ORIGINAL TEXT IN FRENCH TAX CREDIT PROGRAMS FOR IFCs Applications for a Foreign Specialist General information
1. ELIGIBILITY CONDITIONS To be eligible, a specialized employee must devote at least 75% of his duties to the operations of an IFC and, immediately prior to the conclusion of his employment contract or the commencement of employment, must not reside in Canada within the meaning of taxing statutes. Moreover, if the employee s duties focus on back office activities on behalf of a third party (QIFT 7.22), the employee must be part of the IFC s strategic personnel, as defined in the Act respecting international financial centres (CQLR, chapter C-8.3). 2. TAX BENEFIT The holder of a foreign specialist qualification certificate and an annual certificate may, as long as he satisfies the usual eligibility conditions, benefit for a continuous period of five years from a deduction in the calculation of his overall taxable income at the following variable annual rates: 100% the first two years and 75%, 50%, and 37.5% respectively for subsequent years. 3. PROCEDURE Application for foreign specialist qualification certificate An IFC operator can request that the Minister of Finance issue in respect of one of its employees the requisite qualification certificate to obtain the personal tax benefit for a foreign specialist. o The application for qualification certificate is only made once. Application for foreign specialist annual certificate To benefit from the personal deduction in a given calendar year, the employee must submit with his Québec income tax return a copy of the annual certificate that the Minister has issued in respect of the employee. The IFC operator may request that the Minister of Finance issue an annual certificate in respect of an employee who holds a foreign specialist qualification certificate 1. o The application for annual certificate in respect of the eligible employee must be made each year. The form Applications for a Foreign Specialist can be used to apply for: a qualification certificate only a qualification certificate and an annual certificate an annual certificate only The procedure to follow for each type of application is indicated below. 1 It should be noted that the IFC operator must first obtain an annual certificate in respect of the IFC for part or all of the period covered by the application for annual certificate for the foreign specialist. Tax Credit Programs for IFCs Foreign Specialist (August 2017) 2 of 6
The following table indicates the documents required and the sections of the form to be completed according to the type of application. Type of application Requisite documents Sections to be completed (form) Qualification certificate only Qualification certificate and annual certificate Annual certificate only A copy of the employment contract The employee s curriculum vitæ An organization chart The form completed and signed by the employee and the head of the IFC A copy of the employment contract The employee s curriculum vitæ An organization chart The form completed and signed by the employee and the head of the IFC The application must be submitted no later than the last day of February in the subsequent calendar year. The form completed and signed by the employee and the head of the IFC The application must be submitted no later than the last day of February in the subsequent calendar year. Sections 1, 2, 3, 4, 5, 6, 10, and 11 Sections 1, 2, 3, 4, 5, 7, 8, 9, 10, and 11 Sections 1, 2, 3, 4, 7, 8, 9, 10, and 11 To apply for a qualification certificate only Complete the form Applications for a Foreign Specialist and append to it a copy of the employment contract, the employee s curriculum vitæ and the organization chart that indicates the position of the employee in respect of whom the application for qualification certificate is being submitted. The application form and the requisite documents mentioned above must be submitted to the Ministère des Finances. Generally speaking, an IFC operator must submit an application for qualification certificate in respect of a new eligible employee during the taxation year in which the employee began employment at the IFC. The form must be completed for each employee in respect of whom an application for qualification certificate is submitted. Complete sections 1, 2, 3, 4, 5, 6, 10, and 11 of the form. o In section 1 of the form, check the box Qualification certificate of a new foreign specialist and indicate the date on which the employee began employment. o Section 10 of the form must be completed and signed by the foreign specialist employee. o Section 11 of the form must be completed and signed by the duly authorized head of the IFC. Moreover, if an IFC operator so desires, it may wait until the end of the taxation year to submit by means of a single form an application to simultaneously obtain a qualification certificate and an annual certificate in respect of the new employee. Tax Credit Programs for IFCs Foreign Specialist (August 2017) 3 of 6
To apply simultaneously for a qualification certificate and an annual certificate Complete the form Applications for a Foreign Specialist and append to it a copy of the employment contract, the employee s curriculum vitæ and the organization chart that indicates the position of the employee in respect of whom the applications are being submitted. The application form and the requisite documents mentioned above must be submitted to the Ministère des Finances no later than the last day of February in the subsequent calendar year. The form must be completed for each employee in respect of whom the applications are submitted. Complete sections 1, 2, 3, 4, 5, 7, 8, 9, and 11 of the form. o In section 1 of the form, check the box Qualification certificate of a new foreign specialist and indicate the date on which the employee began employment. o Also check the box Annual certificate of a foreign specialist Personal tax benefit and indicate the period covered. This type of certificate is usually required in respect of a foreign specialist to obtain a personal tax benefit. The period covered by this type of annual certificate usually corresponds to a calendar year, i.e. from January 1 to December 31. The period may be shorter than the calendar year if, in the course of the year, the eligible employee began employment, relinquished his duties, or performed other duties outside the IFC. Annual certificate for the purposes of calculating the tax credit The salary paid to a foreign specialist does not constitute an eligible salary for the purposes of calculating the tax credit for IFCs. Consequently, please check the box Annual certificate of a foreign specialist Tax credit for IFCs and indicate the period covered only if this type of certificate is required to satisfy the requirement for the IFC to maintain at all times a minimum of six eligible employees. The period covered by this type of annual certificate normally corresponds to the taxation year of the corporation that operates the IFC. The period may be shorter than the taxation year of the IFC if, in the course of the year, the eligible employee began employment, relinquished his duties, or performed other duties outside the IFC. o Section 10 of the form must be completed and signed by the foreign specialist employee. o Section 11 of the form must be completed and signed by the duly authorized head of the IFC. Tax Credit Programs for IFCs Foreign Specialist (August 2017) 4 of 6
To apply for an annual certificate only The form Applications for a Foreign Specialist must be submitted to the Ministère des Finances no later than the last day of February in the subsequent calendar year. The form must be completed for each employee in respect of whom an application for annual certificate is submitted. Complete sections 1, 2, 3, 4, 7, 8, 9, 10, and 11 of the form. o In Section 1, check the box Annual certificate of a foreign specialist Personal tax benefit and indicate the period covered. This type of certificate is usually required in respect of a foreign specialist to obtain a personal tax benefit. The period covered by this type of annual certificate usually corresponds to a calendar year, i.e. from January 1 to December 31. The period may be shorter than the calendar year if, in the course of the year, the eligible employee began employment, relinquished his duties, or performed other duties outside the IFC. Annual certificate for the purposes of calculating the tax credit The salary paid to a foreign specialist does not constitute an eligible salary for the purposes of calculating the tax credit for IFCs. Consequently, please check the box Annual certificate of a foreign specialist Tax credit for IFCs and indicate the period covered only if this type of certificate is required to satisfy the requirement for the IFC to maintain at all times a minimum of six eligible employees. The period covered by this type of annual certificate normally corresponds to the taxation year of the corporation that operates the IFC. The period may be shorter than the taxation year of the IFC if, in the course of the year, the eligible employee began employment, relinquished his duties, or performed other duties outside the IFC. o Section 10 of the form must be completed and signed by the foreign specialist employee. o Section 11 of the form must be completed and signed by the duly authorized head of the IFC. Tax Credit Programs for IFCs Foreign Specialist (August 2017) 5 of 6
4. FEES The IFC operator must pay the requisite fees for the application for qualification certificate, the application for annual certificate, or both, depending on what was selected in section 1 of the form in respect of each foreign specialist. Fees apply to each type of application, even if the application for qualification certificate and the application for annual certificate are submitted simultaneously. Moreover, if the application for annual certificate to obtain a personal tax benefit and the application for annual certificate for the purposes of calculating the tax credit for IFCs are submitted simultaneously, fees apply to each type of certificate. If several applications are submitted simultaneously, please enclose a single cheque payable to the Minister of Finance in the amount of the total fees due. To determine the applicable fees, please consult the fee schedule on the Ministère des Finances website. Note: The masculine form of pronouns used in this document refers without discrimination to women and men. WARNING The information in this publication is presented solely for information purposes. The Act respecting international financial centres (CQLR, chapter C-8.3) and the Act respecting the sectoral parameters of certain fiscal measures (CQLR, chapter P-5.1) present details of the measures. 000 Contact information To obtain additional information, please contact: Ministère des Finances du Québec Gestion des mesures fiscales 380, rue Saint-Antoine Ouest, bureau 6100 Montréal (Québec) H2Y 3X7 Telephone: 514 499-6569 Fax: 514 873-3915 Email: dpif@finances.gouv.qc.ca Website: www.finances.gouv.qc.ca/taxmeasures.asp Tax Credit Programs for IFCs Foreign Specialist (August 2017) 6 of 6