I-3 - Taxation Act

Section 771.1 Disposition versions

2021-06-02

771.1. In this Title,

“adjusted aggregate investment income” of a corporation for a taxation year means the amount determined in respect of the corporation for the year under the definition of “adjusted aggregate investment income” in subsection 7 of section 125 of the Income Tax Act;

“biotechnology development centre” means a building designated as such by Investissement Québec;

“corporation dedicated to the commercialization of intellectual property” has the meaning assigned by sections 771.14 and 771.15;

“designated member”, of a particular partnership in a taxation year, means a Canadian-controlled private corporation that provides (directly or indirectly, in any manner whatever) services or property to the particular partnership at any time in the corporation’s taxation year if

(a)  the corporation is not, at any time in the taxation year, a member of the particular partnership; and

(b)  at any time in the taxation year,

i.  one of the corporation’s shareholders holds a direct or indirect interest in the particular partnership, or

ii.  if subparagraph i does not apply, the corporation does not deal at arm’s length with a person that holds a direct or indirect interest in the particular partnership, and it may not be considered that all or substantially all of the corporation’s income from an eligible business for the year is from the provision of services or property to persons with which the corporation deals at arm’s length or to partnerships (other than the particular partnership) with which the corporation deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest;

“eligibility date” of a corporation means

(a)  where the corporation carries on or may carry on its business in an information technology development centre, 26 March 1997;

(b)  where the corporation carries on or may carry on its business in a new economy centre, 10 March 1999; and

(c)  where the corporation carries on or may carry on its business in a biotechnology development centre, 30 March 2001;

“eligibility period” of a corporation means the five-year period that begins on the day of coming into force of the certificate referred to in paragraph a of section 771.12 that was issued in its respect or, if it is later, on the corporation’s eligibility date, unless the corporation ceases to be an exempt corporation,

(a)  at the beginning of a particular taxation year following an acquisition of control referred to in subparagraph f of the first paragraph of section 771.13 that occurred in the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends immediately before the acquisition of control;

(b)  at the beginning of a particular taxation year following an election by the corporation under subparagraph g of the first paragraph of section 771.13 to become a specified corporation from a particular day of the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends the day before that particular day; or

(c)  in a particular taxation year, other than the one referred to in paragraph a or b, and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends on the last day of the taxation year preceding the particular year;

“eligible business”, in relation to any business carried on by a corporation, means any business carried on by a corporation other than a specified investment business or a personal services business and includes, except for the purposes of subparagraph a of the second paragraph of section 771.6, subparagraph d of the first paragraph of section 771.8.3 and subparagraph i of subparagraph c of the second paragraph of section 771.8.5, an adventure or concern in the nature of trade;

“eligible commercialization business” of a corporation, at any time, means an eligible business in respect of which the corporation holds a qualification certificate that was issued by the Minister of Economy and Innovation and that is valid at that time;

“eligible institute” means an eligible public research centre or an eligible university entity, within the meaning of paragraphs a.1 and f of section 1029.8.1;

“exempt corporation” has the meaning assigned by sections 771.12 and 771.13;

“exemption period” of a corporation means the period that begins at the beginning of the corporation’s first taxation year and ends on the earlier of

(a)  the last day of the five-year period that begins at the beginning of the corporation’s first taxation year, and

(b)  the last day of the taxation year preceding the taxation year in which the corporation ceases to be a qualified corporation;

“financial institution” means a corporation referred to in paragraph a of section 1132;

“information technology development centre” means a building designated as such by the Minister of Finance;

“manufacturing corporation” for a taxation year that begins before 1 January 2017 means a corporation whose proportion of manufacturing or processing activities for the taxation year is greater than 25%;

“new economy centre” means one or more buildings within the same region that are designated by Investissement Québec as constituting a marketplace for the new economy;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 31 May 2007, 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;

“primary and manufacturing sectors corporation” for a taxation year that begins after 31 December 2016 means a corporation whose proportion of primary and manufacturing sectors activities for the taxation year is greater than 25%;

“proportion of primary and manufacturing sectors activities” of a corporation for a taxation year means the prescribed proportion;

“proportion of the manufacturing or processing activities” of a corporation for a taxation year means the proportion that the amount determined in respect of the corporation for the year under paragraph a of section 5200 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) is of the amount determined in respect of the corporation for the year under paragraph b of section 5200 of those Regulations;

“qualified corporation” has the meaning assigned by sections 771.5 to 771.7;

“specified corporation” has the meaning assigned by section 1029.8.36.0.17;

“specified corporate income”, of a corporation for a taxation year, means the lesser of the amount that the Minister determines to be reasonable in the circumstances and the lesser of

(a)  the aggregate of all amounts each of which is the corporation’s income from an eligible business for the year (other than its specified farming or fishing income for the year) from the provision of services or property to a private corporation (directly or indirectly, in any manner whatever) if

i.  at any time in the year, the corporation (or one of its shareholders) or a person who does not deal at arm’s length with the corporation (or one of its shareholders) holds a direct or indirect interest in the private corporation, and

ii.  it may not be considered that all or substantially all of the corporation’s income for the year from an eligible business is from the provision of services or property to persons (other than the private corporation) with which the corporation deals at arm’s length or to partnerships with which the corporation deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest; and

(b)  the aggregate of all amounts each of which is the portion of the business limit of a private corporation described in paragraph a for a taxation year that the private corporation assigns to the corporation in accordance with section 771.2.1.4.2;

“specified farming or fishing income” of a particular corporation for a taxation year means the income of the particular corporation for the year (other than an amount included in computing the particular corporation’s income under section 795) from the sale of the farming products or fishing catches of the particular corporation’s farming or fishing business to another corporation with which the particular corporation deals at arm’s length;

“specified investment business” carried on by a corporation in a taxation year means a business, other than a business carried on by a savings and credit union or a business of leasing property other than immovable property, the principal purpose of which is to derive income from property, including interest, dividends, rents or royalties, unless the corporation employs in the business throughout the year more than five full-time employees, or in the course of carrying on an eligible business, any other corporation associated with it provides financial, administrative, maintenance, managerial or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than five full-time employees if those services had not been provided;

“specified partnership business limit”, of a person for a taxation year, at a particular time, means the amount determined by the formula

(A/B) × C – D;

“specified partnership income” of a corporation for a taxation year means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member or a designated member in the year that would be a primary and manufacturing sectors corporation for the year if the partnership were a corporation for its last fiscal period that ends in the year, if that fiscal period were its taxation year and if its proportion of primary and manufacturing sectors activities for the year were determined without reference to the activities of any other partnership of which it is a member, or that is a partnership described in section 771.2.1.2.2 for the year, equal to the least of

i.  the aggregate of all amounts each of which is an amount, in respect of an eligible business carried on in Canada by the corporation as a member, or a designated member, of the partnership, equal to the amount by which the aggregate of all amounts each of which is the corporation’s share of the income (determined in accordance with Title XI of Book III) of the partnership from the business for a fiscal period of the business that ends in the year, an amount of the corporation’s particular income for the year from the provision (directly or indirectly, in any manner whatever) of services or property to the partnership, or an amount included in computing the corporation’s income for the year under any of sections 217.19, 217.20 and 217.28 in respect of the business exceeds the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from the business (other than an amount that was deducted by the partnership in computing its income from the business or in computing the corporation’s particular income) or an amount deducted in that computation for the year in respect of the business under section 217.21 or 217.27,

ii.  where the corporation is a member of the partnership, the corporation’s specified partnership business limit for the year and, where the corporation is a designated member of the partnership, the aggregate of all amounts assigned to it in accordance with section 771.2.1.4.3 for the year or, if no such amounts have been assigned, nil, and

iii.  nil, where the corporation is (directly or indirectly, through one or more other partnerships) a member, or a designated member, of the partnership in the year and the partnership provides services or property to either

(1)  a private corporation (directly or indirectly, in any manner whatever) in the year, if the corporation (or one of its shareholders) or a person who does not deal at arm’s length with the corporation (or one of its shareholders) holds a direct or indirect interest in the private corporation, and if it may not be considered that all or substantially all of the partnership’s income for the year from an eligible business is from the provision of services or property to persons (other than the private corporation) that deal at arm’s length with the partnership or with any person that holds a direct or indirect interest in the partnership or to other partnerships with which the partnership deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest, or

(2)  a particular partnership (directly or indirectly, in any manner whatever) in the year, if the corporation (or one of its shareholders) does not deal at arm’s length with the particular partnership or with a person that holds a direct or indirect interest in the particular partnership, and if it may not be considered that all or substantially all of the partnership’s income for the year from an eligible business is from the provision of services or property to persons that deal at arm’s length with the partnership or with any person that holds a direct or indirect interest in the partnership or to other partnerships (other than the particular partnership) with which the partnership deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest; and

(b)  the lesser of

i.  the aggregate of the amounts determined in respect of the corporation for the year under subparagraphs i and ii of paragraph a of section 771.2.1.2, and

ii.  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member or a designated member in the year, equal to the amount by which the amount determined in respect of the partnership for the year under subparagraph i of paragraph a exceeds the amount determined in respect of the partnership for the year under subparagraph ii of that paragraph a, according to whether the corporation is a member or a designated member of the partnership;

“specified partnership loss” of a corporation for a taxation year means the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year that would be a primary and manufacturing sectors corporation for the year if the partnership were a corporation for its last fiscal period that ends in the year, if that fiscal period were its taxation year and if its proportion of primary and manufacturing sectors activities for the year were determined without reference to the activities of any other partnership of which it is a member, or that is a partnership described in section 771.2.1.2.2 for the year, equal to the aggregate of

(a)  the aggregate of all amounts each of which is the corporation’s share of the loss, determined in accordance with Title XI of Book III, of the partnership for a fiscal period that ends in the year from an eligible business carried on in Canada by the corporation as a member of the partnership; and

(b)  the aggregate of all amounts each of which is the amount by which the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from an eligible business carried on in Canada by the corporation as a member of the partnership, other than an amount that was deducted by the partnership in computing its income from the business, exceeds the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period that ends in the year;

“tax-free period” of a corporation means the period beginning at the time of its incorporation and ending

(a)  on the last day of the ten-year period beginning at that time; or

(b)  if it is earlier than the day referred to in paragraph a, on the last day of the taxation year that precedes the taxation year in which the corporation ceases to be a corporation dedicated to the commercialization of intellectual property.

For the purposes of the definition of “information technology development centre” in the first paragraph, premises designated by Investissement Québec are deemed to be part of a building referred to in that definition.

For the purposes of the definition of “new economy centre” in the first paragraph, premises designated by Investissement Québec are deemed to form part of a building referred to in that definition.

Despite the definition of “eligibility period” in the first paragraph, the eligibility period of a corporation does not include any day in a taxation year for which the corporation is authorized by Investissement Québec to carry on its business outside the information technology development centre, the new economy centre or the biotechnology development centre that is mentioned in the certificate referred to in paragraph a of section 771.12, if, during that day, none of the activities of its business are carried on in Québec.

In the formula in the definition of “specified partnership business limit” in the first paragraph,

(a)  A is the aggregate of all amounts each of which is the person’s share of the income (determined in accordance with Title XI of Book III) of a partnership of which the person is a member from an eligible business carried on in Canada for a fiscal period ending in the year;

(b)  B is the aggregate of all amounts each of which is the partnership’s income from an eligible business carried on in Canada for a fiscal period referred to in subparagraph i of paragraph a of the definition of “specified partnership income” in the first paragraph;

(c)  C is the lesser of the business limit specified in the first paragraph of section 771.2.1.3 for a corporation that is not associated in a taxation year with one or more other Canadian-controlled private corporations and the proportion of that business limit that the number of days in a fiscal period of the partnership that ends in the year is of 365; and

(d)  D is the aggregate of all amounts each of which is an amount that the person assigns in accordance with section 771.2.1.4.3.

For the purposes of the definition of “oil refining corporation” in the first paragraph, the following rules apply for the purpose of determining whether a corporation is associated with a partnership or a trust at any time:

(a)  a partnership is deemed to be a corporation the taxation year of which corresponds to its fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(b)  a trust is deemed to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this subparagraph b referred to as the “distribution date”), and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  if any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  if subparagraph 1 does not apply and if that time occurs before the distribution date, are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom a property of the trust or a property for which it was substituted was directly or indirectly received.

1981, c. 12, s. 9; 1987, c. 21, s. 28; 1989, c. 5, s. 118; 1992, c. 1, s. 66; 1995, c. 63, s. 68; 1997, c. 3, s. 71; 1997, c. 85, s. 153; 1998, c. 17, s. 64; 1999, c. 83, s. 102; 2000, c. 39, s. 76; 2001, c. 51, s. 72; 2001, c. 69, s. 12; 2002, c. 9, s. 20; 2003, c. 9, s. 98; 2004, c. 21, s. 201; 2005, c. 23, s. 103; 2005, c. 38, s. 172; 2007, c. 12, s. 86; 2009, c. 5, s. 312; 2009, c. 15, s. 150; 2010, c. 5, s. 67; 2010, c. 25, s. 77; 2015, c. 21, s. 312; 2015, c. 24, s. 109; 2017, c. 1, s. 212; 2017, c. 29, s. 155; 2019, c. 14, s. 240; 2019, c. 29, s. 1; 2020, c. 16, s. 115; 2021, c. 14, s. 90.

2020-09-24

771.1. In this Title,

“adjusted aggregate investment income” of a corporation for a taxation year means the amount determined in respect of the corporation for the year under the definition of “adjusted aggregate investment income” in subsection 7 of section 125 of the Income Tax Act;

“biotechnology development centre” means a building designated as such by Investissement Québec;

“corporation dedicated to the commercialization of intellectual property” has the meaning assigned by sections 771.14 and 771.15;

“designated member”, of a particular partnership in a taxation year, means a Canadian-controlled private corporation that provides (directly or indirectly, in any manner whatever) services or property to the particular partnership at any time in the corporation’s taxation year if

(a)  the corporation is not, at any time in the taxation year, a member of the particular partnership; and

(b)  at any time in the taxation year,

i.  one of the corporation’s shareholders holds a direct or indirect interest in the particular partnership, or

ii.  if subparagraph i does not apply, the corporation does not deal at arm’s length with a person that holds a direct or indirect interest in the particular partnership, and it may not be considered that all or substantially all of the corporation’s income from an eligible business for the year is from the provision of services or property to persons with which the corporation deals at arm’s length or to partnerships (other than the particular partnership) with which the corporation deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest;

“eligibility date” of a corporation means

(a)  where the corporation carries on or may carry on its business in an information technology development centre, 26 March 1997;

(b)  where the corporation carries on or may carry on its business in a new economy centre, 10 March 1999; and

(c)  where the corporation carries on or may carry on its business in a biotechnology development centre, 30 March 2001;

“eligibility period” of a corporation means the five-year period that begins on the day of coming into force of the certificate referred to in paragraph a of section 771.12 that was issued in its respect or, if it is later, on the corporation’s eligibility date, unless the corporation ceases to be an exempt corporation,

(a)  at the beginning of a particular taxation year following an acquisition of control referred to in subparagraph f of the first paragraph of section 771.13 that occurred in the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends immediately before the acquisition of control;

(b)  at the beginning of a particular taxation year following an election by the corporation under subparagraph g of the first paragraph of section 771.13 to become a specified corporation from a particular day of the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends the day before that particular day; or

(c)  in a particular taxation year, other than the one referred to in paragraph a or b, and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends on the last day of the taxation year preceding the particular year;

“eligible business”, in relation to any business carried on by a corporation, means any business carried on by a corporation other than a specified investment business or a personal services business and includes, except for the purposes of subparagraph a of the second paragraph of section 771.6, subparagraph d of the first paragraph of section 771.8.3 and subparagraph i of subparagraph c of the second paragraph of section 771.8.5, an adventure or concern in the nature of trade;

“eligible commercialization business” of a corporation, at any time, means an eligible business in respect of which the corporation holds a qualification certificate that was issued by the Minister of Economy and Innovation and that is valid at that time;

“eligible institute” means an eligible public research centre or an eligible university entity, within the meaning of paragraphs a.1 and f of section 1029.8.1;

“exempt corporation” has the meaning assigned by sections 771.12 and 771.13;

“exemption period” of a corporation means the period that begins at the beginning of the corporation’s first taxation year and ends on the earlier of

(a)  the last day of the five-year period that begins at the beginning of the corporation’s first taxation year, and

(b)  the last day of the taxation year preceding the taxation year in which the corporation ceases to be a qualified corporation;

“financial institution” means a corporation referred to in paragraph a of section 1132;

“information technology development centre” means a building designated as such by the Minister of Finance;

“manufacturing corporation” for a taxation year that begins before 1 January 2017 means a corporation whose proportion of manufacturing or processing activities for the taxation year is greater than 25%;

“new economy centre” means one or more buildings within the same region that are designated by Investissement Québec as constituting a marketplace for the new economy;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 31 May 2007, 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;

“primary and manufacturing sectors corporation” for a taxation year that begins after 31 December 2016 means a corporation whose proportion of primary and manufacturing sectors activities for the taxation year is greater than 25%;

“proportion of primary and manufacturing sectors activities” of a corporation for a taxation year means the prescribed proportion;

“proportion of the manufacturing or processing activities” of a corporation for a taxation year means the proportion that the amount determined in respect of the corporation for the year under paragraph a of section 5200 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) is of the amount determined in respect of the corporation for the year under paragraph b of section 5200 of those Regulations;

“qualified corporation” has the meaning assigned by sections 771.5 to 771.7;

“specified corporation” has the meaning assigned by section 1029.8.36.0.17;

“specified corporate income”, of a corporation for a taxation year, means the lesser of the amount that the Minister determines to be reasonable in the circumstances and the lesser of

(a)  the aggregate of all amounts each of which is the corporation’s income from an eligible business for the year from the provision of services or property to a private corporation (directly or indirectly, in any manner whatever) if

i.  at any time in the year, the corporation (or one of its shareholders) or a person who does not deal at arm’s length with the corporation (or one of its shareholders) holds a direct or indirect interest in the private corporation, and

ii.  it may not be considered that all or substantially all of the corporation’s income for the year from an eligible business is from the provision of services or property to persons (other than the private corporation) with which the corporation deals at arm’s length or to partnerships with which the corporation deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest; and

(b)  the aggregate of all amounts each of which is the portion of the business limit of a private corporation described in paragraph a for a taxation year that the private corporation assigns to the corporation in accordance with section 771.2.1.4.2;

“specified investment business” carried on by a corporation in a taxation year means a business, other than a business carried on by a savings and credit union or a business of leasing property other than immovable property, the principal purpose of which is to derive income from property, including interest, dividends, rents or royalties, unless the corporation employs in the business throughout the year more than five full-time employees, or in the course of carrying on an eligible business, any other corporation associated with it provides financial, administrative, maintenance, managerial or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than five full-time employees if those services had not been provided;

“specified partnership business limit”, of a person for a taxation year, at a particular time, means the amount determined by the formula

(A/B) × C – D;

“specified partnership income” of a corporation for a taxation year means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member or a designated member in the year that would be a primary and manufacturing sectors corporation for the year if the partnership were a corporation for its last fiscal period that ends in the year, if that fiscal period were its taxation year and if its proportion of primary and manufacturing sectors activities for the year were determined without reference to the activities of any other partnership of which it is a member, or that is a partnership described in section 771.2.1.2.2 for the year, equal to the least of

i.  the aggregate of all amounts each of which is an amount, in respect of an eligible business carried on in Canada by the corporation as a member, or a designated member, of the partnership, equal to the amount by which the aggregate of all amounts each of which is the corporation’s share of the income (determined in accordance with Title XI of Book III) of the partnership from the business for a fiscal period of the business that ends in the year, an amount of the corporation’s particular income for the year from the provision (directly or indirectly, in any manner whatever) of services or property to the partnership, or an amount included in computing the corporation’s income for the year under any of sections 217.19, 217.20 and 217.28 in respect of the business exceeds the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from the business (other than an amount that was deducted by the partnership in computing its income from the business or in computing the corporation’s particular income) or an amount deducted in that computation for the year in respect of the business under section 217.21 or 217.27,

ii.  where the corporation is a member of the partnership, the corporation’s specified partnership business limit for the year and, where the corporation is a designated member of the partnership, the aggregate of all amounts assigned to it in accordance with section 771.2.1.4.3 for the year or, if no such amounts have been assigned, nil, and

iii.  nil, where the corporation is (directly or indirectly, through one or more other partnerships) a member, or a designated member, of the partnership in the year and the partnership provides services or property to either

(1)  a private corporation (directly or indirectly, in any manner whatever) in the year, if the corporation (or one of its shareholders) or a person who does not deal at arm’s length with the corporation (or one of its shareholders) holds a direct or indirect interest in the private corporation, and if it may not be considered that all or substantially all of the partnership’s income for the year from an eligible business is from the provision of services or property to persons (other than the private corporation) that deal at arm’s length with the partnership or with any person that holds a direct or indirect interest in the partnership or to other partnerships with which the partnership deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest, or

(2)  a particular partnership (directly or indirectly, in any manner whatever) in the year, if the corporation (or one of its shareholders) does not deal at arm’s length with the particular partnership or with a person that holds a direct or indirect interest in the particular partnership, and if it may not be considered that all or substantially all of the partnership’s income for the year from an eligible business is from the provision of services or property to persons that deal at arm’s length with the partnership or with any person that holds a direct or indirect interest in the partnership or to other partnerships (other than the particular partnership) with which the partnership deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest; and

(b)  the lesser of

i.  the aggregate of the amounts determined in respect of the corporation for the year under subparagraphs i and ii of paragraph a of section 771.2.1.2, and

ii.  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member or a designated member in the year, equal to the amount by which the amount determined in respect of the partnership for the year under subparagraph i of paragraph a exceeds the amount determined in respect of the partnership for the year under subparagraph ii of that paragraph a, according to whether the corporation is a member or a designated member of the partnership;

“specified partnership loss” of a corporation for a taxation year means the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year that would be a primary and manufacturing sectors corporation for the year if the partnership were a corporation for its last fiscal period that ends in the year, if that fiscal period were its taxation year and if its proportion of primary and manufacturing sectors activities for the year were determined without reference to the activities of any other partnership of which it is a member, or that is a partnership described in section 771.2.1.2.2 for the year, equal to the aggregate of

(a)  the aggregate of all amounts each of which is the corporation’s share of the loss, determined in accordance with Title XI of Book III, of the partnership for a fiscal period that ends in the year from an eligible business carried on in Canada by the corporation as a member of the partnership; and

(b)  the aggregate of all amounts each of which is the amount by which the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from an eligible business carried on in Canada by the corporation as a member of the partnership, other than an amount that was deducted by the partnership in computing its income from the business, exceeds the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period that ends in the year;

“tax-free period” of a corporation means the period beginning at the time of its incorporation and ending

(a)  on the last day of the ten-year period beginning at that time; or

(b)  if it is earlier than the day referred to in paragraph a, on the last day of the taxation year that precedes the taxation year in which the corporation ceases to be a corporation dedicated to the commercialization of intellectual property.

For the purposes of the definition of “information technology development centre” in the first paragraph, premises designated by Investissement Québec are deemed to be part of a building referred to in that definition.

For the purposes of the definition of “new economy centre” in the first paragraph, premises designated by Investissement Québec are deemed to form part of a building referred to in that definition.

Despite the definition of “eligibility period” in the first paragraph, the eligibility period of a corporation does not include any day in a taxation year for which the corporation is authorized by Investissement Québec to carry on its business outside the information technology development centre, the new economy centre or the biotechnology development centre that is mentioned in the certificate referred to in paragraph a of section 771.12, if, during that day, none of the activities of its business are carried on in Québec.

In the formula in the definition of “specified partnership business limit” in the first paragraph,

(a)  A is the aggregate of all amounts each of which is the person’s share of the income (determined in accordance with Title XI of Book III) of a partnership of which the person is a member from an eligible business carried on in Canada for a fiscal period ending in the year;

(b)  B is the aggregate of all amounts each of which is the partnership’s income from an eligible business carried on in Canada for a fiscal period referred to in subparagraph i of paragraph a of the definition of “specified partnership income” in the first paragraph;

(c)  C is the lesser of the business limit specified in the first paragraph of section 771.2.1.3 for a corporation that is not associated in a taxation year with one or more other Canadian-controlled private corporations and the proportion of that business limit that the number of days in a fiscal period of the partnership that ends in the year is of 365; and

(d)  D is the aggregate of all amounts each of which is an amount that the person assigns in accordance with section 771.2.1.4.3.

For the purposes of the definition of “oil refining corporation” in the first paragraph, the following rules apply for the purpose of determining whether a corporation is associated with a partnership or a trust at any time:

(a)  a partnership is deemed to be a corporation the taxation year of which corresponds to its fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(b)  a trust is deemed to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this subparagraph b referred to as the “distribution date”), and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  if any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  if subparagraph 1 does not apply and if that time occurs before the distribution date, are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom a property of the trust or a property for which it was substituted was directly or indirectly received.

1981, c. 12, s. 9; 1987, c. 21, s. 28; 1989, c. 5, s. 118; 1992, c. 1, s. 66; 1995, c. 63, s. 68; 1997, c. 3, s. 71; 1997, c. 85, s. 153; 1998, c. 17, s. 64; 1999, c. 83, s. 102; 2000, c. 39, s. 76; 2001, c. 51, s. 72; 2001, c. 69, s. 12; 2002, c. 9, s. 20; 2003, c. 9, s. 98; 2004, c. 21, s. 201; 2005, c. 23, s. 103; 2005, c. 38, s. 172; 2007, c. 12, s. 86; 2009, c. 5, s. 312; 2009, c. 15, s. 150; 2010, c. 5, s. 67; 2010, c. 25, s. 77; 2015, c. 21, s. 312; 2015, c. 24, s. 109; 2017, c. 1, s. 212; 2017, c. 29, s. 155; 2019, c. 14, s. 240; 2019, c. 29, s. 1; 2020, c. 16, s. 115.

2019-12-11

771.1. In this Title,

“biotechnology development centre” means a building designated as such by Investissement Québec;

“corporation dedicated to the commercialization of intellectual property” has the meaning assigned by sections 771.14 and 771.15;

“designated member”, of a particular partnership in a taxation year, means a Canadian-controlled private corporation that provides (directly or indirectly, in any manner whatever) services or property to the particular partnership at any time in the corporation’s taxation year if

(a)  the corporation is not, at any time in the taxation year, a member of the particular partnership; and

(b)  at any time in the taxation year,

i.  one of the corporation’s shareholders holds a direct or indirect interest in the particular partnership, or

ii.  if subparagraph i does not apply, the corporation does not deal at arm’s length with a person that holds a direct or indirect interest in the particular partnership, and it may not be considered that all or substantially all of the corporation’s income from an eligible business for the year is from the provision of services or property to persons with which the corporation deals at arm’s length or to partnerships (other than the particular partnership) with which the corporation deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest;

“eligibility date” of a corporation means

(a)  where the corporation carries on or may carry on its business in an information technology development centre, 26 March 1997;

(b)  where the corporation carries on or may carry on its business in a new economy centre, 10 March 1999; and

(c)  where the corporation carries on or may carry on its business in a biotechnology development centre, 30 March 2001;

“eligibility period” of a corporation means the five-year period that begins on the day of coming into force of the certificate referred to in paragraph a of section 771.12 that was issued in its respect or, if it is later, on the corporation’s eligibility date, unless the corporation ceases to be an exempt corporation,

(a)  at the beginning of a particular taxation year following an acquisition of control referred to in subparagraph f of the first paragraph of section 771.13 that occurred in the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends immediately before the acquisition of control;

(b)  at the beginning of a particular taxation year following an election by the corporation under subparagraph g of the first paragraph of section 771.13 to become a specified corporation from a particular day of the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends the day before that particular day; or

(c)  in a particular taxation year, other than the one referred to in paragraph a or b, and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends on the last day of the taxation year preceding the particular year;

“eligible business”, in relation to any business carried on by a corporation, means any business carried on by a corporation other than a specified investment business or a personal services business and includes, except for the purposes of subparagraph a of the second paragraph of section 771.6, subparagraph d of the first paragraph of section 771.8.3 and subparagraph i of subparagraph c of the second paragraph of section 771.8.5, an adventure or concern in the nature of trade;

“eligible commercialization business” of a corporation, at any time, means an eligible business in respect of which the corporation holds a qualification certificate that was issued by the Minister of Economy and Innovation and that is valid at that time;

“eligible institute” means an eligible public research centre or an eligible university entity, within the meaning of paragraphs a.1 and f of section 1029.8.1;

“exempt corporation” has the meaning assigned by sections 771.12 and 771.13;

“exemption period” of a corporation means the period that begins at the beginning of the corporation’s first taxation year and ends on the earlier of

(a)  the last day of the five-year period that begins at the beginning of the corporation’s first taxation year, and

(b)  the last day of the taxation year preceding the taxation year in which the corporation ceases to be a qualified corporation;

“financial institution” means a corporation referred to in paragraph a of section 1132;

“information technology development centre” means a building designated as such by the Minister of Finance;

“manufacturing corporation” for a taxation year that begins before 1 January 2017 means a corporation whose proportion of manufacturing or processing activities for the taxation year is greater than 25%;

“new economy centre” means one or more buildings within the same region that are designated by Investissement Québec as constituting a marketplace for the new economy;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 31 May 2007, 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;

“primary and manufacturing sectors corporation” for a taxation year that begins after 31 December 2016 means a corporation whose proportion of primary and manufacturing sectors activities for the taxation year is greater than 25%;

“proportion of primary and manufacturing sectors activities” of a corporation for a taxation year means the prescribed proportion;

“proportion of the manufacturing or processing activities” of a corporation for a taxation year means the proportion that the amount determined in respect of the corporation for the year under paragraph a of section 5200 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) is of the amount determined in respect of the corporation for the year under paragraph b of section 5200 of those Regulations;

“qualified corporation” has the meaning assigned by sections 771.5 to 771.7;

“specified corporation” has the meaning assigned by section 1029.8.36.0.17;

“specified corporate income”, of a corporation for a taxation year, means the lesser of the amount that the Minister determines to be reasonable in the circumstances and the lesser of

(a)  the aggregate of all amounts each of which is the corporation’s income from an eligible business for the year from the provision of services or property to a private corporation (directly or indirectly, in any manner whatever) if

i.  at any time in the year, the corporation (or one of its shareholders) or a person who does not deal at arm’s length with the corporation (or one of its shareholders) holds a direct or indirect interest in the private corporation, and

ii.  it may not be considered that all or substantially all of the corporation’s income for the year from an eligible business is from the provision of services or property to persons (other than the private corporation) with which the corporation deals at arm’s length or to partnerships with which the corporation deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest; and

(b)  the aggregate of all amounts each of which is the portion of the business limit of a private corporation described in paragraph a for a taxation year that the private corporation assigns to the corporation in accordance with section 771.2.1.4.2;

“specified investment business” carried on by a corporation in a taxation year means a business, other than a business carried on by a savings and credit union or a business of leasing property other than immovable property, the principal purpose of which is to derive income from property, including interest, dividends, rents or royalties, unless the corporation employs in the business throughout the year more than five full-time employees, or in the course of carrying on an eligible business, any other corporation associated with it provides financial, administrative, maintenance, managerial or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than five full-time employees if those services had not been provided;

“specified partnership business limit”, of a person for a taxation year, at a particular time, means the amount determined by the formula

(A/B) × C – D;

“specified partnership income” of a corporation for a taxation year means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member or a designated member in the year that would be a primary and manufacturing sectors corporation for the year if the partnership were a corporation for its last fiscal period that ends in the year, if that fiscal period were its taxation year and if its proportion of primary and manufacturing sectors activities for the year were determined without reference to the activities of any other partnership of which it is a member, or that is a partnership described in section 771.2.1.2.2 for the year, equal to the least of

i.  the aggregate of all amounts each of which is an amount, in respect of an eligible business carried on in Canada by the corporation as a member, or a designated member, of the partnership, equal to the amount by which the aggregate of all amounts each of which is the corporation’s share of the income (determined in accordance with Title XI of Book III) of the partnership from the business for a fiscal period of the business that ends in the year, an amount of the corporation’s particular income for the year from the provision (directly or indirectly, in any manner whatever) of services or property to the partnership, or an amount included in computing the corporation’s income for the year under any of sections 217.19, 217.20 and 217.28 in respect of the business exceeds the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from the business (other than an amount that was deducted by the partnership in computing its income from the business or in computing the corporation’s particular income) or an amount deducted in that computation for the year in respect of the business under section 217.21 or 217.27,

ii.  where the corporation is a member of the partnership, the corporation’s specified partnership business limit for the year and, where the corporation is a designated member of the partnership, the aggregate of all amounts assigned to it in accordance with section 771.2.1.4.3 for the year or, if no such amounts have been assigned, nil, and

iii.  nil, where the corporation is (directly or indirectly, through one or more other partnerships) a member, or a designated member, of the partnership in the year and the partnership provides services or property to either

(1)  a private corporation (directly or indirectly, in any manner whatever) in the year, if the corporation (or one of its shareholders) or a person who does not deal at arm’s length with the corporation (or one of its shareholders) holds a direct or indirect interest in the private corporation, and if it may not be considered that all or substantially all of the partnership’s income for the year from an eligible business is from the provision of services or property to persons (other than the private corporation) that deal at arm’s length with the partnership or with any person that holds a direct or indirect interest in the partnership or to other partnerships with which the partnership deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest, or

(2)  a particular partnership (directly or indirectly, in any manner whatever) in the year, if the corporation (or one of its shareholders) does not deal at arm’s length with the particular partnership or with a person that holds a direct or indirect interest in the particular partnership, and if it may not be considered that all or substantially all of the partnership’s income for the year from an eligible business is from the provision of services or property to persons that deal at arm’s length with the partnership or with any person that holds a direct or indirect interest in the partnership or to other partnerships (other than the particular partnership) with which the partnership deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest; and

(b)  the lesser of

i.  the aggregate of the amounts determined in respect of the corporation for the year under subparagraphs i and ii of paragraph a of section 771.2.1.2, and

ii.  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member or a designated member in the year, equal to the amount by which the amount determined in respect of the partnership for the year under subparagraph i of paragraph a exceeds the amount determined in respect of the partnership for the year under subparagraph ii of that paragraph a, according to whether the corporation is a member or a designated member of the partnership;

“specified partnership loss” of a corporation for a taxation year means the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year that would be a primary and manufacturing sectors corporation for the year if the partnership were a corporation for its last fiscal period that ends in the year, if that fiscal period were its taxation year and if its proportion of primary and manufacturing sectors activities for the year were determined without reference to the activities of any other partnership of which it is a member, or that is a partnership described in section 771.2.1.2.2 for the year, equal to the aggregate of

(a)  the aggregate of all amounts each of which is the corporation’s share of the loss, determined in accordance with Title XI of Book III, of the partnership for a fiscal period that ends in the year from an eligible business carried on in Canada by the corporation as a member of the partnership; and

(b)  the aggregate of all amounts each of which is the amount by which the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from an eligible business carried on in Canada by the corporation as a member of the partnership, other than an amount that was deducted by the partnership in computing its income from the business, exceeds the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period that ends in the year;

“tax-free period” of a corporation means the period beginning at the time of its incorporation and ending

(a)  on the last day of the ten-year period beginning at that time; or

(b)  if it is earlier than the day referred to in paragraph a, on the last day of the taxation year that precedes the taxation year in which the corporation ceases to be a corporation dedicated to the commercialization of intellectual property.

For the purposes of the definition of “information technology development centre” in the first paragraph, premises designated by Investissement Québec are deemed to be part of a building referred to in that definition.

For the purposes of the definition of “new economy centre” in the first paragraph, premises designated by Investissement Québec are deemed to form part of a building referred to in that definition.

Despite the definition of “eligibility period” in the first paragraph, the eligibility period of a corporation does not include any day in a taxation year for which the corporation is authorized by Investissement Québec to carry on its business outside the information technology development centre, the new economy centre or the biotechnology development centre that is mentioned in the certificate referred to in paragraph a of section 771.12, if, during that day, none of the activities of its business are carried on in Québec.

In the formula in the definition of “specified partnership business limit” in the first paragraph,

(a)  A is the aggregate of all amounts each of which is the person’s share of the income (determined in accordance with Title XI of Book III) of a partnership of which the person is a member from an eligible business carried on in Canada for a fiscal period ending in the year;

(b)  B is the aggregate of all amounts each of which is the partnership’s income from an eligible business carried on in Canada for a fiscal period referred to in subparagraph i of paragraph a of the definition of “specified partnership income” in the first paragraph;

(c)  C is the lesser of the business limit specified in the first paragraph of section 771.2.1.3 for a corporation that is not associated in a taxation year with one or more other Canadian-controlled private corporations and the proportion of that business limit that the number of days in a fiscal period of the partnership that ends in the year is of 365; and

(d)  D is the aggregate of all amounts each of which is an amount that the person assigns in accordance with section 771.2.1.4.3.

For the purposes of the definition of “oil refining corporation” in the first paragraph, the following rules apply for the purpose of determining whether a corporation is associated with a partnership or a trust at any time:

(a)  a partnership is deemed to be a corporation the taxation year of which corresponds to its fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(b)  a trust is deemed to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this subparagraph b referred to as the “distribution date”), and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  if any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  if subparagraph 1 does not apply and if that time occurs before the distribution date, are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom a property of the trust or a property for which it was substituted was directly or indirectly received.

1981, c. 12, s. 9; 1987, c. 21, s. 28; 1989, c. 5, s. 118; 1992, c. 1, s. 66; 1995, c. 63, s. 68; 1997, c. 3, s. 71; 1997, c. 85, s. 153; 1998, c. 17, s. 64; 1999, c. 83, s. 102; 2000, c. 39, s. 76; 2001, c. 51, s. 72; 2001, c. 69, s. 12; 2002, c. 9, s. 20; 2003, c. 9, s. 98; 2004, c. 21, s. 201; 2005, c. 23, s. 103; 2005, c. 38, s. 172; 2007, c. 12, s. 86; 2009, c. 5, s. 312; 2009, c. 15, s. 150; 2010, c. 5, s. 67; 2010, c. 25, s. 77; 2015, c. 21, s. 312; 2015, c. 24, s. 109; 2017, c. 1, s. 212; 2017, c. 29, s. 155; 2019, c. 14, s. 240; 2019, c. 29, s. 1.

2019-06-19

771.1. In this Title,

“biotechnology development centre” means a building designated as such by Investissement Québec;

“corporation dedicated to the commercialization of intellectual property” has the meaning assigned by sections 771.14 and 771.15;

“designated member”, of a particular partnership in a taxation year, means a Canadian-controlled private corporation that provides (directly or indirectly, in any manner whatever) services or property to the particular partnership at any time in the corporation’s taxation year if

(a)  the corporation is not, at any time in the taxation year, a member of the particular partnership; and

(b)  at any time in the taxation year,

i.  one of the corporation’s shareholders holds a direct or indirect interest in the particular partnership, or

ii.  if subparagraph i does not apply, the corporation does not deal at arm’s length with a person that holds a direct or indirect interest in the particular partnership, and it may not be considered that all or substantially all of the corporation’s income from an eligible business for the year is from the provision of services or property to persons with which the corporation deals at arm’s length or to partnerships (other than the particular partnership) with which the corporation deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest;

“eligibility date” of a corporation means

(a)  where the corporation carries on or may carry on its business in an information technology development centre, 26 March 1997;

(b)  where the corporation carries on or may carry on its business in a new economy centre, 10 March 1999; and

(c)  where the corporation carries on or may carry on its business in a biotechnology development centre, 30 March 2001;

“eligibility period” of a corporation means the five-year period that begins on the day of coming into force of the certificate referred to in paragraph a of section 771.12 that was issued in its respect or, if it is later, on the corporation’s eligibility date, unless the corporation ceases to be an exempt corporation,

(a)  at the beginning of a particular taxation year following an acquisition of control referred to in subparagraph f of the first paragraph of section 771.13 that occurred in the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends immediately before the acquisition of control;

(b)  at the beginning of a particular taxation year following an election by the corporation under subparagraph g of the first paragraph of section 771.13 to become a specified corporation from a particular day of the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends the day before that particular day; or

(c)  in a particular taxation year, other than the one referred to in paragraph a or b, and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends on the last day of the taxation year preceding the particular year;

“eligible business”, in relation to any business carried on by a corporation, means any business carried on by a corporation other than a specified investment business or a personal services business and includes, except for the purposes of subparagraph a of the second paragraph of section 771.6, subparagraph d of the first paragraph of section 771.8.3 and subparagraph i of subparagraph c of the second paragraph of section 771.8.5, an adventure or concern in the nature of trade;

“eligible commercialization business” of a corporation, at any time, means an eligible business in respect of which the corporation holds a qualification certificate that was issued by the Minister of Economic Development, Innovation and Export Trade and that is valid at that time;

“eligible institute” means an eligible public research centre or an eligible university entity, within the meaning of paragraphs a.1 and f of section 1029.8.1;

“exempt corporation” has the meaning assigned by sections 771.12 and 771.13;

“exemption period” of a corporation means the period that begins at the beginning of the corporation’s first taxation year and ends on the earlier of

(a)  the last day of the five-year period that begins at the beginning of the corporation’s first taxation year, and

(b)  the last day of the taxation year preceding the taxation year in which the corporation ceases to be a qualified corporation;

“financial institution” means a corporation referred to in paragraph a of section 1132;

“information technology development centre” means a building designated as such by the Minister of Finance;

“manufacturing corporation” for a taxation year that begins before 1 January 2017 means a corporation whose proportion of manufacturing or processing activities for the taxation year is greater than 25%;

“new economy centre” means one or more buildings within the same region that are designated by Investissement Québec as constituting a marketplace for the new economy;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 31 May 2007, 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;

“primary and manufacturing sectors corporation” for a taxation year that begins after 31 December 2016 means a corporation whose proportion of primary and manufacturing sectors activities for the taxation year is greater than 25%;

“proportion of primary and manufacturing sectors activities” of a corporation for a taxation year means the prescribed proportion;

“proportion of the manufacturing or processing activities” of a corporation for a taxation year means the proportion that the amount determined in respect of the corporation for the year under paragraph a of section 5200 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) is of the amount determined in respect of the corporation for the year under paragraph b of section 5200 of those Regulations;

“qualified corporation” has the meaning assigned by sections 771.5 to 771.7;

“specified corporation” has the meaning assigned by section 1029.8.36.0.17;

“specified corporate income”, of a corporation for a taxation year, means the lesser of the amount that the Minister determines to be reasonable in the circumstances and the lesser of

(a)  the aggregate of all amounts each of which is the corporation’s income from an eligible business for the year from the provision of services or property to a private corporation (directly or indirectly, in any manner whatever) if

i.  at any time in the year, the corporation (or one of its shareholders) or a person who does not deal at arm’s length with the corporation (or one of its shareholders) holds a direct or indirect interest in the private corporation, and

ii.  it may not be considered that all or substantially all of the corporation’s income for the year from an eligible business is from the provision of services or property to persons (other than the private corporation) with which the corporation deals at arm’s length or to partnerships with which the corporation deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest; and

(b)  the aggregate of all amounts each of which is the portion of the business limit of a private corporation described in paragraph a for a taxation year that the private corporation assigns to the corporation in accordance with section 771.2.1.4.2;

“specified investment business” carried on by a corporation in a taxation year means a business, other than a business carried on by a savings and credit union or a business of leasing property other than immovable property, the principal purpose of which is to derive income from property, including interest, dividends, rents or royalties, unless the corporation employs in the business throughout the year more than five full-time employees, or in the course of carrying on an eligible business, any other corporation associated with it provides financial, administrative, maintenance, managerial or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than five full-time employees if those services had not been provided;

“specified partnership business limit”, of a person for a taxation year, at a particular time, means the amount determined by the formula

(A/B) × C – D;

“specified partnership income” of a corporation for a taxation year means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member or a designated member in the year that would be a primary and manufacturing sectors corporation for the year if the partnership were a corporation for its last fiscal period that ends in the year, if that fiscal period were its taxation year and if its proportion of primary and manufacturing sectors activities for the year were determined without reference to the activities of any other partnership of which it is a member, or that is a partnership described in section 771.2.1.2.2 for the year, equal to the least of

i.  the aggregate of all amounts each of which is an amount, in respect of an eligible business carried on in Canada by the corporation as a member, or a designated member, of the partnership, equal to the amount by which the aggregate of all amounts each of which is the corporation’s share of the income (determined in accordance with Title XI of Book III) of the partnership from the business for a fiscal period of the business that ends in the year, an amount of the corporation’s particular income for the year from the provision (directly or indirectly, in any manner whatever) of services or property to the partnership, or an amount included in computing the corporation’s income for the year under any of sections 217.19, 217.20 and 217.28 in respect of the business exceeds the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from the business (other than an amount that was deducted by the partnership in computing its income from the business or in computing the corporation’s particular income) or an amount deducted in that computation for the year in respect of the business under section 217.21 or 217.27,

ii.  where the corporation is a member of the partnership, the corporation’s specified partnership business limit for the year and, where the corporation is a designated member of the partnership, the aggregate of all amounts assigned to it in accordance with section 771.2.1.4.3 for the year or, if no such amounts have been assigned, nil, and

iii.  nil, where the corporation is (directly or indirectly, through one or more other partnerships) a member, or a designated member, of the partnership in the year and the partnership provides services or property to either

(1)  a private corporation (directly or indirectly, in any manner whatever) in the year, if the corporation (or one of its shareholders) or a person who does not deal at arm’s length with the corporation (or one of its shareholders) holds a direct or indirect interest in the private corporation, and if it may not be considered that all or substantially all of the partnership’s income for the year from an eligible business is from the provision of services or property to persons (other than the private corporation) that deal at arm’s length with the partnership or with any person that holds a direct or indirect interest in the partnership or to other partnerships with which the partnership deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest, or

(2)  a particular partnership (directly or indirectly, in any manner whatever) in the year, if the corporation (or one of its shareholders) does not deal at arm’s length with the particular partnership or with a person that holds a direct or indirect interest in the particular partnership, and if it may not be considered that all or substantially all of the partnership’s income for the year from an eligible business is from the provision of services or property to persons that deal at arm’s length with the partnership or with any person that holds a direct or indirect interest in the partnership or to other partnerships (other than the particular partnership) with which the partnership deals at arm’s length, other than a partnership in which a person that does not deal at arm’s length with the corporation holds a direct or indirect interest; and

(b)  the lesser of

i.  the aggregate of the amounts determined in respect of the corporation for the year under subparagraphs i and ii of paragraph a of section 771.2.1.2, and

ii.  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member or a designated member in the year, equal to the amount by which the amount determined in respect of the partnership for the year under subparagraph i of paragraph a exceeds the amount determined in respect of the partnership for the year under subparagraph ii of that paragraph a, according to whether the corporation is a member or a designated member of the partnership;

“specified partnership loss” of a corporation for a taxation year means the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year that would be a primary and manufacturing sectors corporation for the year if the partnership were a corporation for its last fiscal period that ends in the year, if that fiscal period were its taxation year and if its proportion of primary and manufacturing sectors activities for the year were determined without reference to the activities of any other partnership of which it is a member, or that is a partnership described in section 771.2.1.2.2 for the year, equal to the aggregate of

(a)  the aggregate of all amounts each of which is the corporation’s share of the loss, determined in accordance with Title XI of Book III, of the partnership for a fiscal period that ends in the year from an eligible business carried on in Canada by the corporation as a member of the partnership; and

(b)  the aggregate of all amounts each of which is the amount by which the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from an eligible business carried on in Canada by the corporation as a member of the partnership, other than an amount that was deducted by the partnership in computing its income from the business, exceeds the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period that ends in the year;

“tax-free period” of a corporation means the period beginning at the time of its incorporation and ending

(a)  on the last day of the ten-year period beginning at that time; or

(b)  if it is earlier than the day referred to in paragraph a, on the last day of the taxation year that precedes the taxation year in which the corporation ceases to be a corporation dedicated to the commercialization of intellectual property.

For the purposes of the definition of “information technology development centre” in the first paragraph, premises designated by Investissement Québec are deemed to be part of a building referred to in that definition.

For the purposes of the definition of “new economy centre” in the first paragraph, premises designated by Investissement Québec are deemed to form part of a building referred to in that definition.

Despite the definition of “eligibility period” in the first paragraph, the eligibility period of a corporation does not include any day in a taxation year for which the corporation is authorized by Investissement Québec to carry on its business outside the information technology development centre, the new economy centre or the biotechnology development centre that is mentioned in the certificate referred to in paragraph a of section 771.12, if, during that day, none of the activities of its business are carried on in Québec.

In the formula in the definition of “specified partnership business limit” in the first paragraph,

(a)  A is the aggregate of all amounts each of which is the person’s share of the income (determined in accordance with Title XI of Book III) of a partnership of which the person is a member from an eligible business carried on in Canada for a fiscal period ending in the year;

(b)  B is the aggregate of all amounts each of which is the partnership’s income from an eligible business carried on in Canada for a fiscal period referred to in subparagraph i of paragraph a of the definition of “specified partnership income” in the first paragraph;

(c)  C is the lesser of the business limit specified in the first paragraph of section 771.2.1.3 for a corporation that is not associated in a taxation year with one or more other Canadian-controlled private corporations and the proportion of that business limit that the number of days in a fiscal period of the partnership that ends in the year is of 365; and

(d)  D is the aggregate of all amounts each of which is an amount that the person assigns in accordance with section 771.2.1.4.3.

For the purposes of the definition of “oil refining corporation” in the first paragraph, the following rules apply for the purpose of determining whether a corporation is associated with a partnership or a trust at any time:

(a)  a partnership is deemed to be a corporation the taxation year of which corresponds to its fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(b)  a trust is deemed to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this subparagraph b referred to as the “distribution date”), and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  if any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  if subparagraph 1 does not apply and if that time occurs before the distribution date, are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom a property of the trust or a property for which it was substituted was directly or indirectly received.

1981, c. 12, s. 9; 1987, c. 21, s. 28; 1989, c. 5, s. 118; 1992, c. 1, s. 66; 1995, c. 63, s. 68; 1997, c. 3, s. 71; 1997, c. 85, s. 153; 1998, c. 17, s. 64; 1999, c. 83, s. 102; 2000, c. 39, s. 76; 2001, c. 51, s. 72; 2001, c. 69, s. 12; 2002, c. 9, s. 20; 2003, c. 9, s. 98; 2004, c. 21, s. 201; 2005, c. 23, s. 103; 2005, c. 38, s. 172; 2007, c. 12, s. 86; 2009, c. 5, s. 312; 2009, c. 15, s. 150; 2010, c. 5, s. 67; 2010, c. 25, s. 77; 2015, c. 21, s. 312; 2015, c. 24, s. 109; 2017, c. 1, s. 212; 2017, c. 29, s. 155; 2019, c. 14, s. 240.

2017-12-07

771.1. In this Title,

“biotechnology development centre” means a building designated as such by Investissement Québec;

“corporation dedicated to the commercialization of intellectual property” has the meaning assigned by sections 771.14 and 771.15;

“eligibility date” of a corporation means

(a)  where the corporation carries on or may carry on its business in an information technology development centre, 26 March 1997;

(b)  where the corporation carries on or may carry on its business in a new economy centre, 10 March 1999; and

(c)  where the corporation carries on or may carry on its business in a biotechnology development centre, 30 March 2001;

“eligibility period” of a corporation means the five-year period that begins on the day of coming into force of the certificate referred to in paragraph a of section 771.12 that was issued in its respect or, if it is later, on the corporation’s eligibility date, unless the corporation ceases to be an exempt corporation,

(a)  at the beginning of a particular taxation year following an acquisition of control referred to in subparagraph f of the first paragraph of section 771.13 that occurred in the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends immediately before the acquisition of control;

(b)  at the beginning of a particular taxation year following an election by the corporation under subparagraph g of the first paragraph of section 771.13 to become a specified corporation from a particular day of the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends the day before that particular day; or

(c)  in a particular taxation year, other than the one referred to in paragraph a or b, and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends on the last day of the taxation year preceding the particular year;

“eligible business”, in relation to any business carried on by a corporation, means any business carried on by a corporation other than a specified investment business or a personal services business and includes, except for the purposes of subparagraph a of the second paragraph of section 771.6, subparagraph d of the first paragraph of section 771.8.3 and subparagraph i of subparagraph c of the second paragraph of section 771.8.5, an adventure or concern in the nature of trade;

“eligible commercialization business” of a corporation, at any time, means an eligible business in respect of which the corporation holds a qualification certificate that was issued by the Minister of Economic Development, Innovation and Export Trade and that is valid at that time;

“eligible institute” means an eligible public research centre or an eligible university entity, within the meaning of paragraphs a.1 and f of section 1029.8.1;

“exempt corporation” has the meaning assigned by sections 771.12 and 771.13;

“exemption period” of a corporation means the period that begins at the beginning of the corporation’s first taxation year and ends on the earlier of

(a)  the last day of the five-year period that begins at the beginning of the corporation’s first taxation year, and

(b)  the last day of the taxation year preceding the taxation year in which the corporation ceases to be a qualified corporation;

“financial institution” means a corporation referred to in paragraph a of section 1132;

“information technology development centre” means a building designated as such by the Minister of Finance;

“manufacturing corporation” for a taxation year that begins before 1 January 2017 means a corporation whose proportion of manufacturing or processing activities for the taxation year is greater than 25%;

“new economy centre” means one or more buildings within the same region that are designated by Investissement Québec as constituting a marketplace for the new economy;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 31 May 2007, 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;

“primary and manufacturing sectors corporation” for a taxation year that begins after 31 December 2016 means a corporation whose proportion of primary and manufacturing sectors activities for the taxation year is greater than 25%;

“proportion of primary and manufacturing sectors activities” of a corporation for a taxation year means the prescribed proportion;

“proportion of the manufacturing or processing activities” of a corporation for a taxation year means the proportion that the amount determined in respect of the corporation for the year under paragraph a of section 5200 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) is of the amount determined in respect of the corporation for the year under paragraph b of section 5200 of those Regulations;

“qualified corporation” has the meaning assigned by sections 771.5 to 771.7;

“specified corporation” has the meaning assigned by section 1029.8.36.0.17;

“specified investment business” carried on by a corporation in a taxation year means a business, other than a business carried on by a savings and credit union or a business of leasing property other than immovable property, the principal purpose of which is to derive income from property, including interest, dividends, rents or royalties, unless the corporation employs in the business throughout the year more than five full-time employees, or in the course of carrying on an eligible business, any other corporation associated with it provides financial, administrative, maintenance, managerial or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than five full-time employees if those services had not been provided;

“specified partnership income” of a corporation for a taxation year means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year that would be a primary and manufacturing sectors corporation for the year if the partnership were a corporation for its last fiscal period that ends in the year, if that fiscal period were its taxation year and if its proportion of primary and manufacturing sectors activities for the year were determined without reference to the activities of any other partnership of which it is a member, or that is a partnership described in section 771.2.1.2.2 for the year, equal to the lesser of

i.  the aggregate of all amounts each of which is an amount, in respect of an eligible business carried on in Canada by the corporation as a member of the partnership, equal to the amount by which the aggregate of all amounts each of which is the corporation’s share of the income (determined in accordance with Title XI of Book III) of the partnership from the business for a fiscal period of the business that ends in the year, or an amount included in computing the corporation’s income for the year under any of sections 217.19, 217.20 and 217.28 in respect of the business exceeds the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from the business (other than an amount that was deducted by the partnership in computing its income from the business) or in respect of the business under section 217.21 or 217.27, and

ii.  the proportion of the lesser of $500,000 and the product obtained by multiplying $1,370 by the number of days included in a fiscal period of the partnership that ends in the year that the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from an eligible business carried on in Canada for a fiscal period that ends in the year is of the aggregate of all amounts each of which is the partnership’s income for a fiscal period referred to in subparagraph i from an eligible business carried on in Canada; and

(b)  the lesser of

i.  the aggregate of the amounts determined in respect of the corporation for the year under subparagraphs i and ii of paragraph a of section 771.2.1.2, and

ii.  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the amount by which the amount determined in respect of the partnership for the year under subparagraph i of paragraph a exceeds the amount determined in respect of the partnership for the year under subparagraph ii of that paragraph;

“specified partnership loss” of a corporation for a taxation year means the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year that would be a primary and manufacturing sectors corporation for the year if the partnership were a corporation for its last fiscal period that ends in the year, if that fiscal period were its taxation year and if its proportion of primary and manufacturing sectors activities for the year were determined without reference to the activities of any other partnership of which it is a member, or that is a partnership described in section 771.2.1.2.2 for the year, equal to the aggregate of

(a)  the aggregate of all amounts each of which is the corporation’s share of the loss, determined in accordance with Title XI of Book III, of the partnership for a fiscal period that ends in the year from an eligible business carried on in Canada by the corporation as a member of the partnership; and

(b)  the aggregate of all amounts each of which is the amount by which the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from an eligible business carried on in Canada by the corporation as a member of the partnership, other than an amount that was deducted by the partnership in computing its income from the business, exceeds the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period that ends in the year;

“tax-free period” of a corporation means the period beginning at the time of its incorporation and ending

(a)  on the last day of the ten-year period beginning at that time; or

(b)  if it is earlier than the day referred to in paragraph a, on the last day of the taxation year that precedes the taxation year in which the corporation ceases to be a corporation dedicated to the commercialization of intellectual property.

For the purposes of the definition of “information technology development centre” in the first paragraph, premises designated by Investissement Québec are deemed to be part of a building referred to in that definition.

For the purposes of the definition of “new economy centre” in the first paragraph, premises designated by Investissement Québec are deemed to form part of a building referred to in that definition.

Despite the definition of “eligibility period” in the first paragraph, the eligibility period of a corporation does not include any day in a taxation year for which the corporation is authorized by Investissement Québec to carry on its business outside the information technology development centre, the new economy centre or the biotechnology development centre that is mentioned in the certificate referred to in paragraph a of section 771.12, if, during that day, none of the activities of its business are carried on in Québec.

For the purposes of the definition of “oil refining corporation” in the first paragraph, the following rules apply for the purpose of determining whether a corporation is associated with a partnership or a trust at any time:

(a)  a partnership is deemed to be a corporation the taxation year of which corresponds to its fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(b)  a trust is deemed to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this subparagraph b referred to as the “distribution date”), and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  if any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  if subparagraph 1 does not apply and if that time occurs before the distribution date, are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom a property of the trust or a property for which it was substituted was directly or indirectly received.

1981, c. 12, s. 9; 1987, c. 21, s. 28; 1989, c. 5, s. 118; 1992, c. 1, s. 66; 1995, c. 63, s. 68; 1997, c. 3, s. 71; 1997, c. 85, s. 153; 1998, c. 17, s. 64; 1999, c. 83, s. 102; 2000, c. 39, s. 76; 2001, c. 51, s. 72; 2001, c. 69, s. 12; 2002, c. 9, s. 20; 2003, c. 9, s. 98; 2004, c. 21, s. 201; 2005, c. 23, s. 103; 2005, c. 38, s. 172; 2007, c. 12, s. 86; 2009, c. 5, s. 312; 2009, c. 15, s. 150; 2010, c. 5, s. 67; 2010, c. 25, s. 77; 2015, c. 21, s. 312; 2015, c. 24, s. 109; 2017, c. 1, s. 212; 2017, c. 29, s. 155.

2017-02-08

771.1. In this Title,

“biotechnology development centre” means a building designated as such by Investissement Québec;

“corporation dedicated to the commercialization of intellectual property” has the meaning assigned by sections 771.14 and 771.15;

“eligibility date” of a corporation means

(a)  where the corporation carries on or may carry on its business in an information technology development centre, 26 March 1997;

(b)  where the corporation carries on or may carry on its business in a new economy centre, 10 March 1999; and

(c)  where the corporation carries on or may carry on its business in a biotechnology development centre, 30 March 2001;

“eligibility period” of a corporation means the five-year period that begins on the day of coming into force of the certificate referred to in paragraph a of section 771.12 that was issued in its respect or, if it is later, on the corporation’s eligibility date, unless the corporation ceases to be an exempt corporation,

(a)  at the beginning of a particular taxation year following an acquisition of control referred to in subparagraph f of the first paragraph of section 771.13 that occurred in the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends immediately before the acquisition of control;

(b)  at the beginning of a particular taxation year following an election by the corporation under subparagraph g of the first paragraph of section 771.13 to become a specified corporation from a particular day of the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends the day before that particular day; or

(c)  in a particular taxation year, other than the one referred to in paragraph a or b, and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends on the last day of the taxation year preceding the particular year;

“eligible business”, in relation to any business carried on by a corporation, means any business carried on by a corporation other than a specified investment business or a personal services business and includes, except for the purposes of subparagraph a of the second paragraph of section 771.6, subparagraph d of the first paragraph of section 771.8.3 and subparagraph i of subparagraph c of the second paragraph of section 771.8.5, an adventure or concern in the nature of trade;

“eligible commercialization business” of a corporation, at any time, means an eligible business in respect of which the corporation holds a qualification certificate that was issued by the Minister of Economic Development, Innovation and Export Trade and that is valid at that time;

“eligible institute” means an eligible public research centre or an eligible university entity, within the meaning of paragraphs a.1 and f of section 1029.8.1;

“exempt corporation” has the meaning assigned by sections 771.12 and 771.13;

“exemption period” of a corporation means the period that begins at the beginning of the corporation’s first taxation year and ends on the earlier of

(a)  the last day of the five-year period that begins at the beginning of the corporation’s first taxation year, and

(b)  the last day of the taxation year preceding the taxation year in which the corporation ceases to be a qualified corporation;

“financial institution” means a corporation referred to in paragraph a of section 1132;

“information technology development centre” means a building designated as such by the Minister of Finance;

“manufacturing corporation” for a taxation year that begins before 1 January 2017 means a corporation whose proportion of manufacturing or processing activities for the taxation year is not less than 25%;

“new economy centre” means one or more buildings within the same region that are designated by Investissement Québec as constituting a marketplace for the new economy;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 31 May 2007, 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;

“primary and manufacturing sectors corporation” for a taxation year that begins after 31 December 2016 means a corporation whose proportion of primary and manufacturing sectors activities for the taxation year is not less than 25%;

“proportion of primary and manufacturing sectors activities” of a corporation for a taxation year means the prescribed proportion;

“proportion of the manufacturing or processing activities” of a corporation for a taxation year means the proportion that the amount determined in respect of the corporation for the year under paragraph a of section 5200 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) is of the amount determined in respect of the corporation for the year under paragraph b of section 5200 of those Regulations;

“qualified corporation” has the meaning assigned by sections 771.5 to 771.7;

“specified corporation” has the meaning assigned by section 1029.8.36.0.17;

“specified investment business” carried on by a corporation in a taxation year means a business, other than a business carried on by a savings and credit union or a business of leasing property other than immovable property, the principal purpose of which is to derive income from property, including interest, dividends, rents or royalties, unless the corporation employs in the business throughout the year more than five full-time employees, or in the course of carrying on an eligible business, any other corporation associated with it provides financial, administrative, maintenance, managerial or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than five full-time employees if those services had not been provided;

“specified partnership income” of a corporation for a taxation year means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, in respect of a partnership that is described in section 771.2.1.2.2 for the year and of which the corporation is a member in the year, equal to the lesser of 

i.  the aggregate of all amounts each of which is an amount, in respect of an eligible business carried on in Canada by the corporation as a member of the partnership, equal to the amount by which the aggregate of all amounts each of which is the corporation’s share of the income (determined in accordance with Title XI of Book III) of the partnership from the business for a fiscal period of the business that ends in the year, or an amount included in computing the corporation’s income for the year under any of sections 217.19, 217.20 and 217.28 in respect of the business exceeds the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from the business (other than an amount that was deducted by the partnership in computing its income from the business) or in respect of the business under section 217.21 or 217.27, and

ii.  the proportion of the lesser of $500,000 and the product obtained by multiplying $1,370 by the number of days included in a fiscal period of the partnership that ends in the year that the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from an eligible business carried on in Canada for a fiscal period that ends in the year is of the aggregate of all amounts each of which is the partnership’s income for a fiscal period referred to in subparagraph i from an eligible business carried on in Canada; and

(b)  the lesser of

i.  the aggregate of the amounts determined in respect of the corporation for the year under subparagraphs i and ii of paragraph a of section 771.2.1.2, and

ii.  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the amount by which the amount determined in respect of the partnership for the year under subparagraph i of paragraph a exceeds the amount determined in respect of the partnership for the year under subparagraph ii of that paragraph;

“specified partnership loss” of a corporation for a year means the aggregate of all amounts each of which is an amount, in respect of a partnership referred to in section 771.2.1.2.2 for the year and of which the corporation is a member in the year, equal to the aggregate of 

(a)  the aggregate of all amounts each of which is the corporation’s share of the loss, determined in accordance with Title XI of Book III, of the partnership for a fiscal period that ends in the year from an eligible business carried on in Canada by the corporation as a member of the partnership; and

(b)  the aggregate of all amounts each of which is the amount by which the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from an eligible business carried on in Canada by the corporation as a member of the partnership, other than an amount that was deducted by the partnership in computing its income from the business, exceeds the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period that ends in the year;

“tax-free period” of a corporation means the period beginning at the time of its incorporation and ending

(a)  on the last day of the ten-year period beginning at that time; or

(b)  if it is earlier than the day referred to in paragraph a, on the last day of the taxation year that precedes the taxation year in which the corporation ceases to be a corporation dedicated to the commercialization of intellectual property.

For the purposes of the definition of “information technology development centre” in the first paragraph, premises designated by Investissement Québec are deemed to be part of a building referred to in that definition.

For the purposes of the definition of “new economy centre” in the first paragraph, premises designated by Investissement Québec are deemed to form part of a building referred to in that definition.

Despite the definition of “eligibility period” in the first paragraph, the eligibility period of a corporation does not include any day in a taxation year for which the corporation is authorized by Investissement Québec to carry on its business outside the information technology development centre, the new economy centre or the biotechnology development centre that is mentioned in the certificate referred to in paragraph a of section 771.12, if, during that day, none of the activities of its business are carried on in Québec.

For the purposes of the definition of “oil refining corporation” in the first paragraph, the following rules apply for the purpose of determining whether a corporation is associated with a partnership or a trust at any time:

(a)  a partnership is deemed to be a corporation the taxation year of which corresponds to its fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(b)  a trust is deemed to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this subparagraph b referred to as the “distribution date”), and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  if any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  if subparagraph 1 does not apply and if that time occurs before the distribution date, are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom a property of the trust or a property for which it was substituted was directly or indirectly received.

1981, c. 12, s. 9; 1987, c. 21, s. 28; 1989, c. 5, s. 118; 1992, c. 1, s. 66; 1995, c. 63, s. 68; 1997, c. 3, s. 71; 1997, c. 85, s. 153; 1998, c. 17, s. 64; 1999, c. 83, s. 102; 2000, c. 39, s. 76; 2001, c. 51, s. 72; 2001, c. 69, s. 12; 2002, c. 9, s. 20; 2003, c. 9, s. 98; 2004, c. 21, s. 201; 2005, c. 23, s. 103; 2005, c. 38, s. 172; 2007, c. 12, s. 86; 2009, c. 5, s. 312; 2009, c. 15, s. 150; 2010, c. 5, s. 67; 2010, c. 25, s. 77; 2015, c. 21, s. 312; 2015, c. 24, s. 109; 2017, c. 1, s. 212.

2015-10-26

771.1. In this Title,

“biotechnology development centre” means a building designated as such by Investissement Québec;

“corporation dedicated to the commercialization of intellectual property” has the meaning assigned by sections 771.14 and 771.15;

“eligibility date” of a corporation means

(a)  where the corporation carries on or may carry on its business in an information technology development centre, 26 March 1997;

(b)  where the corporation carries on or may carry on its business in a new economy centre, 10 March 1999; and

(c)  where the corporation carries on or may carry on its business in a biotechnology development centre, 30 March 2001;

“eligibility period” of a corporation means the five-year period that begins on the day of coming into force of the certificate referred to in paragraph a of section 771.12 that was issued in its respect or, if it is later, on the corporation’s eligibility date, unless the corporation ceases to be an exempt corporation,

(a)  at the beginning of a particular taxation year following an acquisition of control referred to in subparagraph f of the first paragraph of section 771.13 that occurred in the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends immediately before the acquisition of control;

(b)  at the beginning of a particular taxation year following an election by the corporation under subparagraph g of the first paragraph of section 771.13 to become a specified corporation from a particular day of the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends the day before that particular day; or

(c)  in a particular taxation year, other than the one referred to in paragraph a or b, and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends on the last day of the taxation year preceding the particular year;

“eligible business”, in relation to any business carried on by a corporation, means any business carried on by a corporation other than a specified investment business or a personal services business and includes, except for the purposes of subparagraph a of the second paragraph of section 771.6, subparagraph d of the first paragraph of section 771.8.3 and subparagraph i of subparagraph c of the second paragraph of section 771.8.5, an adventure or concern in the nature of trade;

“eligible commercialization business” of a corporation, at any time, means an eligible business in respect of which the corporation holds a qualification certificate that was issued by the Minister of Economic Development, Innovation and Export Trade and that is valid at that time;

“eligible institute” means an eligible public research centre or an eligible university entity, within the meaning of paragraphs a.1 and f of section 1029.8.1;

“exempt corporation” has the meaning assigned by sections 771.12 and 771.13;

“exemption period” of a corporation means the period that begins at the beginning of the corporation’s first taxation year and ends on the earlier of

(a)  the last day of the five-year period that begins at the beginning of the corporation’s first taxation year, and

(b)  the last day of the taxation year preceding the taxation year in which the corporation ceases to be a qualified corporation;

“financial institution” means a corporation referred to in paragraph a of section 1132;

“information technology development centre” means a building designated as such by the Minister of Finance;

“manufacturing corporation” for a taxation year means a corporation the proportion of the manufacturing or processing activities of which for the taxation year is not less than 25%;

“new economy centre” means one or more buildings within the same region that are designated by Investissement Québec as constituting a marketplace for the new economy;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 31 May 2007, 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;

“proportion of the manufacturing or processing activities” of a corporation for a taxation year means the proportion that the amount determined in respect of the corporation for the year under paragraph a of section 5200 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) is of the amount determined in respect of the corporation for the year under paragraph b of section 5200 of those Regulations;

“qualified corporation” has the meaning assigned by sections 771.5 to 771.7;

“specified corporation” has the meaning assigned by section 1029.8.36.0.17;

“specified investment business” carried on by a corporation in a taxation year means a business, other than a business carried on by a savings and credit union or a business of leasing property other than immovable property, the principal purpose of which is to derive income from property, including interest, dividends, rents or royalties, unless the corporation employs in the business throughout the year more than five full-time employees, or in the course of carrying on an eligible business, any other corporation associated with it provides financial, administrative, maintenance, managerial or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than five full-time employees if those services had not been provided;

“specified partnership income” of a corporation for a taxation year means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the lesser of

i.  the aggregate of all amounts each of which is an amount, in respect of an eligible business carried on in Canada by the corporation as a member of the partnership, equal to the amount by which the aggregate of all amounts each of which is the corporation’s share of the income (determined in accordance with Title XI of Book III) of the partnership from the business for a fiscal period of the business that ends in the year, or an amount included in computing the corporation’s income for the year under any of sections 217.19, 217.20 and 217.28 in respect of the business exceeds the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from the business (other than an amount that was deducted by the partnership in computing its income from the business) or in respect of the business under section 217.21 or 217.27, and

ii.  the proportion of the lesser of $500,000 and the product obtained by multiplying $1,370 by the number of days included in a fiscal period of the partnership that ends in the year that the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from an eligible business carried on in Canada for a fiscal period that ends in the year is of the aggregate of all amounts each of which is the partnership’s income for a fiscal period referred to in subparagraph i from an eligible business carried on in Canada; and

(b)  the lesser of

i.  the aggregate of the amounts determined in respect of the corporation for the year under subparagraphs i and ii of paragraph a of section 771.2.1.2, and

ii.  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the amount by which the amount determined in respect of the partnership for the year under subparagraph i of paragraph a exceeds the amount determined in respect of the partnership for the year under subparagraph ii of that paragraph;

“specified partnership loss” of a corporation for a taxation year means the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the aggregate of

(a)  the aggregate of all amounts each of which is the corporation’s share of the loss, determined in accordance with Title XI of Book III, of the partnership for a fiscal period that ends in the year from an eligible business carried on in Canada by the corporation as a member of the partnership; and

(b)  the aggregate of all amounts each of which is the amount by which the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from an eligible business carried on in Canada by the corporation as a member of the partnership, other than an amount that was deducted by the partnership in computing its income from the business, exceeds the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period that ends in the year;

“tax-free period” of a corporation means the period beginning at the time of its incorporation and ending

(a)  on the last day of the ten-year period beginning at that time; or

(b)  if it is earlier than the day referred to in paragraph a, on the last day of the taxation year that precedes the taxation year in which the corporation ceases to be a corporation dedicated to the commercialization of intellectual property.

For the purposes of the definition of “information technology development centre” in the first paragraph, premises designated by Investissement Québec are deemed to be part of a building referred to in that definition.

For the purposes of the definition of “new economy centre” in the first paragraph, premises designated by Investissement Québec are deemed to form part of a building referred to in that definition.

Despite the definition of “eligibility period” in the first paragraph, the eligibility period of a corporation does not include any day in a taxation year for which the corporation is authorized by Investissement Québec to carry on its business outside the information technology development centre, the new economy centre or the biotechnology development centre that is mentioned in the certificate referred to in paragraph a of section 771.12, if, during that day, none of the activities of its business are carried on in Québec.

For the purposes of the definition of “oil refining corporation” in the first paragraph, the following rules apply for the purpose of determining whether a corporation is associated with a partnership or a trust at any time:

(a)  a partnership is deemed to be a corporation the taxation year of which corresponds to its fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(b)  a trust is deemed to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this subparagraph b referred to as the “distribution date”), and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  if any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  if subparagraph 1 does not apply and if that time occurs before the distribution date, are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom a property of the trust or a property for which it was substituted was directly or indirectly received.

1981, c. 12, s. 9; 1987, c. 21, s. 28; 1989, c. 5, s. 118; 1992, c. 1, s. 66; 1995, c. 63, s. 68; 1997, c. 3, s. 71; 1997, c. 85, s. 153; 1998, c. 17, s. 64; 1999, c. 83, s. 102; 2000, c. 39, s. 76; 2001, c. 51, s. 72; 2001, c. 69, s. 12; 2002, c. 9, s. 20; 2003, c. 9, s. 98; 2004, c. 21, s. 201; 2005, c. 23, s. 103; 2005, c. 38, s. 172; 2007, c. 12, s. 86; 2009, c. 5, s. 312; 2009, c. 15, s. 150; 2010, c. 5, s. 67; 2010, c. 25, s. 77; 2015, c. 21, s. 312; 2015, c. 24, s. 109.

2015-10-21

771.1. In this Title,

“biotechnology development centre” means a building designated as such by Investissement Québec;

“corporation dedicated to the commercialization of intellectual property” has the meaning assigned by sections 771.14 and 771.15;

“eligibility date” of a corporation means

(a)  where the corporation carries on or may carry on its business in an information technology development centre, 26 March 1997;

(b)  where the corporation carries on or may carry on its business in a new economy centre, 10 March 1999; and

(c)  where the corporation carries on or may carry on its business in a biotechnology development centre, 30 March 2001;

“eligibility period” of a corporation means the five-year period that begins on the day of coming into force of the certificate referred to in paragraph a of section 771.12 that was issued in its respect or, if it is later, on the corporation’s eligibility date, unless the corporation ceases to be an exempt corporation,

(a)  at the beginning of a particular taxation year following an acquisition of control referred to in subparagraph f of the first paragraph of section 771.13 that occurred in the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends immediately before the acquisition of control;

(b)  at the beginning of a particular taxation year following an election by the corporation under subparagraph g of the first paragraph of section 771.13 to become a specified corporation from a particular day of the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends the day before that particular day; or

(c)  in a particular taxation year, other than the one referred to in paragraph a or b, and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends on the last day of the taxation year preceding the particular year;

“eligible business”, in relation to any business carried on by a corporation, means any business carried on by a corporation other than a specified investment business or a personal services business and includes, except for the purposes of subparagraph a of the second paragraph of section 771.6, subparagraph d of the first paragraph of section 771.8.3 and subparagraph i of subparagraph c of the second paragraph of section 771.8.5, an adventure or concern in the nature of trade;

“eligible commercialization business” of a corporation, at any time, means an eligible business in respect of which the corporation holds a qualification certificate that was issued by the Minister of Economic Development, Innovation and Export Trade and that is valid at that time;

“eligible institute” means an eligible public research centre or an eligible university entity, within the meaning of paragraphs a.1 and f of section 1029.8.1;

“exempt corporation” has the meaning assigned by sections 771.12 and 771.13;

“exemption period” of a corporation means the period that begins at the beginning of the corporation’s first taxation year and ends on the earlier of

(a)  the last day of the five-year period that begins at the beginning of the corporation’s first taxation year, and

(b)  the last day of the taxation year preceding the taxation year in which the corporation ceases to be a qualified corporation;

“financial institution” means a corporation referred to in paragraph a of section 1132;

“information technology development centre” means a building designated as such by the Minister of Finance;

“manufacturing corporation” for a taxation year means a corporation the proportion of the manufacturing or processing activities of which for the taxation year is not less than 25%;

“new economy centre” means one or more buildings within the same region that are designated by Investissement Québec as constituting a marketplace for the new economy;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 31 May 2007, 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;

“proportion of the manufacturing or processing activities” of a corporation for a taxation year means the proportion that the amount determined in respect of the corporation for the year under paragraph a of section 5200 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) is of the amount determined in respect of the corporation for the year under paragraph b of section 5200 of those Regulations;

“qualified corporation” has the meaning assigned by sections 771.5 to 771.7;

“specified corporation” has the meaning assigned by section 1029.8.36.0.17;

“specified investment business” carried on by a corporation in a taxation year means a business, other than a business carried on by a savings and credit union or a business of leasing property other than immovable property, the principal purpose of which is to derive income from property, including interest, dividends, rents or royalties, unless the corporation employs in the business throughout the year more than five full-time employees, or in the course of carrying on an eligible business, any other corporation associated with it provides financial, administrative, maintenance, managerial or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than five full-time employees if those services had not been provided;

“specified partnership income” of a corporation for a taxation year means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the lesser of

i.  the aggregate of all amounts each of which is an amount, in respect of an eligible business carried on in Canada by the corporation as a member of the partnership, equal to the amount by which the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period of the business that ends in the year, exceeds the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from the business, other than an amount that was deducted by the partnership in computing its income from the business, and

ii.  the proportion of the lesser of $500,000 and the product obtained by multiplying $1,370 by the number of days included in a fiscal period of the partnership that ends in the year that the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from an eligible business carried on in Canada for a fiscal period that ends in the year is of the aggregate of all amounts each of which is the partnership’s income for a fiscal period referred to in subparagraph i from an eligible business carried on in Canada; and

(b)  the lesser of

i.  the aggregate of the amounts determined in respect of the corporation for the year under subparagraphs i and ii of paragraph a of section 771.2.1.2, and

ii.  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the amount by which the amount determined in respect of the partnership for the year under subparagraph i of paragraph a exceeds the amount determined in respect of the partnership for the year under subparagraph ii of that paragraph;

“specified partnership loss” of a corporation for a taxation year means the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the aggregate of

(a)  the aggregate of all amounts each of which is the corporation’s share of the loss, determined in accordance with Title XI of Book III, of the partnership for a fiscal period that ends in the year from an eligible business carried on in Canada by the corporation as a member of the partnership; and

(b)  the aggregate of all amounts each of which is the amount by which the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from an eligible business carried on in Canada by the corporation as a member of the partnership, other than an amount that was deducted by the partnership in computing its income from the business, exceeds the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period that ends in the year;

“tax-free period” of a corporation means the period beginning at the time of its incorporation and ending

(a)  on the last day of the ten-year period beginning at that time; or

(b)  if it is earlier than the day referred to in paragraph a, on the last day of the taxation year that precedes the taxation year in which the corporation ceases to be a corporation dedicated to the commercialization of intellectual property.

For the purposes of the definition of “information technology development centre” in the first paragraph, premises designated by Investissement Québec are deemed to be part of a building referred to in that definition.

For the purposes of the definition of “new economy centre” in the first paragraph, premises designated by Investissement Québec are deemed to form part of a building referred to in that definition.

Despite the definition of “eligibility period” in the first paragraph, the eligibility period of a corporation does not include any day in a taxation year for which the corporation is authorized by Investissement Québec to carry on its business outside the information technology development centre, the new economy centre or the biotechnology development centre that is mentioned in the certificate referred to in paragraph a of section 771.12, if, during that day, none of the activities of its business are carried on in Québec.

For the purposes of the definition of “oil refining corporation” in the first paragraph, the following rules apply for the purpose of determining whether a corporation is associated with a partnership or a trust at any time:

(a)  a partnership is deemed to be a corporation the taxation year of which corresponds to its fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(b)  a trust is deemed to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this subparagraph b referred to as the “distribution date”), and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  if any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  if subparagraph 1 does not apply and if that time occurs before the distribution date, are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom a property of the trust or a property for which it was substituted was directly or indirectly received.

1981, c. 12, s. 9; 1987, c. 21, s. 28; 1989, c. 5, s. 118; 1992, c. 1, s. 66; 1995, c. 63, s. 68; 1997, c. 3, s. 71; 1997, c. 85, s. 153; 1998, c. 17, s. 64; 1999, c. 83, s. 102; 2000, c. 39, s. 76; 2001, c. 51, s. 72; 2001, c. 69, s. 12; 2002, c. 9, s. 20; 2003, c. 9, s. 98; 2004, c. 21, s. 201; 2005, c. 23, s. 103; 2005, c. 38, s. 172; 2007, c. 12, s. 86; 2009, c. 5, s. 312; 2009, c. 15, s. 150; 2010, c. 5, s. 67; 2010, c. 25, s. 77; 2015, c. 21, s. 312.

2010-10-27

771.1. In this Title,

“biotechnology development centre” means a building designated as such by Investissement Québec;

“corporation dedicated to the commercialization of intellectual property” has the meaning assigned by sections 771.14 and 771.15;

“eligibility date” of a corporation means

(a)  where the corporation carries on or may carry on its business in an information technology development centre, 26 March 1997;

(b)  where the corporation carries on or may carry on its business in a new economy centre, 10 March 1999; and

(c)  where the corporation carries on or may carry on its business in a biotechnology development centre, 30 March 2001;

“eligibility period” of a corporation means the five-year period that begins on the day of coming into force of the certificate referred to in paragraph a of section 771.12 that was issued in its respect or, if it is later, on the corporation’s eligibility date, unless the corporation ceases to be an exempt corporation,

(a)  at the beginning of a particular taxation year following an acquisition of control referred to in subparagraph f of the first paragraph of section 771.13 that occurred in the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends immediately before the acquisition of control;

(b)  at the beginning of a particular taxation year following an election by the corporation under subparagraph g of the first paragraph of section 771.13 to become a specified corporation from a particular day of the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends the day before that particular day; or

(c)  in a particular taxation year, other than the one referred to in paragraph a or b, and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends on the last day of the taxation year preceding the particular year;

“eligible business”, in relation to any business carried on by a corporation, means any business carried on by a corporation other than a specified investment business or a personal services business and includes, except for the purposes of subparagraph a of the second paragraph of section 771.6, subparagraph d of the first paragraph of section 771.8.3 and subparagraph i of subparagraph c of the second paragraph of section 771.8.5, an adventure or concern in the nature of trade;

“eligible commercialization business” of a corporation, at any time, means an eligible business in respect of which the corporation holds a qualification certificate that was issued by the Minister of Economic Development, Innovation and Export Trade and that is valid at that time;

“eligible institute” means an eligible public research centre or an eligible university entity, within the meaning of paragraphs a.1 and f of section 1029.8.1;

“exempt corporation” has the meaning assigned by sections 771.12 and 771.13;

“exemption period” of a corporation means the period that begins at the beginning of the corporation’s first taxation year and ends on the earlier of

(a)  the last day of the five-year period that begins at the beginning of the corporation’s first taxation year, and

(b)  the last day of the taxation year preceding the taxation year in which the corporation ceases to be a qualified corporation;

“financial institution” means a corporation referred to in paragraph a of section 1132;

“information technology development centre” means a building designated as such by the Minister of Finance;

“new economy centre” means one or more buildings within the same region that are designated by Investissement Québec as constituting a marketplace for the new economy;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 31 May 2007, 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” has the meaning assigned by sections 771.5 to 771.7;

“specified corporation” has the meaning assigned by section 1029.8.36.0.17;

“specified investment business” carried on by a corporation in a taxation year means a business, other than a business carried on by a savings and credit union or a business of leasing property other than immovable property, the principal purpose of which is to derive income from property, including interest, dividends, rents or royalties, unless the corporation employs in the business throughout the year more than five full-time employees, or in the course of carrying on an eligible business, any other corporation associated with it provides financial, administrative, maintenance, managerial or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than five full-time employees if those services had not been provided;

“specified partnership income” of a corporation for a taxation year means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the lesser of

i.  the aggregate of all amounts each of which is an amount, in respect of an eligible business carried on in Canada by the corporation as a member of the partnership, equal to the amount by which the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period of the business that ends in the year, exceeds the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from the business, other than an amount that was deducted by the partnership in computing its income from the business, and

ii.  the proportion of the lesser of $500,000 and the product obtained by multiplying $1,370 by the number of days included in a fiscal period of the partnership that ends in the year that the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from an eligible business carried on in Canada for a fiscal period that ends in the year is of the aggregate of all amounts each of which is the partnership’s income for a fiscal period referred to in subparagraph i from an eligible business carried on in Canada; and

(b)  the lesser of

i.  the aggregate of the amounts determined in respect of the corporation for the year under subparagraphs i and ii of paragraph a of section 771.2.1.2, and

ii.  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the amount by which the amount determined in respect of the partnership for the year under subparagraph i of paragraph a exceeds the amount determined in respect of the partnership for the year under subparagraph ii of that paragraph;

“specified partnership loss” of a corporation for a taxation year means the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the aggregate of

(a)  the aggregate of all amounts each of which is the corporation’s share of the loss, determined in accordance with Title XI of Book III, of the partnership for a fiscal period that ends in the year from an eligible business carried on in Canada by the corporation as a member of the partnership; and

(b)  the aggregate of all amounts each of which is the amount by which the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from an eligible business carried on in Canada by the corporation as a member of the partnership, other than an amount that was deducted by the partnership in computing its income from the business, exceeds the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period that ends in the year;

“tax-free period” of a corporation means the period beginning at the time of its incorporation and ending

(a)  on the last day of the ten-year period beginning at that time; or

(b)  if it is earlier than the day referred to in paragraph a, on the last day of the taxation year that precedes the taxation year in which the corporation ceases to be a corporation dedicated to the commercialization of intellectual property.

For the purposes of the definition of “information technology development centre” in the first paragraph, premises designated by Investissement Québec are deemed to be part of a building referred to in that definition.

For the purposes of the definition of “new economy centre” in the first paragraph, premises designated by Investissement Québec are deemed to form part of a building referred to in that definition.

Despite the definition of “eligibility period” in the first paragraph, the eligibility period of a corporation does not include any day in a taxation year for which the corporation is authorized by Investissement Québec to carry on its business outside the information technology development centre, the new economy centre or the biotechnology development centre that is mentioned in the certificate referred to in paragraph a of section 771.12, if, during that day, none of the activities of its business are carried on in Québec.

For the purposes of the definition of “oil refining corporation” in the first paragraph, the following rules apply for the purpose of determining whether a corporation is associated with a partnership or a trust at any time:

(a)  a partnership is deemed to be a corporation the taxation year of which corresponds to its fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(b)  a trust is deemed to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this subparagraph b referred to as the “distribution date”), and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  if any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  if subparagraph 1 does not apply and if that time occurs before the distribution date, are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom a property of the trust or a property for which it was substituted was directly or indirectly received.

1981, c. 12, s. 9; 1987, c. 21, s. 28; 1989, c. 5, s. 118; 1992, c. 1, s. 66; 1995, c. 63, s. 68; 1997, c. 3, s. 71; 1997, c. 85, s. 153; 1998, c. 17, s. 64; 1999, c. 83, s. 102; 2000, c. 39, s. 76; 2001, c. 51, s. 72; 2001, c. 69, s. 12; 2002, c. 9, s. 20; 2003, c. 9, s. 98; 2004, c. 21, s. 201; 2005, c. 23, s. 103; 2005, c. 38, s. 172; 2007, c. 12, s. 86; 2009, c. 5, s. 312; 2009, c. 15, s. 150; 2010, c. 5, s. 67; 2010, c. 25, s. 77.

2010-04-20

771.1. In this Title,

“biotechnology development centre” means a building designated as such by Investissement Québec;

“corporation dedicated to the commercialization of intellectual property” has the meaning assigned by sections 771.14 and 771.15;

“eligibility date” of a corporation means

(a)  where the corporation carries on or may carry on its business in an information technology development centre, 26 March 1997;

(b)  where the corporation carries on or may carry on its business in a new economy centre, 10 March 1999; and

(c)  where the corporation carries on or may carry on its business in a biotechnology development centre, 30 March 2001;

“eligibility period” of a corporation means the five-year period that begins on the day of coming into force of the certificate referred to in paragraph a of section 771.12 that was issued in its respect or, if it is later, on the corporation’s eligibility date, unless the corporation ceases to be an exempt corporation,

(a)  at the beginning of a particular taxation year following an acquisition of control referred to in subparagraph f of the first paragraph of section 771.13 that occurred in the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends immediately before the acquisition of control;

(b)  at the beginning of a particular taxation year following an election by the corporation under subparagraph g of the first paragraph of section 771.13 to become a specified corporation from a particular day of the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends the day before that particular day; or

(c)  in a particular taxation year, other than the one referred to in paragraph a or b, and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends on the last day of the taxation year preceding the particular year;

“eligible business”, in relation to any business carried on by a corporation, means any business carried on by a corporation other than a specified investment business or a personal services business and includes, except for the purposes of subparagraph a of the second paragraph of section 771.6, subparagraph d of the first paragraph of section 771.8.3 and subparagraph i of subparagraph c of the second paragraph of section 771.8.5, an adventure or concern in the nature of trade;

“eligible commercialization business” of a corporation, at any time, means an eligible business in respect of which the corporation holds a qualification certificate that was issued by the Minister of Economic Development, Innovation and Export Trade and that is valid at that time;

“eligible institute” means an eligible public research centre or an eligible university entity, within the meaning of paragraphs a.1 and f of section 1029.8.1;

“exempt corporation” has the meaning assigned by sections 771.12 and 771.13;

“exemption period” of a corporation means the period that begins at the beginning of the corporation’s first taxation year and ends on the earlier of

(a)  the last day of the five-year period that begins at the beginning of the corporation’s first taxation year, and

(b)  the last day of the taxation year preceding the taxation year in which the corporation ceases to be a qualified corporation;

“exemption period”(période d’exemption) of a corporation means the period beginning at the time of its incorporation and ending

(a)  on the last day of the ten-year period beginning at that time; or

(b)  if it is earlier than the day referred to in paragraph a, on the last day of the taxation year that precedes the taxation year in which the corporation ceases to be a corporation dedicated to the commercialization of intellectual property;

“financial institution” means a corporation referred to in paragraph a of section 1132;

“information technology development centre” means a building designated as such by the Minister of Finance;

“new economy centre” means one or more buildings within the same region that are designated by Investissement Québec as constituting a marketplace for the new economy;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 31 May 2007, 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” has the meaning assigned by sections 771.5 to 771.7;

“specified corporation” has the meaning assigned by section 1029.8.36.0.17;

“specified investment business” carried on by a corporation in a taxation year means a business, other than a business carried on by a savings and credit union or a business of leasing property other than immovable property, the principal purpose of which is to derive income from property, including interest, dividends, rents or royalties, unless the corporation employs in the business throughout the year more than five full-time employees, or in the course of carrying on an eligible business, any other corporation associated with it provides financial, administrative, maintenance, managerial or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than five full-time employees if those services had not been provided;

“specified partnership income” of a corporation for a taxation year means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the lesser of

i.  the aggregate of all amounts each of which is an amount, in respect of an eligible business carried on in Canada by the corporation as a member of the partnership, equal to the amount by which the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period of the business that ends in the year, exceeds the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from the business, other than an amount that was deducted by the partnership in computing its income from the business, and

ii.  the proportion of the lesser of $500,000 and the product obtained by multiplying $1,370 by the number of days included in a fiscal period of the partnership that ends in the year that the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from an eligible business carried on in Canada for a fiscal period that ends in the year is of the aggregate of all amounts each of which is the partnership’s income for a fiscal period referred to in subparagraph i from an eligible business carried on in Canada; and

(b)  the lesser of

i.  the aggregate of the amounts determined in respect of the corporation for the year under subparagraphs i and ii of paragraph a of section 771.2.1.2, and

ii.  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the amount by which the amount determined in respect of the partnership for the year under subparagraph i of paragraph a exceeds the amount determined in respect of the partnership for the year under subparagraph ii of that paragraph;

“specified partnership loss” of a corporation for a taxation year means the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the aggregate of

(a)  the aggregate of all amounts each of which is the corporation’s share of the loss, determined in accordance with Title XI of Book III, of the partnership for a fiscal period that ends in the year from an eligible business carried on in Canada by the corporation as a member of the partnership; and

(b)  the aggregate of all amounts each of which is the amount by which the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from an eligible business carried on in Canada by the corporation as a member of the partnership, other than an amount that was deducted by the partnership in computing its income from the business, exceeds the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period that ends in the year.

For the purposes of the definition of “information technology development centre” in the first paragraph, premises designated Investissement Québec are deemed to be part of a building referred to in that definition.

For the purposes of the definition of “new economy centre” in the first paragraph, premises designated by Investissement Québec are deemed to form part of a building referred to in that definition.

Despite the definition of “eligibility period” in the first paragraph, the eligibility period of a corporation does not include any day in a taxation year for which the corporation is authorized by Investissement Québec to carry on its business outside the information technology development centre, the new economy centre or the biotechnology development centre that is mentioned in the certificate referred to in paragraph a of section 771.12, if, during that day, none of the activities of its business are carried on in Québec.

For the purposes of the definition of “oil refining corporation” in the first paragraph, the following rules apply for the purpose of determining whether a corporation is associated with a partnership or a trust at any time:

(a)  a partnership is deemed to be a corporation the taxation year of which corresponds to its fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(b)  a trust is deemed to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this subparagraph b referred to as the “distribution date”), and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  if any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  if subparagraph 1 does not apply and if that time occurs before the distribution date, are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom a property of the trust or a property for which it was substituted was directly or indirectly received.

1981, c. 12, s. 9; 1987, c. 21, s. 28; 1989, c. 5, s. 118; 1992, c. 1, s. 66; 1995, c. 63, s. 68; 1997, c. 3, s. 71; 1997, c. 85, s. 153; 1998, c. 17, s. 64; 1999, c. 83, s. 102; 2000, c. 39, s. 76; 2001, c. 51, s. 72; 2001, c. 69, s. 12; 2002, c. 9, s. 20; 2003, c. 9, s. 98; 2004, c. 21, s. 201; 2005, c. 23, s. 103; 2005, c. 38, s. 172; 2007, c. 12, s. 86; 2009, c. 5, s. 312; 2009, c. 15, s. 150; 2010, c. 5, s. 67.

2009-06-04

771.1. In this Title,

“biotechnology development centre” means a building designated as such by Investissement Québec;

“eligibility date” of a corporation means

(a)  where the corporation carries on or may carry on its business in an information technology development centre, 26 March 1997;

(b)  where the corporation carries on or may carry on its business in a new economy centre, 10 March 1999; and

(c)  where the corporation carries on or may carry on its business in a biotechnology development centre, 30 March 2001;

“eligibility period” of a corporation means the five-year period that begins on the day of coming into force of the certificate referred to in paragraph a of section 771.12 that was issued in its respect or, if it is later, on the corporation’s eligibility date, unless the corporation ceases to be an exempt corporation,

(a)  at the beginning of a particular taxation year following an acquisition of control referred to in subparagraph f of the first paragraph of section 771.13 that occurred in the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends immediately before the acquisition of control;

(b)  at the beginning of a particular taxation year following an election by the corporation under subparagraph g of the first paragraph of section 771.13 to become a specified corporation from a particular day of the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends the day before that particular day; or

(c)  in a particular taxation year, other than the one referred to in paragraph a or b, and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends on the last day of the taxation year preceding the particular year;

“eligible business”, in relation to any business carried on by a corporation, means any business carried on by a corporation other than a specified investment business or a personal services business and includes, except for the purposes of subparagraph a of the second paragraph of section 771.6, subparagraph d of the first paragraph of section 771.8.3 and subparagraph i of subparagraph c of the second paragraph of section 771.8.5, an adventure or concern in the nature of trade;

“exempt corporation” has the meaning assigned by sections 771.12 and 771.13;

“exemption period” of a corporation means the period that begins at the beginning of the corporation’s first taxation year and ends on the earlier of

(a)  the last day of the five-year period that begins at the beginning of the corporation’s first taxation year, and

(b)  the last day of the taxation year preceding the taxation year in which the corporation ceases to be a qualified corporation;

“financial institution” means a corporation referred to in paragraph a of section 1132;

“information technology development centre” means a building designated as such by the Minister of Finance;

“new economy centre” means one or more buildings within the same region that are designated by Investissement Québec as constituting a marketplace for the new economy;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 31 May 2007, 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” has the meaning assigned by sections 771.5 to 771.7;

“specified corporation” has the meaning assigned by section 1029.8.36.0.17;

“specified investment business” carried on by a corporation in a taxation year means a business, other than a business carried on by a savings and credit union or a business of leasing property other than immovable property, the principal purpose of which is to derive income from property, including interest, dividends, rents or royalties, unless the corporation employs in the business throughout the year more than five full-time employees, or in the course of carrying on an eligible business, any other corporation associated with it provides financial, administrative, maintenance, managerial or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than five full-time employees if those services had not been provided;

“specified partnership income” of a corporation for a taxation year means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the lesser of

i.  the aggregate of all amounts each of which is an amount, in respect of an eligible business carried on in Canada by the corporation as a member of the partnership, equal to the amount by which the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period of the business that ends in the year, exceeds the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from the business, other than an amount that was deducted by the partnership in computing its income from the business, and

ii.  the proportion of the lesser of $400,000 and the product obtained by multiplying $1,096 by the number of days included in a fiscal period of the partnership that ends in the year that the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from an eligible business carried on in Canada for a fiscal period that ends in the year is of the aggregate of all amounts each of which is the partnership’s income for a fiscal period referred to in subparagraph i from an eligible business carried on in Canada; and

(b)  the lesser of

i.  the aggregate of the amounts determined in respect of the corporation for the year under subparagraphs i and ii of paragraph a of section 771.2.1.2, and

ii.  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the amount by which the amount determined in respect of the partnership for the year under subparagraph i of paragraph a exceeds the amount determined in respect of the partnership for the year under subparagraph ii of that paragraph;

“specified partnership loss” of a corporation for a taxation year means the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the aggregate of

(a)  the aggregate of all amounts each of which is the corporation’s share of the loss, determined in accordance with Title XI of Book III, of the partnership for a fiscal period that ends in the year from an eligible business carried on in Canada by the corporation as a member of the partnership; and

(b)  the aggregate of all amounts each of which is the amount by which the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from an eligible business carried on in Canada by the corporation as a member of the partnership, other than an amount that was deducted by the partnership in computing its income from the business, exceeds the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period that ends in the year.

For the purposes of the definition of “information technology development centre” in the first paragraph, premises designated Investissement Québec are deemed to be part of a building referred to in that definition.

For the purposes of the definition of “new economy centre” in the first paragraph, premises designated by Investissement Québec are deemed to form part of a building referred to in that definition.

Despite the definition of “eligibility period” in the first paragraph, the eligibility period of a corporation does not include any day in a taxation year for which the corporation is authorized by Investissement Québec to carry on its business outside the information technology development centre, the new economy centre or the biotechnology development centre that is mentioned in the certificate referred to in paragraph a of section 771.12, if, during that day, none of the activities of its business are carried on in Québec.

For the purposes of the definition of “oil refining corporation” in the first paragraph, the following rules apply for the purpose of determining whether a corporation is associated with a partnership or a trust at any time:

(a)  a partnership is deemed to be a corporation the taxation year of which corresponds to its fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(b)  a trust is deemed to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this subparagraph b referred to as the “distribution date”), and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  if any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  if subparagraph 1 does not apply and if that time occurs before the distribution date, are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom a property of the trust or a property for which it was substituted was directly or indirectly received.

1981, c. 12, s. 9; 1987, c. 21, s. 28; 1989, c. 5, s. 118; 1992, c. 1, s. 66; 1995, c. 63, s. 68; 1997, c. 3, s. 71; 1997, c. 85, s. 153; 1998, c. 17, s. 64; 1999, c. 83, s. 102; 2000, c. 39, s. 76; 2001, c. 51, s. 72; 2001, c. 69, s. 12; 2002, c. 9, s. 20; 2003, c. 9, s. 98; 2004, c. 21, s. 201; 2005, c. 23, s. 103; 2005, c. 38, s. 172; 2007, c. 12, s. 86; 2009, c. 5, s. 312; 2009, c. 15, s. 150.

2009-05-15

771.1. In this Title,

“biotechnology development centre” means a building designated as such by Investissement Québec;

“eligibility date” of a corporation means

(a)  where the corporation carries on or may carry on its business in an information technology development centre, 26 March 1997;

(b)  where the corporation carries on or may carry on its business in a new economy centre, 10 March 1999; and

(c)  where the corporation carries on or may carry on its business in a biotechnology development centre, 30 March 2001;

“eligibility period” of a corporation means the five-year period that begins on the day of coming into force of the certificate referred to in paragraph a of section 771.12 that was issued in its respect or, if it is later, on the corporation’s eligibility date, unless the corporation ceases to be an exempt corporation,

(a)  at the beginning of a particular taxation year following an acquisition of control referred to in subparagraph f of the first paragraph of section 771.13 that occurred in the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends immediately before the acquisition of control;

(b)  at the beginning of a particular taxation year following an election by the corporation under subparagraph g of the first paragraph of section 771.13 to become a specified corporation from a particular day of the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends the day before that particular day; or

(c)  in a particular taxation year, other than the one referred to in paragraph a or b, and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends on the last day of the taxation year preceding the particular year;

“eligible business”, in relation to any business carried on by a corporation, means any business carried on by a corporation other than a specified investment business or a personal services business and includes, except for the purposes of subparagraph a of the second paragraph of section 771.6, subparagraph d of the first paragraph of section 771.8.3 and subparagraph i of subparagraph c of the second paragraph of section 771.8.5, an adventure or concern in the nature of trade;

“exempt corporation” has the meaning assigned by sections 771.12 and 771.13;

“exemption period” of a corporation means the period that begins at the beginning of the corporation’s first taxation year and ends on the earlier of

(a)  the last day of the five-year period that begins at the beginning of the corporation’s first taxation year, and

(b)  the last day of the taxation year preceding the taxation year in which the corporation ceases to be a qualified corporation;

“financial institution” means a corporation referred to in paragraph a of section 1132;

“information technology development centre” means a building designated as such by the Minister of Finance;

“new economy centre” means one or more buildings within the same region that are designated by Investissement Québec as constituting a marketplace for the new economy;

“oil refining corporation” for a taxation year means a corporation that, at any time in the year after 31 May 2007, 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” has the meaning assigned by sections 771.5 to 771.7;

“specified corporation” has the meaning assigned by section 1029.8.36.0.17;

“specified investment business” carried on by a corporation in a taxation year means a business, other than a business carried on by a savings and credit union or a business of leasing property other than immovable property, the principal purpose of which is to derive income from property, including interest, dividends, rents or royalties, unless the corporation employs in the business throughout the year more than five full-time employees, or in the course of carrying on an eligible business, any other corporation associated with it provides financial, administrative, maintenance, managerial or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than five full-time employees if those services had not been provided;

“specified partnership income” of a corporation for a taxation year means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the lesser of

i.  the aggregate of all amounts each of which is an amount, in respect of an eligible business carried on in Canada by the corporation as a member of the partnership, equal to the amount by which the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period of the business that ends in the year, exceeds the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from the business, other than an amount that was deducted by the partnership in computing its income from the business, and

ii.  the proportion of the lesser of $400,000 and the product obtained by multiplying $1,096 by the number of days included in a fiscal period of the partnership that ends in the year that the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from an eligible business carried on in Canada for a fiscal period that ends in the year is of the aggregate of all amounts each of which is the partnership’s income for a fiscal period referred to in subparagraph i from an eligible business carried on in Canada; and

(b)  the lesser of

i.  the aggregate of the amounts determined in respect of the corporation for the year under subparagraphs i and ii of paragraph a of section 771.2.1.2, and

ii.  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the amount by which the amount determined in respect of the partnership for the year under subparagraph i of paragraph a exceeds the amount determined in respect of the partnership for the year under subparagraph ii of that paragraph;

“specified partnership loss” of a corporation for a taxation year means the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the aggregate of

(a)  the aggregate of all amounts each of which is the corporation’s share of the loss, determined in accordance with Title XI of Book III, of the partnership for a fiscal period that ends in the year from an eligible business carried on in Canada by the corporation as a member of the partnership; and

(b)  the aggregate of all amounts each of which is the amount by which the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from an eligible business carried on in Canada by the corporation as a member of the partnership, other than an amount that was deducted by the partnership in computing its income from the business, exceeds the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period that ends in the year.

For the purposes of the definition of “information technology development centre” in the first paragraph, premises designated Investissement Québec are deemed to be part of a building referred to in that definition.

For the purposes of the definition of “new economy centre” in the first paragraph, premises designated by Investissement Québec are deemed to form part of a building referred to in that definition.

Despite the definition of “eligibility period” in the first paragraph, the eligibility period of a corporation does not include any day in a taxation year for which the corporation is authorized by Investissement Québec to carry on its business outside the information technology development centre, the new economy centre or the biotechnology development centre that is mentioned in the certificate referred to in paragraph a of section 771.12, if, during that day, none of the activities of its business are carried on in Québec.

For the purposes of the definition of “oil refining corporation” in the first paragraph, the following rules apply for the purpose of determining whether a corporation is associated with a partnership or a trust at any time:

(a)  a partnership is deemed to be a corporation the taxation year of which corresponds to its fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the proportion that the member’s share of the income or loss of the partnership for its fiscal period that includes that time is of the income or loss of the partnership for that fiscal period, on the assumption that, if the income and loss of the partnership for that fiscal period are nil, the partnership’s income for that fiscal period is equal to $1,000,000; and

(b)  a trust is deemed to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this subparagraph b referred to as the “distribution date”), and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  if any such beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, are owned at that time by the beneficiary, and

(2)  if subparagraph 1 does not apply and if that time occurs before the distribution date, are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom a property of the trust or a property for which it was substituted was directly or indirectly received.

1981, c. 12, s. 9; 1987, c. 21, s. 28; 1989, c. 5, s. 118; 1992, c. 1, s. 66; 1995, c. 63, s. 68; 1997, c. 3, s. 71; 1997, c. 85, s. 153; 1998, c. 17, s. 64; 1999, c. 83, s. 102; 2000, c. 39, s. 76; 2001, c. 51, s. 72; 2001, c. 69, s. 12; 2002, c. 9, s. 20; 2003, c. 9, s. 98; 2004, c. 21, s. 201; 2005, c. 23, s. 103; 2005, c. 38, s. 172; 2007, c. 12, s. 86; 2009, c. 5, s. 312.

2007-11-07

771.1. In this Title,

“biotechnology development centre” means a building designated as such by Investissement Québec;

“eligibility date” of a corporation means

(a)  where the corporation carries on or may carry on its business in an information technology development centre, 26 March 1997;

(b)  where the corporation carries on or may carry on its business in a new economy centre, 10 March 1999; and

(c)  where the corporation carries on or may carry on its business in a biotechnology development centre, 30 March 2001;

“eligibility period” of a corporation means the five-year period that begins on the day of coming into force of the certificate referred to in paragraph a of section 771.12 that was issued in its respect or, if it is later, on the corporation’s eligibility date, unless the corporation ceases to be an exempt corporation,

(a)  at the beginning of a particular taxation year following an acquisition of control referred to in subparagraph f of the first paragraph of section 771.13 that occurred in the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends immediately before the acquisition of control;

(b)  at the beginning of a particular taxation year following an election by the corporation under subparagraph g of the first paragraph of section 771.13 to become a specified corporation from a particular day of the preceding taxation year and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends the day before that particular day; or

(c)  in a particular taxation year, other than the one referred to in paragraph a or b, and before the end of the five-year period, in which case “eligibility period” means the part of the five-year period that ends on the last day of the taxation year preceding the particular year;

“eligible business”, in relation to any business carried on by a corporation, means any business carried on by a corporation other than a specified investment business or a personal services business and includes, except for the purposes of subparagraph a of the second paragraph of section 771.6, subparagraph d of the first paragraph of section 771.8.3 and subparagraph i of subparagraph c of the second paragraph of section 771.8.5, an adventure or concern in the nature of trade;

“exempt corporation” has the meaning assigned by sections 771.12 and 771.13;

“exemption period” of a corporation means the period that begins at the beginning of the corporation’s first taxation year and ends on the earlier of

(a)  the last day of the five-year period that begins at the beginning of the corporation’s first taxation year, and

(b)  the last day of the taxation year preceding the taxation year in which the corporation ceases to be a qualified corporation;

“information technology development centre” means a building designated as such by the Minister of Finance;

“new economy centre” means one or more buildings within the same region that are designated by Investissement Québec as constituting a marketplace for the new economy;

“qualified corporation” has the meaning assigned by sections 771.5 to 771.7;

“specified corporation” has the meaning assigned by section 1029.8.36.0.17;

“specified investment business” carried on by a corporation in a taxation year means a business, other than a business carried on by a savings and credit union or a business of leasing property other than immovable property, the principal purpose of which is to derive income from property, including interest, dividends, rents or royalties, unless the corporation employs in the business throughout the year more than five full-time employees, or in the course of carrying on an eligible business, any other corporation associated with it provides financial, administrative, maintenance, managerial or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than five full-time employees if those services had not been provided;

“specified partnership income” of a corporation for a taxation year means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the lesser of

i.  the aggregate of all amounts each of which is an amount, in respect of an eligible business carried on in Canada by the corporation as a member of the partnership, equal to the amount by which the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period of the business that ends in the year, exceeds the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from the business, other than an amount that was deducted by the partnership in computing its income from the business, and

ii.  the proportion of the lesser of $400,000 and the product obtained by multiplying $1,096 by the number of days included in a fiscal period of the partnership that ends in the year that the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from an eligible business carried on in Canada for a fiscal period that ends in the year is of the aggregate of all amounts each of which is the partnership’s income for a fiscal period referred to in subparagraph i from an eligible business carried on in Canada; and

(b)  the lesser of

i.  the aggregate of the amounts determined in respect of the corporation for the year under subparagraphs i and ii of paragraph a of section 771.2.1.2, and

ii.  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the amount by which the amount determined in respect of the partnership for the year under subparagraph i of paragraph a exceeds the amount determined in respect of the partnership for the year under subparagraph ii of that paragraph;

“specified partnership loss” of a corporation for a taxation year means the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the aggregate of

(a)  the aggregate of all amounts each of which is the corporation’s share of the loss, determined in accordance with Title XI of Book III, of the partnership for a fiscal period that ends in the year from an eligible business carried on in Canada by the corporation as a member of the partnership; and

(b)  the aggregate of all amounts each of which is the amount by which the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from an eligible business carried on in Canada by the corporation as a member of the partnership, other than an amount that was deducted by the partnership in computing its income from the business, exceeds the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period that ends in the year.

For the purposes of the definition of “information technology development centre” in the first paragraph, premises designated Investissement Québec are deemed to be part of a building referred to in that definition.

For the purposes of the definition of “new economy centre” in the first paragraph, premises designated by Investissement Québec are deemed to form part of a building referred to in that definition.

Despite the definition of “eligibility period” in the first paragraph, the eligibility period of a corporation does not include any day in a taxation year for which the corporation is authorized by Investissement Québec to carry on its business outside the information technology development centre, the new economy centre or the biotechnology development centre that is mentioned in the certificate referred to in paragraph a of section 771.12, if, during that day, none of the activities of its business are carried on in Québec.

1981, c. 12, s. 9; 1987, c. 21, s. 28; 1989, c. 5, s. 118; 1992, c. 1, s. 66; 1995, c. 63, s. 68; 1997, c. 3, s. 71; 1997, c. 85, s. 153; 1998, c. 17, s. 64; 1999, c. 83, s. 102; 2000, c. 39, s. 76; 2001, c. 51, s. 72; 2001, c. 69, s. 12; 2002, c. 9, s. 20; 2003, c. 9, s. 98; 2004, c. 21, s. 201; 2005, c. 23, s. 103; 2005, c. 38, s. 172; 2007, c. 12, s. 86.

2006-03-01

771.1. In this Title,

“biotechnology development centre” means a building designated as such by the Minister of Finance;

“eligibility date” of a corporation means

(a)  where the corporation carries on or may carry on its business in an information technology development centre, 26 March 1997;

(b)  where the corporation carries on or may carry on its business in a new economy centre, 10 March 1999; and

(c)  where the corporation carries on or may carry on its business in a biotechnology development centre, 30 March 2001;

“eligibility period” of a corporation means the five-year period that begins on the later of the day of coming into force of the certificate referred to in paragraph a of section 771.12 that was issued in its respect and the corporation’s eligibility date, except where the corporation ceases, in a particular taxation year and before the end of the five-year period, to be an exempt corporation, in which case the expression means the portion of that period that ends on the last day of the taxation year preceding the particular year;

“eligible business”, in relation to any business carried on by a corporation, means any business carried on by a corporation other than a specified investment business or a personal services business and includes, except for the purposes of subparagraph a of the second paragraph of section 771.6, subparagraph d of the first paragraph of section 771.8.3 and subparagraph i of subparagraph c of the second paragraph of section 771.8.5, an adventure or concern in the nature of trade;

“exempt corporation” has the meaning assigned by sections 771.12 and 771.13;

“exemption period” of a corporation means the period that begins at the beginning of the corporation’s first taxation year and ends on the earlier of

(a)  the last day of the five-year period that begins at the beginning of the corporation’s first taxation year, and

(b)  the last day of the taxation year preceding the taxation year in which the corporation ceases to be a qualified corporation;

“information technology development centre” means a building designated as such by the Minister of Finance;

“new economy centre” means one or more buildings within the same region that are designated by Investissement Québec as constituting a marketplace for the new economy;

“qualified corporation” has the meaning assigned by sections 771.5 to 771.7;

“specified investment business” carried on by a corporation in a taxation year means a business, other than a business carried on by a savings and credit union or a business of leasing property other than immovable property, the principal purpose of which is to derive income from property, including interest, dividends, rents or royalties, unless the corporation employs in the business throughout the year more than five full-time employees, or in the course of carrying on an eligible business, any other corporation associated with it provides financial, administrative, maintenance, managerial or other similar services to the corporation in the year and the corporation could reasonably be expected to require more than five full-time employees if those services had not been provided;

“specified partnership income” of a corporation for a taxation year means the aggregate of

(a)  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the lesser of

i.  the aggregate of all amounts each of which is an amount, in respect of an eligible business carried on in Canada by the corporation as a member of the partnership, equal to the amount by which the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period of the business that ends in the year, exceeds the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from the business, other than an amount that was deducted by the partnership in computing its income from the business, and

ii.  the proportion of the lesser of $400,000 and the product obtained by multiplying $1,096 by the number of days included in a fiscal period of the partnership that ends in the year that the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from an eligible business carried on in Canada for a fiscal period that ends in the year is of the aggregate of all amounts each of which is the partnership’s income for a fiscal period referred to in subparagraph i from an eligible business carried on in Canada; and

(b)  the lesser of

i.  the aggregate of the amounts determined in respect of the corporation for the year under subparagraphs i and ii of paragraph a of section 771.2.1.2, and

ii.  the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the amount by which the amount determined in respect of the partnership for the year under subparagraph i of paragraph a exceeds the amount determined in respect of the partnership for the year under subparagraph ii of that paragraph;

“specified partnership loss” of a corporation for a taxation year means the aggregate of all amounts each of which is an amount, in respect of a partnership of which the corporation is a member in the year, equal to the aggregate of

(a)  the aggregate of all amounts each of which is the corporation’s share of the loss, determined in accordance with Title XI of Book III, of the partnership for a fiscal period that ends in the year from an eligible business carried on in Canada by the corporation as a member of the partnership; and

(b)  the aggregate of all amounts each of which is the amount by which the aggregate of all amounts each of which is an amount deducted in computing the corporation’s income for the year from an eligible business carried on in Canada by the corporation as a member of the partnership, other than an amount that was deducted by the partnership in computing its income from the business, exceeds the aggregate of all amounts each of which is the corporation’s share of the income, determined in accordance with Title XI of Book III, of the partnership from the business for a fiscal period that ends in the year.

For the purposes of the definition of “information technology development centre” in the first paragraph, premises designated Investissement Québec are deemed to be part of a building referred to in that definition.

For the purposes of the definition of “new economy centre” in the first paragraph, premises designated by Investissement Québec are deemed to form part of a building referred to in that definition.

1981, c. 12, s. 9; 1987, c. 21, s. 28; 1989, c. 5, s. 118; 1992, c. 1, s. 66; 1995, c. 63, s. 68; 1997, c. 3, s. 71; 1997, c. 85, s. 153; 1998, c. 17, s. 64; 1999, c. 83, s. 102; 2000, c. 39, s. 76; 2001, c. 51, s. 72; 2001, c. 69, s. 12; 2002, c. 9, s. 20; 2003, c. 9, s. 98; 2004, c. 21, s. 201; 2005, c. 23, s. 103; 2005, c. 38, s. 172.