Quebec Budget Lowers Corporate Taxes

The Quebec provincial budget was presented on March 26, 2015. 

The budget contained a number of tax changes for individuals and businesses, most notably a reduction in the general corporate tax rate over the next few years.  By limiting spending, the Quebec government is projecting a slight surplus for the 2015-2016 fiscal year.

Personal Tax Changes

Health Contribution  - the current health contribution, which can be as high as $1,000 per year for higher-income taxpayers will be reduced in 2017 and again in 2018 with an elimination of the contribution as of 2019.

Tax Credit for Experienced Workers - the current credit available to taxpayers who earn work income after age 64 will be increased over the years 2016 to 2018 and available to 64 year olds in 2017 and 63 year olds in 2018.

Tax Shield – a new refundable credit will be available to low-income working families beginning in 2016.

Age Credit – the age of eligibility for the provincial age credit will be increased annually from 65 in 2015 to 70 by 2020.

Solidarity Tax Credit – confirmation of housing costs will required to obtain the Solidarity Tax Credit after June 2016.

Credit for Seniors who pay municipal taxes – a new credit will be available for 2016 and subsequent years to offset property taxes for seniors who are long-time homeowners.

Business Tax Changes

Corporate Tax Rates - The current 11.9% general corporate tax rate will be reduced by 0.1% per year for years 2017 to 2020 leading to a rate of 11.5%.

Small Business Tax Rates – some of the rules regarding who may claim the small business rate will be changing as of January 1, 2017.

Health Contribution – the employer’s contribution to health services will be reduced in 2017, 2018, and 2019 for small to medium sized businesses.

Investment Credits for Manufacturing Equipment – credit rates are being reduced for investments after December 31, 2016.

Tax Credit for On-The-Job Training – credits are being increased for expenses incurred to provide on-the-job training.

Other Provisions – the budget also includes changes to several other credits available to business

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