Share with your friends

Canada: Tax paid-up capital, dividend tax credit (Quebec)

Canada: Tax paid-up capital, dividend tax credit

Guidance (an information bulletin 2019-11) addresses the notion of tax paid-up capital and eligibility for the dividend tax credit in Quebec.


Related content

Financial statement “paid-up capital”

Current law in Quebec does not allow an amount recorded in a separate component of a corporation's equity to be deducted in the calculation of tax paid-up capital—and thus cannot offset an increase in the tax paid-up capital resulting from the accounting change.

The information bulletin announces that any provision recorded in connection with the redemption of retractable or mandatory redeemable shares will be—regardless of the accounting approach used in the presentation of a corporation's financial statements—included in the calculation of tax paid-up capital, effective for fiscal years beginning as of 1 January 2020.

Dividend tax credit

Quebec is restricting the eligibility for the dividend tax credit for dividends received or deemed received after 31 December 2019. The Quebec tax legislation would be updated so that only an individual, including a trust, who is resident in Quebec on the last day of a tax year could benefit from the dividend tax credit for that year.

Additional items addressed by the information bulletin include:

  • Federal stock option regime changes
  • Refundable tax credits
  • Lodging tax

Read a December 2019 report prepared by the KPMG member firm in Canada

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor 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 on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal