I-3 - Taxation Act

Section 1029.8.36.5 Disposition versions

2019-12-11

1029.8.36.5. A qualified corporation in respect of which the Minister of Economy and Innovation issues a certificate for a particular taxation year, in respect of a design activity, in connection with a business it carries on in Québec, carried out under a contract entered into with a qualified outside consultant and that encloses the documents referred to in the sixth paragraph with the fiscal return it is required to file under section 1000 for the particular year, is deemed, subject to the third paragraph, to have paid to the Minister on the corporation’s balance-due day for that year, on account of its tax payable for that year under this Part, an amount equal to 12% of

(a)   if the qualified corporation is not dealing at arm’s length with the qualified outside consultant at the time the contract is entered into, the aggregate of all amounts each of which, determined in relation to a qualified designer or, as the case may be, to a qualified patternmaker, who reports for work at an establishment of the qualified outside consultant situated in Québec, is the expenditure that it incurs in the particular year, to the extent that the expenditure is paid, and that is the least of

i.  the part of the cost of the contract that may reasonably be attributed to the wages paid by the qualified outside consultant to the qualified designer or qualified patternmaker in a taxation year of the qualified outside consultant or, if the qualified outside consultant is a partnership, in a fiscal period of the qualified outside consultant and before the end of the particular year, in relation to the part of the design activity, or to the part of the pattern drafting activity provided for in the contract, that is carried out in Québec in the particular year or in a preceding taxation year, or that could be so attributed if the qualified outside consultant had such employees,

ii.  $60,000, if the wages referred to in subparagraph i, in relation to a taxation year or fiscal period of the qualified outside consultant, are paid or, as the case may be, deemed to be paid to a qualified designer, and

iii.  $40,000, if the wages referred to in subparagraph i, in relation to a taxation year or fiscal period of the qualified outside consultant, are paid or, as the case may be, deemed to be paid to a qualified patternmaker; and

(b)  if the qualified corporation is dealing at arm’s length with the qualified outside consultant at the time the contract is entered into, the expenditure that it incurs in the year and that is 65% of all or part of the cost of the contract that may reasonably be attributed to the design activity or to a pattern drafting activity provided for in the contract that the qualified outside consultant carried out in Québec in the particular year or a preceding taxation year, to the extent that the expenditure is paid.

For the purposes of the first paragraph, where an expenditure incurred in a taxation year is reasonably attributable to the carrying out of a design activity in a taxation year subsequent to the year, the expenditure is deemed to be incurred in that subsequent taxation year.

For the purpose of computing the payments that a corporation referred to in the first paragraph is required to make under subparagraph a of the first paragraph of section 1027, or any of sections 1145, 1159.7, 1175 and 1175.19 where they refer to that subparagraph a, the corporation is deemed to have paid to the Minister, on account of the aggregate of its tax payable for the year under this Part and of its tax payable for the year under Parts IV, IV.1, VI and VI.1, on the date on or before which each payment is required to be made, an amount equal to the lesser of

(a)  the amount by which the amount determined under the first paragraph for the year exceeds the aggregate of all amounts each of which is the portion of that amount that may reasonably be considered to be deemed to have been paid to the Minister under this paragraph in the year but before that date; and

(b)  the amount by which the amount of that payment, determined without reference to this chapter, exceeds the aggregate of all amounts each of which is an amount that is deemed, under this chapter but otherwise than under the first paragraph, to have been paid to the Minister on that date, for the purpose of computing that payment.

However, the first paragraph does not apply to a qualified corporation whose gross revenue for the particular year from the carrying on of the business referred to in that paragraph is less than $150,000 or, if the taxation year of a qualified corporation has fewer than 52 weeks, less than the amount obtained by multiplying $150,000 by the proportion that the number of weeks in the taxation year is of 52.

For the purposes of subparagraphs ii and iii of subparagraph a of the first paragraph, the amount of $60,000 or $40,000 is to be replaced by the amount obtained by multiplying that amount by the proportion that the number of days in the taxation year or fiscal period of the qualified outside consultant during which the qualified designer or qualified patternmaker, as the case may be, reports for work at an establishment of the employer situated in Québec and during which the qualified designer or qualified patternmaker carries out the design activity or the pattern drafting activity provided for in the contract, is of 365.

The documents to which the first paragraph refers are

(a)  the prescribed form containing the prescribed information;

(b)  a copy of the certificate issued for the particular year to the qualified corporation by the Minister of Economy and Innovation; and

(c)  a copy of the certificate of qualification issued to the qualified outside consultant by the Minister of Economy and Innovation.

1995, c. 1, s. 157; 1995, c. 63, s. 180; 1997, c. 3, s. 71; 1997, c. 14, s. 223; 1997, c. 31, s. 143; 1999, c. 8, s. 20; 2001, c. 51, s. 169; 2003, c. 9, s. 276; 2003, c. 29, s. 135; 2004, c. 21, s. 349; 2006, c. 13, s. 136; 2015, c. 21, s. 446; 2019, c. 14, s. 352; 2019, c. 29, s. 1.

2019-06-19

1029.8.36.5. A qualified corporation in respect of which the Minister of Economic Development, Innovation and Export Trade issues a certificate for a particular taxation year, in respect of a design activity, in connection with a business it carries on in Québec, carried out under a contract entered into with a qualified outside consultant and that encloses the documents referred to in the sixth paragraph with the fiscal return it is required to file under section 1000 for the particular year, is deemed, subject to the third paragraph, to have paid to the Minister on the corporation’s balance-due day for that year, on account of its tax payable for that year under this Part, an amount equal to 12% of

(a)   if the qualified corporation is not dealing at arm’s length with the qualified outside consultant at the time the contract is entered into, the aggregate of all amounts each of which, determined in relation to a qualified designer or, as the case may be, to a qualified patternmaker, who reports for work at an establishment of the qualified outside consultant situated in Québec, is the expenditure that it incurs in the particular year, to the extent that the expenditure is paid, and that is the least of

i.  the part of the cost of the contract that may reasonably be attributed to the wages paid by the qualified outside consultant to the qualified designer or qualified patternmaker in a taxation year of the qualified outside consultant or, if the qualified outside consultant is a partnership, in a fiscal period of the qualified outside consultant and before the end of the particular year, in relation to the part of the design activity, or to the part of the pattern drafting activity provided for in the contract, that is carried out in Québec in the particular year or in a preceding taxation year, or that could be so attributed if the qualified outside consultant had such employees,

ii.  $60,000, if the wages referred to in subparagraph i, in relation to a taxation year or fiscal period of the qualified outside consultant, are paid or, as the case may be, deemed to be paid to a qualified designer, and

iii.  $40,000, if the wages referred to in subparagraph i, in relation to a taxation year or fiscal period of the qualified outside consultant, are paid or, as the case may be, deemed to be paid to a qualified patternmaker; and

(b)  if the qualified corporation is dealing at arm’s length with the qualified outside consultant at the time the contract is entered into, the expenditure that it incurs in the year and that is 65% of all or part of the cost of the contract that may reasonably be attributed to the design activity or to a pattern drafting activity provided for in the contract that the qualified outside consultant carried out in Québec in the particular year or a preceding taxation year, to the extent that the expenditure is paid.

For the purposes of the first paragraph, where an expenditure incurred in a taxation year is reasonably attributable to the carrying out of a design activity in a taxation year subsequent to the year, the expenditure is deemed to be incurred in that subsequent taxation year.

For the purpose of computing the payments that a corporation referred to in the first paragraph is required to make under subparagraph a of the first paragraph of section 1027, or any of sections 1145, 1159.7, 1175 and 1175.19 where they refer to that subparagraph a, the corporation is deemed to have paid to the Minister, on account of the aggregate of its tax payable for the year under this Part and of its tax payable for the year under Parts IV, IV.1, VI and VI.1, on the date on or before which each payment is required to be made, an amount equal to the lesser of

(a)  the amount by which the amount determined under the first paragraph for the year exceeds the aggregate of all amounts each of which is the portion of that amount that may reasonably be considered to be deemed to have been paid to the Minister under this paragraph in the year but before that date; and

(b)  the amount by which the amount of that payment, determined without reference to this chapter, exceeds the aggregate of all amounts each of which is an amount that is deemed, under this chapter but otherwise than under the first paragraph, to have been paid to the Minister on that date, for the purpose of computing that payment.

However, the first paragraph does not apply to a qualified corporation whose gross revenue for the particular year from the carrying on of the business referred to in that paragraph is less than $150,000 or, if the taxation year of a qualified corporation has fewer than 52 weeks, less than the amount obtained by multiplying $150,000 by the proportion that the number of weeks in the taxation year is of 52.

For the purposes of subparagraphs ii and iii of subparagraph a of the first paragraph, the amount of $60,000 or $40,000 is to be replaced by the amount obtained by multiplying that amount by the proportion that the number of days in the taxation year or fiscal period of the qualified outside consultant during which the qualified designer or qualified patternmaker, as the case may be, reports for work at an establishment of the employer situated in Québec and during which the qualified designer or qualified patternmaker carries out the design activity or the pattern drafting activity provided for in the contract, is of 365.

The documents to which the first paragraph refers are

(a)  the prescribed form containing the prescribed information;

(b)  a copy of the certificate issued for the particular year to the qualified corporation by the Minister of Economic Development, Innovation and Export Trade; and

(c)  a copy of the certificate of qualification issued to the qualified outside consultant by the Minister of Economic Development, Innovation and Export Trade.

1995, c. 1, s. 157; 1995, c. 63, s. 180; 1997, c. 3, s. 71; 1997, c. 14, s. 223; 1997, c. 31, s. 143; 1999, c. 8, s. 20; 2001, c. 51, s. 169; 2003, c. 9, s. 276; 2003, c. 29, s. 135; 2004, c. 21, s. 349; 2006, c. 13, s. 136; 2015, c. 21, s. 446; 2019, c. 14, s. 352.

2015-10-21

1029.8.36.5. A qualified corporation in respect of which the Minister of Economic Development, Innovation and Export Trade issues a certificate for a particular taxation year, in respect of a design activity, in connection with a business it carries on in Québec, carried out under a contract entered into with a qualified outside consultant and that encloses the documents referred to in the sixth paragraph with the fiscal return it is required to file under section 1000 for the particular year, is deemed, subject to the third paragraph, to have paid to the Minister on the corporation’s balance-due day for that year, on account of its tax payable for that year under this Part, an amount equal to 12% of

(a)  if the qualified corporation is not dealing at arm’s length with the qualified outside consultant at the time the contract is entered into, the aggregate of all amounts each of which, determined in relation to a qualified designer or, as the case may be, to a qualified patternmaker, who reports for work at an establishment of the qualified outside consultant situated in Québec, is the expenditure that it incurs in the particular year, to the extent that the expenditure is paid and is reasonable in the circumstances, and that is the least of

i.  the part of the cost of the contract that may reasonably be attributed to the wages paid by the qualified outside consultant to the qualified designer or qualified patternmaker in a taxation year of the qualified outside consultant or, if the qualified outside consultant is a partnership, in a fiscal period of the qualified outside consultant and before the end of the particular year, in relation to the part of the design activity, or to the part of the pattern drafting activity provided for in the contract, that is carried out in Québec in the particular year or in a preceding taxation year, or that could be so attributed if the qualified outside consultant had such employees,

ii.  $60,000, if the wages referred to in subparagraph i, in relation to a taxation year or fiscal period of the qualified outside consultant, are paid or, as the case may be, deemed to be paid to a qualified designer, and

iii.  $40,000, if the wages referred to in subparagraph i, in relation to a taxation year or fiscal period of the qualified outside consultant, are paid or, as the case may be, deemed to be paid to a qualified patternmaker; and

(b)  if the qualified corporation is dealing at arm’s length with the qualified outside consultant at the time the contract is entered into, the expenditure that it incurs in the year and that is 65% of all or part of the cost of the contract that may reasonably be attributed to the design activity or to a pattern drafting activity provided for in the contract that the qualified outside consultant carried out in Québec in the particular year or a preceding taxation year, to the extent that the expenditure is paid and is reasonable in the circumstances.

For the purposes of the first paragraph, where an expenditure incurred in a taxation year is reasonably attributable to the carrying out of a design activity in a taxation year subsequent to the year, the expenditure is deemed to be incurred in that subsequent taxation year.

For the purpose of computing the payments that a corporation referred to in the first paragraph is required to make under subparagraph a of the first paragraph of section 1027, or any of sections 1145, 1159.7, 1175 and 1175.19 where they refer to that subparagraph a, the corporation is deemed to have paid to the Minister, on account of the aggregate of its tax payable for the year under this Part and of its tax payable for the year under Parts IV, IV.1, VI and VI.1, on the date on or before which each payment is required to be made, an amount equal to the lesser of

(a)  the amount by which the amount determined under the first paragraph for the year exceeds the aggregate of all amounts each of which is the portion of that amount that may reasonably be considered to be deemed to have been paid to the Minister under this paragraph in the year but before that date; and

(b)  the amount by which the amount of that payment, determined without reference to this chapter, exceeds the aggregate of all amounts each of which is an amount that is deemed, under this chapter but otherwise than under the first paragraph, to have been paid to the Minister on that date, for the purpose of computing that payment.

However, the first paragraph does not apply to a qualified corporation whose gross revenue for the particular year from the carrying on of the business referred to in that paragraph is less than $150,000 or, if the taxation year of a qualified corporation has fewer than 52 weeks, less than the amount obtained by multiplying $150,000 by the proportion that the number of weeks in the taxation year is of 52.

For the purposes of subparagraphs ii and iii of subparagraph a of the first paragraph, the amount of $60,000 or $40,000 is to be replaced by the amount obtained by multiplying that amount by the proportion that the number of days in the taxation year or fiscal period of the qualified outside consultant during which the qualified designer or qualified patternmaker, as the case may be, reports for work at an establishment of the employer situated in Québec and during which the qualified designer or qualified patternmaker carries out the design activity or the pattern drafting activity provided for in the contract, is of 365.

The documents to which the first paragraph refers are

(a)  the prescribed form containing the prescribed information;

(b)  a copy of the certificate issued for the particular year to the qualified corporation by the Minister of Economic Development, Innovation and Export Trade; and

(c)  a copy of the certificate of qualification issued to the qualified outside consultant by the Minister of Economic Development, Innovation and Export Trade.

1995, c. 1, s. 157; 1995, c. 63, s. 180; 1997, c. 3, s. 71; 1997, c. 14, s. 223; 1997, c. 31, s. 143; 1999, c. 8, s. 20; 2001, c. 51, s. 169; 2003, c. 9, s. 276; 2003, c. 29, s. 135; 2004, c. 21, s. 349; 2006, c. 13, s. 136; 2015, c. 21, s. 446.

2006-06-13

1029.8.36.5. A qualified corporation in respect of which the Minister of Economic Development, Innovation and Export Trade issues a certificate for a particular taxation year, in respect of a design activity, in connection with a business it carries on in Québec, carried out under a contract entered into with a qualified outside consultant and that encloses the documents referred to in the sixth paragraph with the fiscal return it is required to file under section 1000 for the particular year, is deemed, subject to the third paragraph, to have paid to the Minister on the corporation’s balance-due day for that year, on account of its tax payable for that year under this Part, an amount equal to 15% of

(a)  if the qualified corporation is not dealing at arm’s length with the qualified outside consultant at the time the contract is entered into, the aggregate of all amounts each of which, determined in relation to a qualified designer or, as the case may be, to a qualified patternmaker, who reports for work at an establishment of the qualified outside consultant situated in Québec, is the expenditure that it incurs in the particular year, to the extent that the expenditure is paid and is reasonable in the circumstances, and that is the least of

i.  the part of the cost of the contract that may reasonably be attributed to the wages paid by the qualified outside consultant to the qualified designer or qualified patternmaker in a taxation year of the qualified outside consultant or, if the qualified outside consultant is a partnership, in a fiscal period of the qualified outside consultant and before the end of the particular year, in relation to the part of the design activity, or to the part of the pattern drafting activity provided for in the contract, that is carried out in Québec in the particular year or in a preceding taxation year, or that could be so attributed if the qualified outside consultant had such employees,

ii.  $60,000, if the wages referred to in subparagraph i, in relation to a taxation year or fiscal period of the qualified outside consultant, are paid or, as the case may be, deemed to be paid to a qualified designer, and

iii.  $40,000, if the wages referred to in subparagraph i, in relation to a taxation year or fiscal period of the qualified outside consultant, are paid or, as the case may be, deemed to be paid to a qualified patternmaker; and

(b)  if the qualified corporation is dealing at arm’s length with the qualified outside consultant at the time the contract is entered into, the expenditure that it incurs in the year and that is 65% of all or part of the cost of the contract that may reasonably be attributed to the design activity or to a pattern drafting activity provided for in the contract that the qualified outside consultant carried out in Québec in the particular year or a preceding taxation year, to the extent that the expenditure is paid and is reasonable in the circumstances.

For the purposes of the first paragraph, where an expenditure incurred in a taxation year is reasonably attributable to the carrying out of a design activity in a taxation year subsequent to the year, the expenditure is deemed to be incurred in that subsequent taxation year.

For the purpose of computing the payments that a corporation referred to in the first paragraph is required to make under subparagraph a of the first paragraph of section 1027, or any of sections 1145, 1159.7, 1175 and 1175.19 where they refer to that subparagraph a, the corporation is deemed to have paid to the Minister, on account of the aggregate of its tax payable for the year under this Part and of its tax payable for the year under Parts IV, IV.1, VI and VI.1, on the date on or before which each payment is required to be made, an amount equal to the lesser of

(a)  the amount by which the amount determined under the first paragraph for the year exceeds the aggregate of all amounts each of which is the portion of that amount that may reasonably be considered to be deemed to have been paid to the Minister under this paragraph in the year but before that date; and

(b)  the amount by which the amount of that payment, determined without reference to this chapter, exceeds the aggregate of all amounts each of which is an amount that is deemed, under this chapter but otherwise than under the first paragraph, to have been paid to the Minister on that date, for the purpose of computing that payment.

However, the first paragraph does not apply to a qualified corporation whose gross revenue for the particular year from the carrying on of the business referred to in that paragraph is less than $150,000 or, if the taxation year of a qualified corporation has fewer than 52 weeks, less than the amount obtained by multiplying $150,000 by the proportion that the number of weeks in the taxation year is of 52.

For the purposes of subparagraphs ii and iii of subparagraph a of the first paragraph, the amount of $60,000 or $40,000 is to be replaced by the amount obtained by multiplying that amount by the proportion that the number of days in the taxation year or fiscal period of the qualified outside consultant during which the qualified designer or qualified patternmaker, as the case may be, reports for work at an establishment of the employer situated in Québec and during which the qualified designer or qualified patternmaker carries out the design activity or the pattern drafting activity provided for in the contract, is of 365.

The documents to which the first paragraph refers are

(a)  the prescribed form containing the prescribed information;

(b)  a copy of the certificate issued for the particular year to the qualified corporation by the Minister of Economic Development, Innovation and Export Trade; and

(c)  a copy of the certificate of qualification issued to the qualified outside consultant by the Minister of Economic Development, Innovation and Export Trade.

1995, c. 1, s. 157; 1995, c. 63, s. 180; 1997, c. 3, s. 71; 1997, c. 14, s. 223; 1997, c. 31, s. 143; 1999, c. 8, s. 20; 2001, c. 51, s. 169; 2003, c. 9, s. 276; 2003, c. 29, s. 135; 2004, c. 21, s. 349; 2006, c. 13, s. 136.

2006-03-01

1029.8.36.5. A qualified corporation in respect of which the Minister of Economic and Regional Development and Research issues, for a taxation year, a certificate in respect of a design activity in connection with a business it carries on in Québec and that encloses with its fiscal return it is required to file for the year under section 1000 the prescribed form containing the prescribed information and a copy of the certificate, is deemed, subject to the third paragraph, to have paid to the Minister on the corporation’s balance-due day for the year, on account of its tax payable for that year under this Part, an amount equal to 15% of the expenditure incurred by it in the year and that is part or all of the cost of an outside consulting contract mentioned in the certificate, to the extent that the expenditure is paid and

(a)  is reasonably attributable to the carrying out of the design activity in the year or a preceding taxation year; and

(b)  is reasonable in the circumstances.

For the purposes of the first paragraph, where an expenditure incurred in a taxation year is reasonably attributable to the carrying out of a design activity in a taxation year subsequent to the year, the expenditure is deemed to be incurred in that subsequent taxation year.

For the purpose of computing the payments that a corporation referred to in the first paragraph is required to make under subparagraph a of the first paragraph of section 1027, or any of sections 1145, 1159.7, 1175 and 1175.19 where they refer to that subparagraph a, the corporation is deemed to have paid to the Minister, on account of the aggregate of its tax payable for the year under this Part and of its tax payable for the year under Parts IV, IV.1, VI and VI.1, on the date on or before which each payment is required to be made, an amount equal to the lesser of

(a)  the amount by which the amount determined under the first paragraph for the year exceeds the aggregate of all amounts each of which is the portion of that amount that may reasonably be considered to be deemed to have been paid to the Minister under this paragraph in the year but before that date; and

(b)  the amount by which the amount of that payment, determined without reference to this chapter, exceeds the aggregate of all amounts each of which is an amount that is deemed, under this chapter but otherwise than under the first paragraph, to have been paid to the Minister on that date, for the purpose of computing that payment.

1995, c. 1, s. 157; 1995, c. 63, s. 180; 1997, c. 3, s. 71; 1997, c. 14, s. 223; 1997, c. 31, s. 143; 1999, c. 8, s. 20; 2001, c. 51, s. 169; 2003, c. 9, s. 276; 2003, c. 29, s. 135; O.C. 222-2004; 2004, c. 21, s. 349.