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14 04 2017

2017 Quebec & Federal Budgets – Our Top 5 Measures

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Quebec1. Health Contribution eliminated retroactively to 2016 for individuals earning less than $134,095

The health contribution will be eliminated retroactively, as of 2016, for all adults whose income for that year does not exceed $134,095.

Adults whose income for 2016 was greater than $134,095, other than exempt individuals, must pay for that year a health contribution equal to the lesser of $1,000 or 4% of the amount by which their income for the year exceeds $134,095.

Revenu Québec will be responsible for cancelling or recalculating the amount for 2016.

A new notice of assessment for 2016 will be sent, not later than June 30, 2017, to all taxpayers in respect of whom Revenu Québec has already determined, on the date of the Quebec Budget speech, the amount of the health contribution payable for the year.

Quebec2. Extension to March 31, 2018 of the eligibility period under the RénoVert Tax Credit

The period during which a renovation agreement may be entered into with a qualified contractor for the purposes of the RénoVert tax credit will be extended by one year, to March 31, 2018 and all expenses will have to be paid before January 1, 2019.

Renovation agreements entered into after March 31, 2017 and before April 1, 2018 may relate to all eco-friendly renovation work currently recognized for the purposes of the RénoVert tax credit, with the exception of the construction, renovation, modification or rebuilding of a system for the discharge, collection and disposal of waste water, toilet effluents or grey water, since a new refundable tax credit will apply to such work as of April 1, 2017.

Canada3. Change in definition for GST/HST purposes of a Taxi business to include ride-sharing services (i.e. Uber), effective July 1, 2017

To ensure that the GST/HST applies consistently to taxi services and ride-sharing services, the Federal Budget proposes to amend the definition of a taxi business to require providers of ride-sharing services to register for the GST/HST and charge tax on their fares in the same manner as taxi operators.

These changes will only apply to transportation that is supplied in the course of a commercial activity. These changes will not apply to a school transportation service for elementary or secondary students or a sightseeing service.

The amendment will be effective as of July 1, 2017.

Canada4. Billed-basis accounting for professionals in order to defer taxation of work in progress eliminated for taxation years beginning after March 22, 2017

The Federal Budget proposes to eliminate the ability for designated professionals (dentists, accountants, lawyers, doctors, chiropractors, and veterinarians) to elect to use billed-basis accounting to defer the taxation of their work in progress.

This measure will apply to taxation years that begin on or after March 22, 2017.

To mitigate the effect on taxpayers, a transitional period will be provided to phase in the inclusion of work in progress into income.

For the first taxation year that begins on or after March 22, 2017, 50 per cent of the lesser of the cost and the fair market value of work in progress will be taken into account for the purposes of determining the value of inventory held by the business under the Income Tax Act.

For the second, and each successive, taxation year that begins on or after March 22, 2017, the full amount of the lesser of the cost and the fair market value of work in progress will be taken into account for the purposes of valuing inventory.

Canada5. Public transit tax credit eliminated, effective July 1, 2017

The Federal Budget proposes that the public transit tax credit be eliminated, effective as of July 1, 2017.

Specifically, the cost of public transit passes and electronic fare cards attributable to public transit use that occurs after June 2017 will no longer be eligible for the credit.

 

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