Schedule B to the Regulation respecting the Taxation Act (chapter I-3, r. 1),

ii.  a property included in Class 50 of Schedule B to the Regulation respecting the Taxation Act,

iii.  a property included in Class 53 of Schedule B to the Regulation respecting the Taxation Act,

iv.  a property that would be included in Class 43 of Schedule B to the Regulation respecting the Taxation Act if subparagraphs i and ii of paragraph b of that class were read as follows:

“i. would be included in Class 10 under subparagraph e of the second paragraph of that class, if this schedule were read without reference to this paragraph and subparagraphs a, b and e of the first paragraph of Class 41, and

“ii. at the time of its acquisition, may reasonably be expected to be used entirely in Canada and primarily for the purposes of smelting, refining or hydrometallurgy activities in respect of ore (other than ore from a gold or silver mine) extracted from a mineral resource located in Canada.”, or

v.  a property that is included in Class 12 of Schedule B to the Regulation respecting the Taxation Act, pursuant to subparagraph o of its first paragraph, and that is a qualified management software package;

(c)  the property begins to be used within a reasonable time after being acquired;

(d)  the property is used mainly in Québec, where it is described in subparagraph v of paragraph b, or solely in Québec, in any other case, and mainly in the course of carrying on a business;

(e)  the property is not used, or acquired to be used, in the course of carrying on a recognized business in connection with which a large investment project is carried out or is in the process of being carried out;

(f)  the property is not used in the course of operating an ethanol, biodiesel fuel, pyrolysis oil or biofuel plant;

(g)  the property was not, before its acquisition, used for any purpose or acquired to be used or leased for any purpose whatever; and

(h)  the property is neither used to host or produce content comprising explicit sex scenes or graphic representations of such scenes, nor to enable the sharing of such content, unless

i.  it is established to the Minister’s satisfaction that reasonable measures have been taken by the corporation to ensure such property is not used to host, produce or share such content, or

ii.  all or substantially all of the content that is hosted, produced or shared does not constitute such content;

“territory with high economic vitality” means a municipality mentioned in Schedule I to the Act respecting the Communauté métropolitaine de Montréal (chapter C-37.01) or Schedule A to the Act respecting the Communauté métropolitaine de Québec (chapter C-37.02);

“territory with intermediate economic vitality” means a territory situated in Québec that is neither a territory with high economic vitality nor a territory with low economic vitality;

“territory with low economic vitality” means

(a)  one of the following regional county municipalities:

i.  Municipalité régionale de comté d’Antoine-Labelle,

ii.  Municipalité régionale de comté d’Argenteuil,

iii.  Municipalité régionale de comté d’Avignon,

iv.  Municipalité régionale de comté de Bonaventure,

v.  Municipalité régionale de comté de Charlevoix-Est,

vi.  (subparagraph repealed);

vii.  Municipalité régionale de comté de La Haute-Côte-Nord,

viii.  Municipalité régionale de comté de La Haute-Gaspésie,

ix.  Municipalité régionale de comté de La Matanie,

x.  Municipalité régionale de comté de La Matapédia,

xi.  Municipalité régionale de comté de La Mitis,

xii.  Municipalité régionale de comté de La Vallée-de-la-Gatineau,

xiii.  Municipalité régionale de comté de Maria-Chapdelaine,

xiii.1.  Municipalité régionale de comté de Maskinongé,

xiv.  Municipalité régionale de comté de Matawinie,

xv.  Municipalité régionale de comté de Mékinac,

xv.1.  Municipalité régionale de comté de Papineau,

xvi.  Municipalité régionale de comté de Pontiac,

xvii.  Municipalité régionale de comté de Témiscouata,

xviii.  (subparagraph repealed);

xix.  Municipalité régionale de comté des Basques,

xx.  Municipalité régionale de comté des Etchemins,

xxi.  Municipalité régionale de comté des Sources,

xxi.1.  Municipalité régionale de comté du Domaine-du-Roy,

xxii.  Municipalité régionale de comté du Golfe-du-Saint-Laurent, or

xxiii.  Municipalité régionale de comté du Rocher-Percé;

(b)  the urban agglomeration of La Tuque, as described in section 8 of the Act respecting the exercise of certain municipal powers in certain urban agglomerations (chapter E-20.001); or

(c)  Ville de Shawinigan;

“total taxes” of a corporation for a taxation year means, subject to the third paragraph, the aggregate of its tax payable under this Part for the year and of its tax payable under Parts IV.1, VI and VI.1 for the year;

“unused portion of the tax credit” of a corporation for a taxation year means the amount by which the total amount that the corporation would be deemed to have paid to the Minister for that year under the first paragraph of sections 1029.8.36.166.60.48 and 1029.8.36.166.60.49 if no reference were made to their third paragraph, exceeds the corporation’s maximum tax credit amount for the year.

For the purposes of the definition of “specified expenses” in the first paragraph, the following rules are taken into account:

(a)  the expenses that are included, at the end of a taxation year or fiscal period, in the capital cost of a property do not include the expenses so included under section 180 or 182;

(b)  the expenses incurred to acquire a property must be incurred before 1 January 2025; and

(c)  the specified expenses in respect of a specified property for a taxation year or fiscal period must be reduced by the portion of those expenses that are eligible expenses within the meaning of the first paragraph of section 1029.8.36.166.60.19.

Where a corporation is, for a taxation year, deemed to have paid an amount to the Minister under this division, otherwise than under any of sections 1029.8.36.166.60.60 to 1029.8.36.166.60.62, and an amount under Division II.6.14.2, otherwise than under any of sections 1029.8.36.166.55 to 1029.8.36.166.57, the corporation’s otherwise determined total taxes for the year are, for the purposes of this division, reduced by all or part of those amounts that the corporation takes into account in computing its total taxes for the year for the purposes of Division II.6.14.2.

Where a specified property is acquired in connection with a joint venture, the exclusion threshold in respect of the specified property for a corporation or partnership holding a share in the property as a party to such a venture is, for the purposes of the definition of “excluded expense amount” in the first paragraph, deemed to be equal to the amount obtained by multiplying the amount that would correspond to that threshold but for this paragraph by the proportion that corresponds to the share of the corporation or partnership, as the case may be, in the property.

2021, c. 14, s. 151; 2021, c. 36, s. 122; 2023, c. 2, s. 52.

2021-12-10

1029.8.36.166.60.36. In this division,

“aluminum producing corporation” for a taxation year means a corporation that, at any time in the year after 10 March 2020, carries on an aluminum producing business or is the owner or lessee of property used in the carrying on of such a business by another corporation, a partnership or a trust with which the corporation is associated;

“associated group” in a taxation year or a fiscal period has the meaning assigned by section 1029.8.36.166.60.37;

“eligible expenses” of a corporation for a particular taxation year or of a partnership for a particular fiscal period, in respect of a qualified property, has the meaning assigned by section 1029.8.36.166.40;

“excluded corporation” for a taxation year means

(a)  a corporation that is exempt from tax for the year under Book VIII;

(b)  a corporation that would be exempt from tax for the year under section 985, but for section 192;

(c)  an aluminum producing corporation for the year; or

(d)  an oil refining corporation for the year;

“excluded expense amount” relating to a property, for a taxation year or a fiscal period, means

(a)  where the property is a qualified property, the excluded expense amount relating to that property, determined in accordance with the first paragraph of section 1029.8.36.166.40 for the year or fiscal period;

(b)  where the property is a specified property of a corporation, the lesser of

i.  an amount that would be equal to the corporation’s specified expenses in respect of the specified property for the taxation year, if the definition of “specified expenses” were read without reference to “the amount by which the excluded expense amount relating to the corporation’s specified property for the particular year is exceeded by” in the portion of its paragraph a before subparagraph i, and

ii.  an amount equal to the amount by which the exclusion threshold in respect of the specified property exceeds the aggregate of all amounts each of which is the excluded expense amount relating to that property for a preceding taxation year; or

(c)  where the property is a specified property of a partnership, the lesser of

i.  an amount that would be equal to the partnership’s specified expenses in respect of the specified property for the fiscal period, if the definition of “specified expenses” were read without reference to “the amount by which the excluded expense amount relating to the partnership’s specified property for the particular fiscal period is exceeded by” in the portion of its paragraph b before subparagraph i, and

ii.  an amount equal to the amount by which the exclusion threshold in respect of the specified property exceeds the aggregate of all amounts each of which is the excluded expense amount relating to that property for a preceding fiscal period;

“excluded partnership” for a fiscal period means a partnership that, at any time in the fiscal period after 10 March 2020, carries on an aluminum producing business or an oil refining business;

“exclusion threshold” in respect of a specified property means, subject to the fourth paragraph,

(a)  $5,000, in the case of a property referred to in subparagraph ii or v of paragraph b of the definition of “specified property”; or

(b)  $12,500, in any other case;

“hydrometallurgy” means any processing of an ore or concentrate that produces a metal, metallic salt or metallic compound by carrying out a chemical reaction in an aqueous or organic solution;

“large investment project” has the meaning assigned by the first paragraph of section 737.18.17.1;

“limit relating to an unused portion” of a corporation for a taxation year means the aggregate of its total taxes for the year and of the amount determined for the year in its respect under the second paragraph of section 1029.8.36.166.60.45;

“maximum tax credit amount” of a corporation for a taxation year means the sum obtained by adding the amount by which its total taxes for the year exceed the amount it is deemed to have paid to the Minister for the year under section 1029.8.36.166.60.51 and the amount determined for the year in its respect under the first paragraph of section 1029.8.36.166.60.45;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 10 March 2020, carries on an oil refining business or is the owner or lessee of property used in the carrying on of such a business by another corporation, a partnership or a trust, with which the corporation is associated;

“qualified corporation” for a taxation year means a corporation, other than an excluded corporation for the year, that, in the year, carries on a business in Québec and has an establishment in Québec;

“qualified management software package” means a property of a corporation or partnership that is a software package mainly enabling the management of one or more of the following elements:

(a)  all of the operational processes of a business carried on by the corporation or partnership, as the case may be, by integrating all of the functions of the business;

(b)  the interactions with the clients of the business carried on by the corporation or partnership, as the case may be, through multiple and interconnected communication channels; or

(c)  a network of businesses carried on by the corporation or partnership, as the case may be, that are involved in the production of a product or the provision of a service required by the end client, to cover all movements of materials or information, from the point of origin to the point of consumption;

“qualified partnership” for a fiscal period means a partnership, other than an excluded partnership for the fiscal period, that, in the fiscal period, carries on a business in Québec and has an establishment in Québec;

“qualified property” of a corporation or a partnership has the meaning assigned by section 1029.8.36.166.40;

“recognized business” has the meaning assigned by the first paragraph of section 737.18.17.1;

“refining” means any processing of a product from a smelting or concentration operation to remove impurities, which produces very high grade metal;

“smelting” means any processing of an ore or concentrate in the course of which the charge is melted and chemically converted to produce a slag and a matte or metal containing impurities;

“specified expenses” of a corporation for a particular taxation year or of a partnership for a particular fiscal period, in respect of a specified property, means

(a)  for a corporation, the amount by which the excluded expense amount relating to the corporation’s specified property for the particular year is exceeded by the aggregate of the following expenses, except expenses incurred with a person with whom the corporation, a specified shareholder of the corporation or, if the corporation is a cooperative, a specified member of the corporation is not dealing at arm’s length:

i.  the expenses incurred by the corporation in the particular year to acquire the specified property that are included, at the end of that year, in the capital cost of the property and that are paid on or before the last day of the 18-month period following the end of that year, and

ii.  the expenses incurred by the corporation to acquire the specified property in a preceding taxation year for which it was a qualified corporation that are included, at the end of the preceding year, in the capital cost of the property and that are paid in the particular year, but more than 18 months after the end of that preceding year; or

(b)  for a partnership, the amount by which the excluded expense amount relating to the partnership’s specified property for the particular fiscal period is exceeded by the aggregate of the following expenses, except expenses incurred with a corporation that is a member of the partnership or with a person with whom such a corporation, a specified shareholder of the corporation or, if the corporation is a cooperative, a specified member of the corporation is not dealing at arm’s length:

i.  the expenses incurred by the partnership in the particular fiscal period to acquire the specified property that are included, at the end of that fiscal period, in the capital cost of the property and that are paid on or before the last day of the 18-month period following the end of that fiscal period, and

ii.  the expenses incurred by the partnership to acquire the specified property in a preceding fiscal period for which it was a qualified partnership that are included, at the end of the preceding fiscal period, in the capital cost of the property and that are paid in the particular fiscal period, but more than 18 months after the end of that preceding fiscal period;

“specified member” of a corporation that is a cooperative, in a taxation year, means a member having, directly or indirectly, at any time in the year, at least 10% of the votes that could be cast at a meeting of the members of the cooperative;

“specified property” of a corporation or a partnership means a property, other than a property that is the subject of a valid election made in accordance with the second paragraph of section 1029.8.36.166.40, that meets the following conditions:

(a)  the property is acquired by the corporation or partnership after 10 March 2020 and before 1 January 2025, but is not a property acquired pursuant to an obligation in writing entered into before 11 March 2020 or the construction of which, if applicable, by or on behalf of the purchaser, had begun by 10 March 2020;

(b)  if no reference were made to section 93.6, the property would be

i.  a property included in Class 43 of Schedule B to the Regulation respecting the Taxation Act (chapter I-3, r. 1),

ii.  a property included in Class 50 of Schedule B to the Regulation respecting the Taxation Act,

iii.  a property included in Class 53 of Schedule B to the Regulation respecting the Taxation Act,

iv.  a property that would be included in Class 43 of Schedule B to the Regulation respecting the Taxation Act if subparagraphs i and ii of paragraph b of that class were read as follows:

“i. would be included in Class 10 under subparagraph e of the second paragraph of that class, if this schedule were read without reference to this paragraph and subparagraphs a, b and e of the first paragraph of Class 41, and

“ii. at the time of its acquisition, may reasonably be expected to be used entirely in Canada and primarily for the purposes of smelting, refining or hydrometallurgy activities in respect of ore (other than ore from a gold or silver mine) extracted from a mineral resource located in Canada.”, or

v.  a property that is included in Class 12 of Schedule B to the Regulation respecting the Taxation Act, pursuant to subparagraph o of its first paragraph, and that is a qualified management software package;

(c)  the property begins to be used within a reasonable time after being acquired;

(d)  the property is used mainly in Québec, where it is described in subparagraph v of paragraph b, or solely in Québec, in any other case, and mainly in the course of carrying on a business;

(e)  the property is not used, or acquired to be used, in the course of carrying on a recognized business in connection with which a large investment project is carried out or is in the process of being carried out;

(f)  the property is not used in the course of operating an ethanol, biodiesel fuel or pyrolysis oil plant;

(g)  the property was not, before its acquisition, used for any purpose or acquired to be used or leased for any purpose whatever; and

(h)  the property is neither used to host or produce content comprising explicit sex scenes or graphic representations of such scenes, nor to enable the sharing of such content, unless

i.  it is established to the Minister’s satisfaction that reasonable measures have been taken by the corporation to ensure such property is not used to host, produce or share such content, or

ii.  all or substantially all of the content that is hosted, produced or shared does not constitute such content;

“territory with high economic vitality” means a municipality mentioned in Schedule I to the Act respecting the Communauté métropolitaine de Montréal (chapter C-37.01) or Schedule A to the Act respecting the Communauté métropolitaine de Québec (chapter C-37.02);

“territory with intermediate economic vitality” means a territory situated in Québec that is neither a territory with high economic vitality nor a territory with low economic vitality;

“territory with low economic vitality” means

(a)  one of the following regional county municipalities:

i.  Municipalité régionale de comté d’Antoine-Labelle,

ii.  Municipalité régionale de comté d’Argenteuil,

iii.  Municipalité régionale de comté d’Avignon,

iv.  Municipalité régionale de comté de Bonaventure,

v.  Municipalité régionale de comté de Charlevoix-Est,

vi.  (subparagraph repealed);

vii.  Municipalité régionale de comté de La Haute-Côte-Nord,

viii.  Municipalité régionale de comté de La Haute-Gaspésie,

ix.  Municipalité régionale de comté de La Matanie,

x.  Municipalité régionale de comté de La Matapédia,

xi.  Municipalité régionale de comté de La Mitis,

xii.  Municipalité régionale de comté de La Vallée-de-la-Gatineau,

xiii.  Municipalité régionale de comté de Maria-Chapdelaine,

xiii.1.  Municipalité régionale de comté de Maskinongé,

xiv.  Municipalité régionale de comté de Matawinie,

xv.  Municipalité régionale de comté de Mékinac,

xv.1.  Municipalité régionale de comté de Papineau,

xvi.  Municipalité régionale de comté de Pontiac,

xvii.  Municipalité régionale de comté de Témiscouata,

xviii.  (subparagraph repealed);

xix.  Municipalité régionale de comté des Basques,

xx.  Municipalité régionale de comté des Etchemins,

xxi.  Municipalité régionale de comté des Sources,

xxi.1.  Municipalité régionale de comté du Domaine-du-Roy,

xxii.  Municipalité régionale de comté du Golfe-du-Saint-Laurent, or

xxiii.  Municipalité régionale de comté du Rocher-Percé;

(b)  the urban agglomeration of La Tuque, as described in section 8 of the Act respecting the exercise of certain municipal powers in certain urban agglomerations (chapter E-20.001); or

(c)  Ville de Shawinigan;

“total taxes” of a corporation for a taxation year means, subject to the third paragraph, the aggregate of its tax payable under this Part for the year and of its tax payable under Parts IV.1, VI and VI.1 for the year;

“unused portion of the tax credit” of a corporation for a taxation year means the amount by which the total amount that the corporation would be deemed to have paid to the Minister for that year under the first paragraph of sections 1029.8.36.166.60.48 and 1029.8.36.166.60.49 if no reference were made to their third paragraph, exceeds the corporation’s maximum tax credit amount for the year.

For the purposes of the definition of “specified expenses” in the first paragraph, the following rules are taken into account:

(a)  the expenses that are included, at the end of a taxation year or fiscal period, in the capital cost of a property do not include the expenses so included under section 180 or 182;

(b)  the expenses incurred to acquire a property must be incurred before 1 January 2025; and

(c)  the specified expenses in respect of a specified property for a taxation year or fiscal period must be reduced by the portion of those expenses that are eligible expenses within the meaning of the first paragraph of section 1029.8.36.166.60.19.

Where a corporation is, for a taxation year, deemed to have paid an amount to the Minister under this division, otherwise than under any of sections 1029.8.36.166.60.60 to 1029.8.36.166.60.62, and an amount under Division II.6.14.2, otherwise than under any of sections 1029.8.36.166.55 to 1029.8.36.166.57, the corporation’s otherwise determined total taxes for the year are, for the purposes of this division, reduced by all or part of those amounts that the corporation takes into account in computing its total taxes for the year for the purposes of Division II.6.14.2.

Where a specified property is acquired in connection with a joint venture, the exclusion threshold in respect of the specified property for a corporation or partnership holding a share in the property as a party to such a venture is, for the purposes of the definition of “excluded expense amount” in the first paragraph, deemed to be equal to the amount obtained by multiplying the amount that would correspond to that threshold but for this paragraph by the proportion that corresponds to the share of the corporation or partnership, as the case may be, in the property.

2021, c. 14, s. 151; 2021, c. 36, s. 122.

2021-06-02

1029.8.36.166.60.36. In this division,

“aluminum producing corporation” for a taxation year means a corporation that, at any time in the year after 10 March 2020, carries on an aluminum producing business or is the owner or lessee of property used in the carrying on of such a business by another corporation, a partnership or a trust with which the corporation is associated;

“associated group” in a taxation year or a fiscal period has the meaning assigned by section 1029.8.36.166.60.37;

“eligible expenses” of a corporation for a particular taxation year or of a partnership for a particular fiscal period, in respect of a qualified property, has the meaning assigned by section 1029.8.36.166.40;

“excluded corporation” for a taxation year means

(a)  a corporation that is exempt from tax for the year under Book VIII;

(b)  a corporation that would be exempt from tax for the year under section 985, but for section 192;

(c)  an aluminum producing corporation for the year; or

(d)  an oil refining corporation for the year;

“excluded expense amount” relating to a property, for a taxation year or a fiscal period, means

(a)  where the property is a qualified property, the excluded expense amount relating to that property, determined in accordance with the first paragraph of section 1029.8.36.166.40 for the year or fiscal period;

(b)  where the property is a specified property of a corporation, the lesser of

i.  an amount that would be equal to the corporation’s specified expenses in respect of the specified property for the taxation year, if the definition of “specified expenses” were read without reference to “the amount by which the excluded expense amount relating to the corporation’s specified property for the particular year is exceeded by” in the portion of its paragraph a before subparagraph i, and

ii.  an amount equal to the amount by which the exclusion threshold in respect of the specified property exceeds the aggregate of all amounts each of which is the excluded expense amount relating to that property for a preceding taxation year; or

(c)  where the property is a specified property of a partnership, the lesser of

i.  an amount that would be equal to the partnership’s specified expenses in respect of the specified property for the fiscal period, if the definition of “specified expenses” were read without reference to “the amount by which the excluded expense amount relating to the partnership’s specified property for the particular fiscal period is exceeded by” in the portion of its paragraph b before subparagraph i, and

ii.  an amount equal to the amount by which the exclusion threshold in respect of the specified property exceeds the aggregate of all amounts each of which is the excluded expense amount relating to that property for a preceding fiscal period;

“excluded partnership” for a fiscal period means a partnership that, at any time in the fiscal period after 10 March 2020, carries on an aluminum producing business or an oil refining business;

“exclusion threshold” in respect of a specified property means, subject to the fourth paragraph,

(a)  $5,000, in the case of a property referred to in subparagraph ii or v of paragraph b of the definition of “specified property”; or

(b)  $12,500, in any other case;

“hydrometallurgy” means any processing of an ore or concentrate that produces a metal, metallic salt or metallic compound by carrying out a chemical reaction in an aqueous or organic solution;

“large investment project” has the meaning assigned by the first paragraph of section 737.18.17.1;

“limit relating to an unused portion” of a corporation for a taxation year means the aggregate of its total taxes for the year and of the amount determined for the year in its respect under the second paragraph of section 1029.8.36.166.60.45;

“maximum tax credit amount” of a corporation for a taxation year means the sum obtained by adding the amount by which its total taxes for the year exceed the amount it is deemed to have paid to the Minister for the year under section 1029.8.36.166.60.51 and the amount determined for the year in its respect under the first paragraph of section 1029.8.36.166.60.45;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 10 March 2020, carries on an oil refining business or is the owner or lessee of property used in the carrying on of such a business by another corporation, a partnership or a trust, with which the corporation is associated;

“qualified corporation” for a taxation year means a corporation, other than an excluded corporation for the year, that, in the year, carries on a business in Québec and has an establishment in Québec;

“qualified management software package” means a property of a corporation or partnership that is a software package mainly enabling the management of one or more of the following elements:

(a)  all of the operational processes of a business carried on by the corporation or partnership, as the case may be, by integrating all of the functions of the business;

(b)  the interactions with the clients of the business carried on by the corporation or partnership, as the case may be, through multiple and interconnected communication channels; or

(c)  a network of businesses carried on by the corporation or partnership, as the case may be, that are involved in the production of a product or the provision of a service required by the end client, to cover all movements of materials or information, from the point of origin to the point of consumption;

“qualified partnership” for a fiscal period means a partnership, other than an excluded partnership for the fiscal period, that, in the fiscal period, carries on a business in Québec and has an establishment in Québec;

“qualified property” of a corporation or a partnership has the meaning assigned by section 1029.8.36.166.40;

“recognized business” has the meaning assigned by the first paragraph of section 737.18.17.1;

“refining” means any processing of a product from a smelting or concentration operation to remove impurities, which produces very high grade metal;

“smelting” means any processing of an ore or concentrate in the course of which the charge is melted and chemically converted to produce a slag and a matte or metal containing impurities;

“specified expenses” of a corporation for a particular taxation year or of a partnership for a particular fiscal period, in respect of a specified property, means

(a)  for a corporation, the amount by which the excluded expense amount relating to the corporation’s specified property for the particular year is exceeded by the aggregate of the following expenses, except expenses incurred with a person with whom the corporation, a specified shareholder of the corporation or, if the corporation is a cooperative, a specified member of the corporation is not dealing at arm’s length:

i.  the expenses incurred by the corporation in the particular year to acquire the specified property that are included, at the end of that year, in the capital cost of the property and that are paid on or before the last day of the 18-month period following the end of that year, and

ii.  the expenses incurred by the corporation to acquire the specified property in a preceding taxation year for which it was a qualified corporation that are included, at the end of the preceding year, in the capital cost of the property and that are paid in the particular year, but more than 18 months after the end of that preceding year; or

(b)  for a partnership, the amount by which the excluded expense amount relating to the partnership’s specified property for the particular fiscal period is exceeded by the aggregate of the following expenses, except expenses incurred with a corporation that is a member of the partnership or with a person with whom such a corporation, a specified shareholder of the corporation or, if the corporation is a cooperative, a specified member of the corporation is not dealing at arm’s length:

i.  the expenses incurred by the partnership in the particular fiscal period to acquire the specified property that are included, at the end of that fiscal period, in the capital cost of the property and that are paid on or before the last day of the 18-month period following the end of that fiscal period, and

ii.  the expenses incurred by the partnership to acquire the specified property in a preceding fiscal period for which it was a qualified partnership that are included, at the end of the preceding fiscal period, in the capital cost of the property and that are paid in the particular fiscal period, but more than 18 months after the end of that preceding fiscal period;

“specified member” of a corporation that is a cooperative, in a taxation year, means a member having, directly or indirectly, at any time in the year, at least 10% of the votes that could be cast at a meeting of the members of the cooperative;

“specified property” of a corporation or a partnership means a property, other than a property that is the subject of a valid election made in accordance with the second paragraph of section 1029.8.36.166.40, that meets the following conditions:

(a)  the property is acquired by the corporation or partnership after 10 March 2020 and before 1 January 2025, but is not a property acquired pursuant to an obligation in writing entered into before 11 March 2020 or the construction of which, if applicable, by or on behalf of the purchaser, had begun by 10 March 2020;

(b)  if no reference were made to section 93.6, the property would be

i.  a property included in Class 43 of Schedule B to the Regulation respecting the Taxation Act (chapter I-3, r. 1),

ii.  a property included in Class 50 of Schedule B to the Regulation respecting the Taxation Act,

iii.  a property included in Class 53 of Schedule B to the Regulation respecting the Taxation Act,

iv.  a property that would be included in Class 43 of Schedule B to the Regulation respecting the Taxation Act if subparagraphs i and ii of paragraph b of that class were read as follows:

“i. would be included in Class 10 under subparagraph e of the second paragraph of that class, if this schedule were read without reference to this paragraph and subparagraphs a, b and e of the first paragraph of Class 41, and

“ii. at the time of its acquisition, may reasonably be expected to be used entirely in Canada and primarily for the purposes of smelting, refining or hydrometallurgy activities in respect of ore (other than ore from a gold or silver mine) extracted from a mineral resource located in Canada.”, or

v.  a property that is included in Class 12 of Schedule B to the Regulation respecting the Taxation Act, pursuant to subparagraph o of its first paragraph, and that is a qualified management software package;

(c)  the property begins to be used within a reasonable time after being acquired;

(d)  the property is used mainly in Québec, where it is described in subparagraph v of paragraph b, or solely in Québec, in any other case, and mainly in the course of carrying on a business;

(e)  the property is not used, or acquired to be used, in the course of carrying on a recognized business in connection with which a large investment project is carried out or is in the process of being carried out;

(f)  the property is not used in the course of operating an ethanol, biodiesel fuel or pyrolysis oil plant; and

(g)  the property was not, before its acquisition, used for any purpose or acquired to be used or leased for any purpose whatever;

“territory with high economic vitality” means a municipality mentioned in Schedule I to the Act respecting the Communauté métropolitaine de Montréal (chapter C-37.01) or Schedule A to the Act respecting the Communauté métropolitaine de Québec (chapter C-37.02);

“territory with intermediate economic vitality” means a territory situated in Québec that is neither a territory with high economic vitality nor a territory with low economic vitality;

“territory with low economic vitality” means

(a)  one of the following regional county municipalities:

i.  Municipalité régionale de comté d’Antoine-Labelle,

ii.  Municipalité régionale de comté d’Argenteuil,

iii.  Municipalité régionale de comté d’Avignon,

iv.  Municipalité régionale de comté de Bonaventure,

v.  Municipalité régionale de comté de Charlevoix-Est,

vi.  Municipalité régionale de comté de La Côte-de-Gaspé,

vii.  Municipalité régionale de comté de La Haute-Côte-Nord,

viii.  Municipalité régionale de comté de La Haute-Gaspésie,

ix.  Municipalité régionale de comté de La Matanie,

x.  Municipalité régionale de comté de La Matapédia,

xi.  Municipalité régionale de comté de La Mitis,

xii.  Municipalité régionale de comté de La Vallée-de-la-Gatineau,

xiii.  Municipalité régionale de comté de Maria-Chapdelaine,

xiv.  Municipalité régionale de comté de Matawinie,

xv.  Municipalité régionale de comté de Mékinac,

xvi.  Municipalité régionale de comté de Pontiac,

xvii.  Municipalité régionale de comté de Témiscouata,

xviii.  Municipalité régionale de comté des Appalaches,

xix.  Municipalité régionale de comté des Basques,

xx.  Municipalité régionale de comté des Etchemins,

xxi.  Municipalité régionale de comté des Sources,

xxii.  Municipalité régionale de comté du Golfe-du-Saint-Laurent, or

xxiii.  Municipalité régionale de comté du Rocher-Percé;

(b)  one of the following urban agglomerations:

i.  Communauté maritime des Îles-de-la-Madeleine, as described in section 9 of the Act respecting the exercise of certain municipal powers in certain urban agglomerations (chapter E-20.001), or

ii.  the urban agglomeration of La Tuque, as described in section 8 of the Act respecting the exercise of certain municipal powers in certain urban agglomerations; or

(c)  Ville de Shawinigan;

“total taxes” of a corporation for a taxation year means, subject to the third paragraph, the aggregate of its tax payable under this Part for the year and of its tax payable under Parts IV.1, VI and VI.1 for the year;

“unused portion of the tax credit” of a corporation for a taxation year means the amount by which the total amount that the corporation would be deemed to have paid to the Minister for that year under the first paragraph of sections 1029.8.36.166.60.48 and 1029.8.36.166.60.49 if no reference were made to their third paragraph, exceeds the corporation’s maximum tax credit amount for the year.

For the purposes of the definition of “specified expenses” in the first paragraph, the following rules are taken into account:

(a)  the expenses that are included, at the end of a taxation year or fiscal period, in the capital cost of a property do not include the expenses so included under section 180 or 182;

(b)  the expenses incurred to acquire a property must be incurred before 1 January 2025; and

(c)  the specified expenses in respect of a specified property for a taxation year or fiscal period must be reduced by the portion of those expenses that are eligible expenses within the meaning of the first paragraph of section 1029.8.36.166.60.19.

Where a corporation is, for a taxation year, deemed to have paid an amount to the Minister under this division, otherwise than under any of sections 1029.8.36.166.60.60 to 1029.8.36.166.60.62, and an amount under Division II.6.14.2, otherwise than under any of sections 1029.8.36.166.55 to 1029.8.36.166.57, the corporation’s otherwise determined total taxes for the year are, for the purposes of this division, reduced by all or part of those amounts that the corporation takes into account in computing its total taxes for the year for the purposes of Division II.6.14.2.

Where a specified property is acquired in connection with a joint venture, the exclusion threshold in respect of the specified property for a corporation or partnership holding a share in the property as a party to such a venture is, for the purposes of the definition of “excluded expense amount” in the first paragraph, deemed to be equal to the amount obtained by multiplying the amount that would correspond to that threshold but for this paragraph by the proportion that corresponds to the share of the corporation or partnership, as the case may be, in the property.

2021, c. 14, s. 151.