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QUEBEC

1997 FEDERAL AND QUEBEC PERSONAL INCOME TAX RATES1

  QUEBEC
TAXABLE INCOME FEDERAL2 TAXABLE INCOME PROVINCIAL TAX
LOWER LIMIT UPPER LIMIT BASIC TAX3 RATE ON EXCESS LOWER LIMIT UPPER LIMIT BASIC TAX3 RATE ON EXCESS
$ 0 $ 6,456 $ 0 0.00% $ 0 7,315 $ 0 0.00%
6,457 29,590 0 14.70 7,316 14,000 0 19.06
29,591 59,180 3,402 22.49 14,001 23,000 1,274 21.06
59,181 62,192 10,057 25.09 23,001 31,000 3,169 23.07
62,193 AND UP 10,812 26.54 31,001 50,000 5,015 24.22
        50,001 52,625 9,617 25.28
        52,626 AND UP 10,281 26.48
  1. The tax rates include the federal and provincial surtaxes and reflect budget proposals to May 15, 1997. Where the tax is determined under the minimum tax provisions, the above table is not applicable. The tax rates do not reflect the 2% tax reduction of the excess of $10,000 over Quebec taxes payable after deducting non-refundable credits, or the health services fund contribution which may be required on non-employment income.
  2. Federal tax payable has been reduced by the 16.5% abatement for Quebec taxpayers whose taxes payable are the aggregate of federal and Quebec taxes. Taxable income for Quebec purposes is likely to differ from that determined for federal purposes.
  3. The federal tax and provincial tax determined by the table should be reduced by all applicable credits (see chart below) other than the basic personal tax credit, which has been reflected in all the calculations.

1997 COMBINED TAX RATES ON DIVIDEND INCOME1

TXBL.INC QUE2 TXBL.INC. QUE2 TXBL.INC. QUE2
$ 6,457-7,315 3.96% $23,001-29,590 21.68% $50,001-52,625 33.61%
7,316-14,000 16.67 29,591-31,000 31.41 52,626-59,180 34.56
14,001-23,000 19.17 31,001-50,000 32.30 59,181-62,192 37.81
        62,193 AND UP 38.78
  1. The rates shown are the combined federal (including the federal surtax) and provincial rates (based on budget proposals to May 15, 1996), and apply to the actual amount of dividends subject to tax received by individuals from taxable Canadian corporations.
  2. Taxable income for Quebec purposes is likely to differ from that determined for federal purposes. The tax rates do not reflect the 2% tax reduction of the excess of $10,000 over Quebec taxes payable after deducting non-refundable credits, or the health services fund contribution which may be required on non-employment income.

1997 FEDERAL AND QUEBEC PERSONAL TAX CREDITS

   TAX VALUE OF FEDERAL CREDIT QUEBEC CREDIT2
Amount of credit:    
Basic personal credit (see note 3 above) $1,004 $1,302
Spousal credit 8377 1,3029
Equivalent-to-spouse credit3 8377 NIL
Dependents under age 194    
- first NIL 5749
- each additional NIL 5309
Infirm dependent aged 18 or over 3668 1,3029
Dependent aged 70 or over (direct ascendant) NIL 550
Dependant aged 18 or over NIL 5309
Age credit (65 or over) 51210 44111
Disability credit 658 485
Pension income (maximum) 156 20111
Education - per month 25 NIL
Credits as a percentage of:    
Tuition fees 15.56% NIL5
Medical expenses5 15.56 22.07%
Charitable donations    
- first $200 15.56 22.07
- remainder 26.54 22.07
CPP/QPP contributions6 15.56 22.07
UIC premiums 15.56 22.07
  1. The tax value of the federal credit is the sum of the federal tax credit and the reduction in federal surtax as it would apply to taxpayers in the highest tax bracket (8% of credit), less the 16.5% abatement for Quebec taxpayers.
  2. The tax value of the Quebec credit is the sum of the Quebec tax credit and the reduction in Quebec surtaxes as it would apply to taxpayers at the highest tax bracket.
  3. For Quebec tax purposes, an additional personal credit of $211 is available for persons living alone or with a person covered by the tax credit for dependent children. This credit is reduced when net income exceeds $26,000. A further credit of $287 is available for single-parent families.
  4. For Quebec tax purposes, the credit is also available for dependants over age 18 studying full time and an additional credit of $364 per term is available (maximum two terms) for dependent children engaged in full-time postsecondary studies.
  5. For Quebec tax purposes, deductions rather than credits are available for tuition fees.
  6. The credit is computed as 15.56% (22.07% for Quebec tax purposes) of the amount by which eligible medical expenses exceed the lesser of $1,614 and 3% of net income.
  7. All CPP/QPP paid by both employees and self-employed individuals will give rise to a tax credit.
  8. The credit is reduced by 15.56% of the dependant's income over $538.
  9. The credit is reduced by 15.56% of the dependant's income over $4,103.
  10. The credit is reduced by 22.07% of the dependant's income.
  11. The maximum age credit of $512 accurs at $25,921 of net income and declines to nil as net income rises to $49,134.
  12. The credit is reduced when net income exceeds $26,000.

MINIMUM TAX

Alternative minimum tax (AMT) and Quebec minimum tax (QMT) may be applicable where the tax otherwise payable is less than the tax determined by applying the relevant AMT and QMT rate {17% for federal purposes (less the federal abatement, plus federal surtax) and 20% for Quebec purposes} to the individual's taxable income adjusted for certain preference items.

1997 TAX RATE CARD

CORPORATE INCOME TAX RATES1

  MANUFACTURING AND PROCESSING INCOME OTHER INCOME
INCOME ALLOCATED TO: ELIGIBLE FOR SBD2 EXCESS ELIGIBLE FOR BD2 EXCESS3
NEWFOUNDLAND 18.12%4 27.12%4 18.12%4 43.12%4
P.E.I. 20.62 29.62 20.62 44.12
NOVA SCOTIA 18.124 38.12 18.124 45.12
NEW BRUNSWICK 20.12 39.12 20.12 46.12
QUEBEC 19.034 31.274 19.034 38.274,5
ONTARIO 22.62 35.627 22.62 44.626,7
MANITOBA 22.124 39.12 22.124 46.12
SASKATCHEWAN 21.12 39.128 21.12 46.12
ALBERTA 19.12 36.62 19.12 44.62
BRITISH COLUMBIA 22.124 38.62 22.124 45.62
N.W.T. 18.12 36.12 18.12 43.12
YUKON 15.62 24.62 19.12 44.12
NON-RESIDENT N/A N/A N/A 39.52
Net Federal Rate 13.12% 22.12% 13.12% 29.12%
  1. The rates shown are the combined federal and provincial rates for corporations with fiscal years commencing January 1, 1997 and ending December 31, 1997 Different rates will apply to corporations with non-calendar year ends or short year ends. The rates reflect budget proposals to May 15, 1997.
  2. The small business deduction (SBD) and related lower provincial rates are applicable to the first $200,000 of active business income of Canadian-controlled private corporations (CCPCs) or associated groups of CCPCs. CCPCs or associated groups with taxable capital in excess of $10 million will have the benefit of the SBD reduced. The benefit is eliminated at $15 million.
  3. There is an additional 6.67% refundable federal income tax on investment income of CCPCs.
  4. The tax rate for new companies qualifying for the applicable provincial tax exemption is equal to the net federal rate. In Nova Scotia, a three-year New Small Business Tax Reduction program exists for businesses incorporated after April 24, 1992. In Quebec, a three-year exemption from income, capital and payroll taxes is available to new corporations incorporated after March 25, 1997, carrying on an eligible business. In Manitoba, a small business tax reduction applies for the first five years for qualifying corporations incorporated before 1993. In Newfoundland, a 10-year exemption from income, payroll and retail sales taxes is available for certain qualifying corporations. British Columbia has introduced a two-year income tax exemption for new eligible small businesses incorporated before March 21, 2001.
  5. The Quebec tax rate is 45.83% on non-active business income for Quebec tax purposes.
  6. The Ontario tax rate is 1% lower on farming, fishing, mining and logging income not eligible for the SBD.
  7. Ontario imposes a surtax on active business income exceeding $200,000 where the corporation has benefitted from the Ontario SBD. The Ontairo SBD benefit is effectively eliminiated entirely at about $500,000 of taxable income.
  8. The manufacturing and processing profits rate is reduced by up to 7% by way of tax rebate.

CAPITAL AND PAYROLL TAXES

JURISDICTION GENERAL CAPITAL TAX RATE PAYROLL TAX RATES
MANITOBA 0.3%1 0 - 4.5%4
NEWFOUNDLAND --- 2.05
ONTARIO 0.32 0 - 1.956
QUEBEC 0.64 4.267
SASKATCHEWAN 0.6 ---
BRITISH COLUMBIA 0.33 ---
NOVA SCOTIA 0.258 ---
  1. Tax reduced if taxable capital is less than $2,000,000.
  2. Tax reduced if taxable capital is less than $2,300,000.
  3. Tax reduced if taxable capital is less than $1,750,000.
  4. Tax is nil on first $750,000 of payroll; 4.5% on second $750,000; 2.25% thereafter.
  5. Tax is nil on first $100,000 of payroll; 2.0% for payroll over $100,000.
  6. Tax is nil on first $200,000 of payroll; 1.95% for payroll over $200,000.
  7. A payroll tax refund is $1,200 is available for each full-time job (maximum 300 created as of January 1, 1997.
  8. Effective April 1, 1997. Tax is reduced is taxable capital is less than $10,000,000.