TAX CREDIT PROGRAMS FOR INTERNATIONAL FINANCIAL CENTRES SUMMARY OF THE PROGRAMS

Transcription

1 TAX CREDIT PROGRAMS FOR INTERNATIONAL FINANCIAL CENTRES SUMMARY OF THE PROGRAMS OCTOBER 2015

2 TAX CREDIT PROGRAMS FOR INTERNATIONAL FINANCIAL CENTRES (IFCs) ELIGIBILITY CRITERIA Eligible activities A crpratin may be eligible if its activities fcus n at least ne f the 25 categries f qualified internatinal financial transactins (QIFTs) and if it satisfies the ther cnditins stipulated in the legislatin gverning internatinal financial centres. Generally speaking, QIFTs must be carried ut n behalf f: a custmer that des nt reside in Canada; r a custmer that des reside in Canada, in which case the QIFT must fcus n freign expsure financial prducts. T btain the list f QIFTs and additinal infrmatin n eligibility cnditins specific t each ne, please cnsult sectins 7 and 8 f the Act respecting internatinal financial centres (CQLR, chapter C-8.3) n the Ministère des Finances website. Other cnditins Pursuant t prvisins in the legislatin gverning internatinal financial centres, an IFC refers t a business r part f a business that satisfies the fllwing cnditins: it is perated by a crpratin; 1 it emplys, at all times, a minimum f six eligible full-time emplyees; 2 T apply this criterin, the expressin eligible emplyees includes lcal emplyees and freign specialists wh hld a qualificatin certificate issued by the Minister f Finance. all f its activities fcus n QIFTs; the activities enabling the QIFTs effected in the curse f its peratins t be carried ut must be managed entirely within the territry f the urban agglmeratin f Mntréal; its activities are gruped tgether in ne place within the territry f the urban agglmeratin f Mntréal; it hlds an annual certificate fr itself and its eligible emplyees issued by the Minister. 1 General partnerships are ineligible fr the prgram. 2 The expressin full-time means a minimum f 26 hurs f wrk per week, fr a stipulated minimum f 40 weeks. Summary f the Tax Credit Prgrams fr IFCs (Octber 2015) 2 f 5

3 Eligible emplyees Lcal emplyees fr the purpses f calculating the tax credit T be eligible, a lcal emplyee must hld a full-time jb at least 75% f whse duties with the IFC are devted t the executin f qualified internatinal financial transactins (QIFTs). The duties f an emplyee are devted t the executin f QIFTs when they are directly attributable t the specific transactinal prcess f a given QIFT. Fr greater clarity, the expressin full-time means a minimum f 26 hurs f wrk per week, fr a stipulated minimum f 40 weeks. Freign specialist emplyees fr the purpses f btaining f a persnal tax benefit Generally speaking, a freign specialist emplyee is eligible where at least 75% f his duties with the IFC are devted t the peratins f the IFC. An IFC peratr that wishes t have a freign specialist emplyee benefit frm this measure must first apply t the Minister f Finance t have a freign specialist qualificatin certificate issued fr the emplyee. CHARACTERISTICS OF THE TAX ASSISTANCE Nature f the assistance The tax assistance ffered may be in ne, r a cmbinatin, f the fllwing frms, as applicable: A crpratin that carries n back ffice activities n behalf f a third party (QIFT 7.22) and that hlds an IFC certificate and a valid annual certificate can claim, fr a taxatin year, a refundable tax credit (RTC) representing 24% f qualified wages incurred fr the year in respect f its eligible lcal emplyees assigned t thse activities, t a maximum annual amunt f $ per emplyee. A crpratin that carries n activities ther than back ffice activities n behalf f a third party (24 ther categries f QIFTs) and that hlds an IFC certificate and a valid annual certificate can claim, fr a taxatin year, a nn-refundable tax credit (NRTC) representing 24% f qualified wages incurred fr the year in respect f its eligible lcal emplyees assigned t thse activities, t a maximum annual amunt f $ per emplyee. A freign specialist emplyee wh wrks at an IFC can claim, fr a cntinuus perid f five years, a deductin in calculating all f his taxable incme at an annual rate that varies as fllws: 100% the first tw years and 75%, 50%, and 37.5% respectively fr subsequent three years. Eligible salaries fr the purpses f calculating the tax credit The eligible salary fr a taxatin year refers t the salary calculated accrding t the Taxatin Act (CQLR, chapter I-3) and paid in the year t eligible lcal emplyees. The eligible salary f a lcal emplyee is limited t $66 667, calculated annually, i.e. accrding t the number f days in the eligible crpratin s taxatin year in which the emplyee qualified as an eligible lcal emplyee. Summary f the Tax Credit Prgrams fr IFCs (Octber 2015) 3 f 5

4 Eligibility perid and duratin The tax credit prgrams fr IFCs are unlimited in duratin. The eligibility perid f a freign specialist emplyee fr a persnal tax benefit is five years. PROCEDURE Qualificatin certificate prcess T be entitled t the refundable tax credit r the nn-refundable tax credit, a crpratin that intends t perate an IFC must first btain a qualificatin certificate frm the Minister f Finance fr the IFC it intends t perate, n the ne hand, and fr its eligible emplyees, n the ther. The applicatin fr qualificatin certificate is nly made nce. Annual certificate prcess Subsequently, t receive the refundable tax credit r the nn-refundable tax credit fr a taxatin year, a crpratin must enclse with its tax return 3 the frm and dcuments prescribed fr that purpse by Revenu Québec, a cpy f the annual certificate issued by the Minister f Finance in respect f the activities f the IFC, as well as a cpy f the annual certificate issued regarding the eligible emplyees f the IFC in respect f whm it is claiming the tax credit. T btain the certificates fr a given taxatin year, the crpratin must submit an applicatin t the Ministère des Finances as sn as pssible after the end f the crpratin s taxatin year. FEES Examinatin f an applicatin Fees are payable fr the examinatin f applicatins received under the tax credit prgrams fr IFCs. The fees are payable t the Minister f Finance in a single instalment n the date n which the applicatin is submitted. T find ut abut the fees applicable t different types f applicatins, please cnsult the fee schedule n the Ministère des Finances website. Annual cntributin The annual cntributin payable by a crpratin that hlds an IFC certificate issued by the Minister f Finance is: $ fr the first year; $3 000 fr each subsequent year. 3 If, fr any reasn, a crpratin is unable t enclse these dcuments with its tax return, it must send them t Revenu Québec n later than 12 mnths after the deadline fr filing its tax return fr the year cncerned. Summary f the Tax Credit Prgrams fr IFCs (Octber 2015) 4 f 5

5 The annual cntributins f IFCs are allcated t fund activities t prmte and develp Mntréal as an internatinal financial centre. They are payable in a single instalment t the Minister f Finance n later than the last day f February f the subsequent calendar year. SUBMISSION OF THE APPLICATION T submit an applicatin fr IFC qualificatin certificate, please cntact an advisr in the Ministère des Finances, wh can answer yur questins and guide yu thrugh the certificatin prcess fr yur business, bearing in mind yur situatin and specific needs. TO CONTACT US Ministère des Finances du Québec Gestin des mesures relatives aux CFI 380, rue Saint-Antine Ouest, bureau 6100 Mntréal (Québec) H2Y 3X7 Tel.: Fax: dpif@finances.guv.qc.ca Summary f the Tax Credit Prgrams fr IFCs (Octber 2015) 5 f 5