Application of the specific tax on lodging in the Abitibi- Témiscamingue tourist region and extension of the deadline for certain fiscal measures This information bulletin is to make public the application of the specific tax on lodging of $2 per overnight stay in the Abitibi-Témiscamingue tourist region. The specific tax will apply in this region as of July 1, 2004, pursuant to a request submitted by the Association touristique régionale de l Abitibi-Témiscamingue. This information bulletin also extends the deadline for the application of the rules relating to tax withholding at source regarding amounts from an RRSP or RRIF and streamlines the application details. Lastly, it extends the deadline for the application of the measure simplifying the tax on insurance premiums regarding a mixed contract. For information regarding the matters dealt with in this information bulletin, contact the Secteur du droit fiscal et de la fiscalité at (418) 691-2236. The French and English versions of this bulletin are available on the ministère des Finances website at : www.finances.gouv.qc.ca Paper copies are also available, on request, from the Direction des communications, at (418) 528-9323.
Application of the specific tax on lodging in the Abitibi- Témiscamingue tourist region The government has set up a tourist partnership fund to strengthen and sustain tourist promotion and development in Québec. The fund is financed in part by a specific tax on lodging of $2 per overnight stay which, since April 1, 1997, can be applied to each sleeping-accommodation unit rented in a sleeping-accommodation establishment located in a Québec tourist region which requests the government accordingly through its regional tourist association (RTA). The revenue generated by this tax, after deducting the costs of its administration, are remitted to the participating regions and the amounts thus remitted are used in accordance with the terms and conditions agreed to in a memorandum of understanding between Tourisme Québec and the RTAs of these participating regions. Currently, the tax is applicable in thirteen of the twenty Québec tourist regions, namely Montréal, Laval, Québec, Charlevoix, Outaouais, Saguenay Lac-Saint-Jean, Cantons-de-l Est, Chaudière- Appalaches, Centre-du-Québec, Gaspésie, Bas-Saint-Laurent, Lanaudière and Mauricie tourist regions. Following requests submitted by the RTA of Abitibi-Témiscamingue, the specific tax on lodging will also apply in the Abitibi-Témiscamingue tourist region as of July 1, 2004. Accordingly, the tax will be applicable regarding any sleeping-accommodation unit rented in a sleeping-accommodation establishment located in the Abitibi-Témiscamingue tourist region, when the sleeping-accommodation unit is billed by the operator of the establishment after June 30, 2004 for occupation after that date. However, the operator of a sleeping-accommodation establishment will not have to pre-collect the tax in respect of sleeping-accommodation units billed to a travel intermediary when the price of these units has been set under an agreement reached before July 1, 2004 between the operator of the establishment and the travel intermediary, and occupation by tourist customers takes place between June 30, 2004 and April 1, 2005. The territorial entities included in the Abitibi-Témiscamingue tourist region are listed in the appendix. 2
Streamlining of the rules relating to tax withholding at source regarding amounts from an RRSP or RRIF On December 12, 2003, it was announced that in order to standardize the applicable rules regarding source withholdings in respect of amounts that may be paid to an annuitant of a registered retirement savings plan (RRSP) or a registered retirement income fund (RRIF) and to better distribute the tax burden of retired persons, changes would be made to the tax regulations to stipulate in particular that a tax withholding at source must be made, as of July 1, 2004, regarding periodic annuity payments from an RRSP and from payments relating to the minimum amount of a RRIF 1. More specifically, it was announced that any person who, after June 30, 2004, either pays a benefit, other than an excluded amount, 2 to the annuitant of an RRSP or a new recognized plan, 3 or makes a payment, other than an excluded payment, 4 to the annuitant of a RRIF must withhold at source an amount equal to 8%, 16% or 20% of the amount paid depending, respectively, on whether the amount determined for the year regarding the annuitant at the time of the payment does not exceed $1 000, exceeds $1 000 but not $5 000 or exceeds $5 000. To reflect the progressive nature of the tax system, it was specified that the amount determined for the year regarding an annuitant at any time would mean the total determined without taking into account the excluded amounts or payments made or to be made during the year of all the pre-established amounts to be paid to the annuitant during the year (i.e. periodic annuity payments from an RRSP or from a new recognized plan or the payments relating to the minimum amount of a RRIF, as the case may be) and the other benefits or payments made to the annuitant under the plan or the fund, as the case may be, at that time and before then during the year. Since the announcement of these changes, many financial institutions have advised the ministère des Finances of the information systems problems they are experiencing in establishing the amount determined for the year regarding an annuitant at any time. Accordingly, the rules announced on December 12, 2003 relating to tax withholdings at source regarding benefits from an RRSP or a new recognized plan and payments from a RRIF will be streamlined. More specifically, any person who, at any time of a given taxation year, either pays a benefit, other than an excluded amount, to the annuitant of an RRSP or a new recognized plan, or makes a payment, other than an excluded payment, to the annuitant of a RRIF must withhold at source an amount equal to 16% of the amount paid. 1 Information Bulletin 2003-7. 2 Briefly, excluded amounts of an RRSP are amounts that are transferred directly to another registered plan, amounts reasonably considered as eligible for the deduction for a refund received for undeducted contributions previously made to an RRSP, an eligible withdrawal made under the Home Buyers' Plan (HBP) and an eligible withdrawal made under the Lifelong Learning Plan (LLP). 3 A new plan to which section 914 of the Taxation Act applied before May 26, 1976. 4 Essentially, a payment excluded from a RRIF is a payment transferred directly to another registered plan. 3
These new rules will apply to an amount paid, after December 31, 2004, as a benefit from an RRSP, a benefit from a new recognized plan or a payment from a RRIF, to a person who, at the time of the payment, is the annuitant of the RRSP, of the new recognized plan or of the RRIF, as the case may be. For greater clarity, the rules announced on December 12, 2003 relating to tax withholdings at source regarding benefits from an RRSP or from a new recognized plan and payments from a RRIF will not be incorporated into the tax regulations. Extension of the deadline for the application of the measure simplifying the taxation of insurance premiums regarding a combined contract The March 30, 2004 Budget Speech introduced four measures to simplify the administration of the taxation of insurance premiums for companies in this sector. One of these measures stipulates that, as of June 1, 2004, the presumption that the individual insurance of persons which is incidental in a combined contract is damage insurance will be eliminated. It appears that the application of this measure as of June 1, 2004 would pose problems for certain insurers in the automobile insurance sector, as they would have to incur substantial costs if the changes required to their computer systems must be made before that date. Accordingly, to prevent this simplification measure from giving rise to such costs for these insurers, its application deadline will be extended, so that it will apply in respect of combined insurance contracts concluded after February 28, 2005. 4
APPENDIX ABITIBI-TÉMISCAMINGUE TOURISM REGION Geographic code Amos 88055 Angliers 85080 Authier 87050 Authier-Nord 87100 Barraute 88022 Béarn 85020 Belcourt 89050 Belleterre 85065 Berry 88070 Champneuf 88005 Chazel 87095 Clermont 87110 Clerval 87075 Duhamel-Ouest 85030 Duparquet 87005 Dupuy 87085 Fugèreville 85055 Gallichan 87020 Guérin 85095 Kebaowek 85802 Kipawa 85010 La Corne 88030 La Morandière 88015 La Motte 88045 La Reine 87080 La Sarre 87090 Lac-Chicobi 88904 Lac-Despinassy 88902 5
ABITIBI-TÉMISCAMINGUE TOURISM REGION Geographic code Lac-Duparquet 87902 Lac-Fouillac 89914 Lac-Granet 89912 Lac-Metei 89908 Lac-Simon 89804 Laforce 85070 Landrienne 88035 Latulipe-et-Gaboury 85060 Launay 88080 Laverlochère 85050 Lorrainville 85037 Macamic 87058 Malartic 89015 Matchi-Manitou 89902 Moffet 85075 Nédélec 85100 Normétal 87115 Notre-Dame-du-Nord 85090 Palmarolle 87025 Pikogan 88802 Poularies 87035 Preissac 88090 Rapide-Danseur 87010 Rémigny 85105 Réservoir-Dozois 89910 Rivière-Héva 89010 Rivière-Kipawa 85902 Rivière-Ojima 87904 Rochebaucourt 88010 Roquemaure 87015 6
ABITIBI-TÉMISCAMINGUE TOURISM REGION Geographic code Rouyn-Noranda 86042 Saint-Bruno-de-Guigues 85045 Saint-Dominique-du-Rosaire 88065 Saint-Édouard-de-Fabre 85015 Sainte-Germaine-Boulé 87030 Sainte-Gertrude-Manneville 88085 Sainte-Hélène-de-Mancebourg 87070 Saint-Eugène-de-Guigues 85085 Saint-Félix-de-Dalquier 88060 Saint-Lambert 87120 Saint-Marc-de-Figuery 88040 Saint-Mathieu-d Harricana 88050 Senneterre 89040 Senneterre 89045 Taschereau 87042 Témiscaming 85005 Timiskaming 85806 Trécesson 88075 Val-d Or 89008 Val-Saint-Gilles 87105 Ville-Marie 85025 7