Update on Québec's Economic and Financial Situation
1.3
INFORMATION BULLETIN
November 7, 2023
Amendments to ease certain conditions for claiming
the tax credit
☐ Amendment to the definition of "specified expenses"
2023-6
In order for a qualified corporation to benefit from the tax credit relating to investment and
innovation for a taxation year, the specified expenses it has incurred in respect of a specified
property must have been paid when claiming this tax credit.
Briefly, under the definition of "specified expenses", 15 for the purposes of the tax credit relating to
investment and innovation, expenses incurred by a qualified corporation in a taxation year and
paid no later than the last day of the 18-month period following the end of such taxation year are
specified expenses of the corporation for the year in which they were incurred if they satisfy the
other conditions set out in the Taxation Act. If they are paid more than 18 months after the end of
the taxation year in which they were incurred, then they are specified expenses of the corporation
for the taxation year in which they were paid.
Accordingly, when specified expenses are incurred in a particular taxation year and paid after the
end of the particular year, but no later than the last day of the 18-month period following the end
of the particular year, the tax credit relating to these expenses must be claimed in respect of the
particular year, that is, the year in which they were incurred.
In order to ease the conditions for claiming the tax credit relating to investment and innovation,
the definition of “specified expenses" will be amended to provide that a qualified corporation may
also claim this tax credit in respect of the taxation year in which the specified expenses are paid
when they are paid after the end of the taxation year in which they were incurred, but no later than
the end of the 18-month period following the end of such taxation year.
More specifically, expenses incurred by a qualified corporation in a particular taxation year, or in
a previous taxation year for which the corporation was a qualified corporation, for the acquisition
of a specified property, that are included at the end of the particular year or at the end of the
previous taxation year, as the case may be, in the capital cost of the property and that are paid
after the end of the particular year or the previous year, as the case may be, but no later
than 18 months after the end of the particular year, will be specified expenses of the corporation
for the particular year, unless the corporation has claimed the tax credit relating to investment and
innovation in respect of such expenses for a taxation year prior to the particular year,
if they
otherwise satisfy the other applicable conditions.
An equivalent amendment will be made to the definition of “specified expenses" in respect of
expenses incurred by a qualified partnership, with the necessary adaptations.
15
See note 8.
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