Update on Québec's Economic and Financial Situation
INFORMATION BULLETIN
November 7, 2023
2023-6
For a qualified corporation to be able to benefit fully from the refundability of the tax credit relating
to investment and innovation for a particular taxation year, its assets and its gross income,
applicable for the taxation year, must not exceed $50 million.
In addition, a qualified corporation cannot benefit from the refundability of this tax credit if its assets
or its gross income, applicable for the taxation year, are equal to or exceed $100 million.
To allow a qualified corporation to benefit from this tax credit, for a taxation year, regardless of its
total taxes for that taxation year, amendments will be made to remove the requirement relating to
assets as well as that relating to gross income.
The tax legislation will therefore be amended so that a qualified corporation, for a taxation year,
is able to benefit fully from the refundability of the tax credit relating to investment and innovation,
regardless of its assets or its gross income.
Application date
The amendment to broaden the application of the refundability of the tax credit will apply in respect
of specified expenses incurred in a taxation year that begins after December 31, 2023.
For greater clarity, no amendment will be made to the tax legislation in respect of the unused
portion of the tax credit relating to investment and innovation of a corporation for a previous
taxation year of the corporation.
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☐ Amendment to the calculation of the balance of the cumulative specified
expense limit
An amendment will be made to the calculation of the balance of the cumulative specified expense
limit of a qualified corporation for the purposes of the tax credit relating to investment and
innovation, so that the cumulative limit of $100 million currently calculated for a five-year period
will now be calculated for a four-year period.
The tax legislation will therefore be amended to provide that the balance of the cumulative
specified expense limit of a qualified corporation, for a particular taxation year, will be equal to the
excess of $100 million over the total of the following amounts:
the qualified corporation's specified expenses and, if the corporation is a member of an
associated group, the specified expenses of another corporation that is a member of the
associated group, in respect of which the tax credit relating to investment and innovation
could be claimed for a taxation year ended in the 36-month period preceding the beginning
of the particular year;
the share of a qualified partnership's specified expenses in respect of which the qualified
corporation or, if the qualified corporation is a member of an associated group, another
corporation that is a member of the associated group could claim the tax credit relating to
investment and innovation for a taxation year ended in the 36-month period preceding the
beginning of the particular year;
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This non-refundable portion of a previous taxation year may nevertheless be carried forward to the preceding
three taxation years and the subsequent twenty taxation years, in accordance with the rules currently applicable.
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