Canada: Tax measures in 2021 budget enacted (Quebec)

Bill 5 received Royal Assent on 10 December 2021.

Bill 5 received Royal Assent on 10 December 2021.

Legislation in Quebec—Bill 5—received Royal Assent on 10 December 2021.

The bill includes tax measures to:

  • Decrease the small business income tax rate to 3.2% (from 4%) by increasing the small business deduction, effective after 25 March 2021
  • Introduce an option for computing remunerated hours for the purposes of the small business deduction, effective for tax years ending after 30 June 2020 and before 1 July 2021
  • Temporarily enhance the refundable tax credit for on-the-job training periods
  • Temporarily enhance the investment and innovation tax credit (C3i)
  • Enhance the “tax holiday” for large investment projects
  • Add restrictions to certain tax incentives
  • Add temporary discretionary powers for the administration of certain tax incentives
  • Extend the employer contribution credit to the health services fund for employees on paid leave relating to COVID-19 until 28 August 2021
  • Change the Quebec rules for certain intergenerational transfers following recent federal changes
  • Decrease the provincial non-eligible dividend tax credit to 3.42% (from 4.01%) effective 2022

Read a December 2021 report prepared by the KPMG member firm in Canada


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