On March 17, 2016, Quebec released its provincial budget. The
budget contained several measures designed to increase the benefit
to Quebec resident donors from charitable donations and to
facilitate the operations of resident donors in Quebec.
Improving the Tax Treatment of Donations
Prior to the Quebec 2016 Budget, save for a few exceptions, the
tax credit available for donations made by an individual could only
be used against 75% of the individual's annual income. Any
amount of excess donation tax credit could be carried forward for
the 5 years following the year in which the donation was made.
According to Revenu Québec's statistics, less than
one-third of 1% of Quebec donors exceed the annual 75% limit. Given
that the 75% limit is rarely applied and the many exceptions to the
limit, the calculation of the tax credit for charitable donations
was needlessly complicated. Therefore, the Government of Quebec has
proposed to abolish the income limit for the purposes of
calculating the tax credit for donations made by individuals. This
means that for the 2016 taxation year and going forward, charitable
donation tax credits for individuals may be used against 100% of
the individual's income rather than just 75%.
Increasing the Tax Credit
Presently, the tax credit available for charitable donations
made by individuals equals 20% of the first $200 donated and 24%
for donations in excess of the first $200 donated. In the Quebec
2016 Budget, for donations made as of January 1, 2017, an
individual will be entitled to the following charitable donation
20% of the first $200 donated;
25.75% of the amount of donation between $200 and the threshold
for the fourth tax bracket (for 2016 this limit is $103,150);
24% on amounts donated over the threshold for the fourth tax
Increase in the Allowable Amount of Food Donations from Food
In its 2015 budget, the Government of Quebec increased the
charitable deduction limit and charitable tax credit for food
donations made by food processors to Quebec food banks by 50%. In
the Quebec 2016 Budget, the Government of Quebec has expanded the
list of qualified donees to whom such donations can be made. The
Quebec 2016 Budget has also expanded the types of donations that
will qualify for the enhanced credit to include not only fresh food
and produce but also certain processed foods.
Simplification of the Procedure to Register a Charity in
Quebec is the only province that requires a charity to be
registered separately from the charitable registration regime
provided for under the Income Tax Act (Canada). Without
registration under the Taxation Act (Quebec), a charitable
donation receipt may be refused under the Taxation Act
In the Quebec 2016 Budget, the government of Quebec has
announced that to assure an equivalent treatment, a charity that is
registered with the Canada Revenue Agency will be deemed to be
registered under the Taxation Act (Quebec). Revenu
Québec has retained the ability to modify, annul, or revoke
the deemed charitable registration status. This modification will
take effect retroactively to January 1, 2016.
Additionally, donations made before January 1, 2016 to an
organisation that, at the time of the donation, was registered with
the Canada Revenue Agency as a charity, shall be deemed to be made
a charity registered under the Taxation Act (Quebec).
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).