Online Tax Strategies, April 2018: Netflix Tax in Quebec

Effective January 1, 2019: certain non residents of Quebec in the E-commerce sector will be required to register for QST

Quebec Finance Minister Carlos J. Leitão delivered his 2018-2019 Quebec budget speech on March 27, 2018. The new measures proposed include extending the obligation to register for and collect Quebec Sales Tax (“QST”) to certain foreign suppliers in the e-commerce sector.

Currently, there are no specific rules under the QST system for online sale transactions and, accordingly, the general rules apply. As a result, non-resident suppliers who only make e-commerce sales are not required to collect QST if they do not carry on a business in Quebec.

Generally, the new measures will require these non-residents to register for and collect QST on transactions with specified Quebec designated consumers, that is, recipients who usually reside in Quebec and are QST non-registrants. The concept has commonly been called the “Netflix tax”.

The new requirement will apply to non-resident suppliers, whether or not they are located in Canada. The new measures will also apply to suppliers of digital property and service distribution platforms. The proposed measures are summarized herein.

Download the document below.

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Spring flowers may soon start blooming, but the season is also a harbinger of the time to start preparing your income tax returns. As you know, every year, the governments come out with good and not so good news. This year, will you be richer or poorer? In a two-part series, here’s an overview of what to expect.


Taxi and public transit

For Quebec purposes:

  • If you own or are a partner in a taxi permit partnership, make sure to claim the refundable tax credit for taxi owners. The maximum amount is $569. An equivalent refundable tax credit is also available if you have a taxi driver’s permit but not the taxi owner’s permit.

For federal purposes:

  • On July 1, 2017, the tax credit for public transit passes was abolished. You may however claim your transit expenses for the period from January 1, 2017 to June 30, 2017.



For Quebec purposes:

  • You can benefit from an increased income tax credit for your charitable donations if your tax rate is greater than 24%.

For federal purposes:

  • After 2017, you will no longer be able to benefit from the first-time donor’s super credit, which would allow you to obtain an additional tax credit of 25%.



For federal purposes:

  • You contributed to your RRSP in 2017 and even though your income may be less, it doesn’t mean that you have to decrease your contributions. It could be a good idea to hold on to them for a year when your income will be higher. The same strategy also applies for Quebec.
  • Do you make regular contributions to your TFSA? The maximum contribution for 2017 is $5,500. If you’ve never contributed to a TFSA before, you could use your contribution room to invest up to $57,500 in 2018.



For federal purposes:

  • For 2017, only the tuition tax credit is available. Tax credits for education and textbooks have been abolished, but Quebec continues to offer the tuition tax credit.



For federal purposes:

  • For 2017, the non-refundable children’s art activities tax credit has been abolished.
  • The non-refundable children’s physical activities tax credit has also been abolished.



For federal purposes:

  • The tax credits for dependents with an impairment, caregivers and family caregivers were consolidated into one credit. The new Canadian caregiver credit can represent an amount of $1,032 before the abatement, that is, $6,883 x 15%. This credit can be increased by $323 for a spouse or handicapped child.

For Quebec purposes:

  • The refundable tax credit for caregivers granted to persons taking care of a spouse at least 70 years old with whom they live, in their own home, was increased from $1,000 to $1,007.

Read the second article about 2017 income tax returns here.

This article was published in French in Journal de Montréal and Journal de Québec on 2018, April 3th.

Visit taxō, a simple online tax return service with experts that help you quickly maximize your tax credits.

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Louis Roy
Partner and president of Catallaxy | CPA, CA | Digital and technology consulting

The Canadian Revenue Agency treats cryptocurrencies as commodities for Canadian tax purposes.

This poses a problem for cryptocurrencies which must be valued at each trade. Unlike standard commodities, their price is volatile with markets differing around the planet.

Under the Income Tax Act, cryptocurrencies present new challenges in reporting. In addition, due to the nature of foreign currency exchanges, there are legal quagmires surrounding the purchase of crypto assets abroad. While cryptocurrencies are generally taxed as capital gains, businesses profiting from their trade may see gains taxed as business income. Demonstrating this distinction may require expertise, particularly in the case of masternode maintenance.

Cryptocurrencies and tax strategies

You are considered to be running a business if:

  • You have a history of trades;
  • Those are rapid purchases;
  • You commit an important part of your time to the analysis of the market;
  • You do the research;
  • You finance your transactions.

We will highlight available tax strategies for you, such as incorporation.

The various requirements can be challenging to identify. For instance, taxpayers are required to file Form T1135 with CRA if they own specified foreign property that in the aggregate cost more than $100,000.

In the case of crypto assets, when these are held by third-parties in a foreign state, they may subject to that form. Failure to file results in a minimum automatic penalty of $2,500 for each annual failure to file.

Our tax experts and lawyers will help work through your obligations.

28 Mar 2018  |  Written by :

Louis Roy is a partner at Raymond Chabot Grant Thornton. He is your expert in assurance for the...

See the profile

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Quebec’s economy is faring better and the Quebec government has decided to open the floodgates.

In his fifth budget, the Quebec Finance Minister is focussing on investments in a wide range of economic sectors. However, the current scenario places Quebec in a deficit position for the next two years.

Quebec’s 2018-2019 Economic Plan is casting a wide net, encompassing health, education, public transit, road infrastructures and families. Businesses will also reap benefits. Could the election year have influenced the many investment choices?

Support was expected for SMEs and the budget did not disappoint. Tax relief measures totalling $2.2B will be introduced by 2022-2023 to boost their competitiveness.

Lower payroll taxes

Corporate contribution rates to the Health Services Fund will be reduced, providing SME with $1.2B in savings.

Income tax reduction

An additional positive measure is the gradual decrease of the income tax rate for SMEs in the services and construction industries to 4% by 2022­2023, with the objective of having these SME eventually benefit from the same rates as SMEs in the primary and manufacturing term. This measure results in a $1B tax reduction.

Additional innovation support

The budget includes support for businesses to foster innovation and help them carve a place for themselves on the international market.

Support of $60M by 2019-2020 has been announced to promote the development of supply chains optimized by artificial intelligence. Additionally, relief totalling $241M has been provided to accelerate business investment in the next five years. These enhancements are the result of increasing the additional capital cost allowance from 35% to 60% and extending it to March 31, 2020 to support the acquisition of cutting-edge technologies. This measure would benefit more than 30,000 businesses investing to improve their productivity.

National labour strategy

Over the next five years, more than $800M will be invested to better support the labour market. Among others, the budget introduces a new tax credit for SMEs if they set aside time for their employees to develop their professional skills. In the coming weeks, the government will be tabling its 2018­2023 National Workforce Strategy. This national strategy will set aside significant resources to better integrate immigrants in the job market.

Regional economic development

The numerous measures announced include new funds totalling $724M by 2022-2023 for initiatives to be determined that would support economic development in the regions, be it for the forestry sector, mining development, pursuing the maritime strategy or the Plan Nord.

Voluntary disclosure program

The government is announcing a consultation to review the voluntary disclosure program with the potential objective of tightening it up like the federal government did.

For more information on the tax measures announced in the 2018-2019 budget, download the document below.