MONTRÉAL, February 24, 2015 – In connection with pre-budget consultations, Raymond Chabot Grant Thornton is calling on the Quebec government to take action with respect to tax incentives, entrepreneurial succession and innovation, suggesting nine recommendations related to these three strategic areas.
As it has actively done since 2010, the firm continues to reiterate how important it is to stop penalizing business owners who transfer their business to family members. Currently, it is more advantageous for owners to sell their business to a stranger rather than to a company held by their own children. Tax equity during intergenerational business transfers is essential in order to foster the next generation. The Quebec government should set the example by amending the Quebec Taxation Act in order to make business transfers more efficient.
“To boost economic growth, the firm is even suggesting that the Quebec government abolish the business tax for SMEs with annual revenues under $500,000 so that they invest these amounts in productivity, employment and innovation,” commented Emilio B. Imbriglio, President and CEO of Raymond Chabot Grant Thornton.
“Planning is a must when it comes to succession. Managers are responsible for having an appropriate succession plan that considers all transfer issues, be they fiscal, strategic, human, legal or financial in nature, so that they can properly pass the torch to the next generation,” added Imbriglio.
Effective succession planning usually takes anywhere from two to eight years. Unfortunately only 9% of business owners have a formal plan in place. That’s why Raymond Chabot Grant Thornton is suggesting that the Quebec government develop new mechanisms to ensure that succession plans are applied efficiently, in particular, by certifying professionals and accrediting plans.
For this important strategic issue, the firm is suggesting an innovation tax credit be created to help SMEs increase their technological investments and spur their growth. Currently, the scientific research and experimental development (SR&ED) tax credit is only offered to businesses conducting research.
Contrary to direct aid schemes, which are burdened by red tape, overly arbitrary and unpredictable, tax credits are quicker to implement since they are already being used by many companies. If the rules are simple and stable, they will be easy to apply.
To view Raymond Chabot Grant Thornton’s recommendations in the letter sent to Quebec Finance Minister Carlos Leitão, visit: www.rcgt.com/budget-consultations2015-2016. (Letter in French only.)
About Raymond Chabot Grant Thornton
Founded in 1948, Raymond Chabot Grant Thornton has become a leader in the fields of assurance, tax, consulting services, and business recovery & reorganization. Its strength is based on a team of over 2,400 people, including some 230 partners in more than 100 offices in Quebec, eastern Ontario and New Brunswick. For over 30 years, Raymond Chabot Grant Thornton has been a member of Grant Thornton International Ltd, providing clients with the expertise of member and correspondent firms in more than 100 countries.
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Senior Consultant – Public Relations
Raymond Chabot Grant Thornton
24 Feb 2015 | Written by :