Quebec agrees to parallel some recent federal tax measures
Quebec announced new harmonization measures in Information Bulletin 2019-7. The tax measures in this nine-page bulletin will align several Quebec tax measures with recently proposed federal government tax legislation, most notably measures that were announced in the 2019 federal budget.
When implementing measures relating to the federal budget, the bulletin states that the changes to the Quebec tax system will only be adopted following assent to any federal statute (or adoption of any federal regulation) implementing the proposed federal measure being harmonized. Further, the bulletin states that these changes will apply on the same dates as the federal measures being harmonized.
Measures harmonizing with the 2019 federal budget
Corporate income tax measures
Personal income tax measures
Quebec will harmonize with various personal tax measures proposed in the 2019 federal budget, including measures to:
QST harmonization measures
Quebec will harmonize with various federal GST/HST measures proposed in draft legislation released on May 17, 2019. These changes to the QST system will:
Quebec says it is studying the federal measure to extend the GST/HST holding corporation rules to holding partnerships and trusts, and will announce any harmonization decisions on this measure at a later date.
For more information on the federal draft legislation, see TaxNewsFlash-Canada 2019-24 "Holding Companies - Prepare for GST/HST Rules".
Other harmonization measures
Quebec will also amend its legislation regarding the rate used to calculate the taxable benefit relating to standby charges in connection with the personal use of an employer-provided automobile. Currently, the standby charge is computed as 2% of the cost of the vehicle each month. If the individual is employed principally in selling or leasing vehicles, then a reduced rate of 1.5% is available. Beginning in the 2020 taxation year, the reduced rate of 1.5% will not be available to individuals who are also shareholders of the corporation.
Federal measures not adopted by Quebec
Quebec will not harmonize with certain 2019 budget measures, including measures related to:
Finally, Quebec says it will announce on a later date whether it intends to harmonize with federal 2019 budget measures to:
For more information, contact your KPMG adviser.
Information is current to June 25, 2019. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500