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Quebec 2018 Budget

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Quebec   ->   QC Budgets -> 2018 Budget

Quebec Budget - March 27, 2018

Full details of the budget can be found on the Finance Quebec website, with tax changes in 2018-2019 Budget Plan - Additional Information on Fiscal Measures (pdf).

All proposed changes are subject to legislative approval.

Personal Tax Changes

bulletIntroduction of a first-time home buyers' tax credit, in the amount of $5,000 multiplied by the lowest personal tax rate (currently 15%).  This will be available for qualifying homes acquired after December 31, 2017.  Further information in the additional information on fiscal measures page A.15 (link above).
bulletThe RenoVert tax credit, a temporary refundable tax credit for eco-friendly renovations, is extended to March 31, 2019.
bulletThe Tax Shield will be enhanced by raising the maximum increase in eligible work income relative to the previous year to $4,000 from $3,000, effective for the 2018 taxation year.
bulletThe experienced worker tax credit will be available to workers age 61 and over starting in 2018, and the amounts for all ages are increased by $1,000, also for 2018.
bulletThe refundable tax credit for caregivers (on Quebec website) will comprise four components starting in 2018, with the fourth component to apply to informal caregivers who, without housing or co-residing with a relative, regularly and continuously help the relative.  The new component of the tax credit will consist of $533 for each eligible relative and will be reduced based on the eligible relative's income for the year for which the tax credit is claimed.  The  amount will be reduced at a rate of 16% for each dollar of the eligible relative's income over a threshold of $23,700 (indexed annually).  Further information is available starting at page A.27 of the additional information on fiscal measures (link above).
bulletQuebec will add nurse practitioners to the list of medical practitioners authorized to issue certifications for the purposes of the tax credit for severe and prolonged impairment in physical or mental functions.
bulletThe refundable tax credit for volunteer respite provided to informal caregivers will be enhanced for 2018 by:
bulleteasing the requirement relating to the number of hours of volunteer respite services, and
bulletadjusting the maximum amount that may be attributed by an informal caregiver, based on the number of hours of volunteer respite services, and
bulletraising the annual envelope at a person's disposal, for recognition purposes, in relation to each care recipient, from $1,000 to $1,500.

Further information is available starting at page A.33 of the additional information on fiscal measures (link above)

bulletEnhancement of the refundable tax credit for the acquisition or rental of property intended to help seniors live independently longer - see page A.36 of the additional information document above.
bulletBroadening the tax credit for persons living alone, in order to encourage intergenerational cohabitation, by extending the tax credit to grandparents and great-grandparents of eligible students, for the 2018 and subsequent taxation years.
bulletEnhancement of the refundable tax credit for childcare expenses - see page A.40 of additional information document above.
bulletExtension of the tax credit for a first major cultural gift, to apply to a first major cultural gift made before January 1, 2023.
bulletThe dividend tax credit rates for both eligible and non-eligible dividends are reduced for dividends received after March 27, 2018, and are further reduced each year until 2020 for eligible dividends, and 2021 for non-eligible dividends.

Business and Other Fiscal Measures

More information on the measures below can be found in the 2018-2019 Budget Plan - Additional Information on Fiscal Measures (link above).

bulletSmall Business Deduction (SBD) - the budget announced an increase in the small business deduction rate for small and medium sized businesses (SMBs) in sectors other than the primary and manufacturing sectors.  This will reduce the small business tax rate to 7% effective for the period from March 28 to December 31, 2018, to 6% for 2019 and to 5% for 2020, and to 4% for 2021.
bulletAdditional deduction for primary and manufacturing sector SMBs will be reduced to 3% for the period beginning March 28, 2018 until December 31, 2018, to 2% for 2019 and to 1% for 2020.  It will be eliminated as of January 1, 2021.  This results in a small business corporate tax rate of 4% for each year for these SMBs.
bulletThe additional capital cost allowance (CCA) of 35% for manufacturing or processing equipment and general-purpose electronic data processing equipment will be revised to a rate of 60%.  This will apply to new property acquired after March 27, 2018 but before April 1, 2020.  A special tax may apply if the property is not used mainly in the course of carrying on a business for a period of at least 730 consecutive days after the property began to be used, or if it is not used mainly in Quebec during that period.  Property acquired before March 28, 2018 which meets the conditions for claiming the additional 35% CCA will qualify for the additional 35% for the remainder of the period applicable to the acquired property.
bulletThere are many other refundable tax credit changes - see the Additional information on Fiscal Measures starting at page A.49.

Harmonization with Federal Tax Changes

bulletQuebec legislation will be amended to incorporate the federal legislative proposals released on December 13, 2017 regarding the tax on split income.
bulletQuebec legislation will also be amended to incorporate measures regarding, among other things, international taxation which were included in the federal budget of February 27, 2018.

Quebec Sales Tax (QST) and E-Commerce

bulletThe QST system will be changed to require suppliers with no physical or significant presence in Quebec (non-resident suppliers) to register with Revenu Quebec for the purpose of collecting and remitting the QST for taxable supplies of goods and services made in Quebec to specified Quebec consumers.
bulletThe mandatory registration above will apply to a non-resident supplier if the value of the considerations for all taxable supplies made by the supplier in Quebec to persons that may reasonably be considered consumers exceeds a threshold of $30,000.
bulletThe QST mandatory registration will also apply to digital platforms that contol the key elements of transactions with specified Quebec consumers, where the value of all taxable supplies that a digital platform enables non-resident suppliers to make in Quebec to consumers exceeds a threshold of $30,000.

The above are not the only fiscal measures included in the budget.

Revised: July 09, 2018

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