New financial services company
$120,000
Tax Credit
Description:
These tax measures were put in place by the Ministry of Finance to support entrepreneurship in the financial sector. More specifically, they target the creation of new financial services companies (NSSF) in Quebec.
To benefit from it, a company must hold the certificate and annual attestations required under the Act respecting the sectoral parameters of certain fiscal measures (RLRQ, chapter P-5.1) This link opens in a new windowThe certificate is valid for a maximum of five years .
Comments on Funding:
Refundable tax credit for eligible expenses
The company can benefit from a refundable tax credit equal to 32% of the eligible expenses incurred. The tax credit can reach $120,000 per year.
Eligible expenses include:
fees relating to the constitution:
from the first regulatory file filed with a recognized regulatory or self-regulatory body of a financial market
from the first file of participation in a scholarship
of a prospectus required by a recognized regulatory or self-regulatory body of a financial market
fees paid to a compliance consultant to ensure compliance with the requirements of a recognized regulatory or self-regulatory body of a financial market
fees, contributions and charges paid to a regulatory or self-regulatory body of a financial market
the rights and charges incurred as a participant in a scholarship
the costs:
for connection and use of an electronic trading solution for participation in a stock exchange
subscription to a financial research or analysis tool or service
Before the end of the corporation’s second taxation year.
Eligibility:
Eligible employees
Certain employees may qualify as an eligible employee, local or foreign specialist, under the New Financial Services Firm (NSSF) measures.
Local employee
To be recognized as an eligible local employee for a given period, an employee must:
work full time, i.e. a minimum of 26 hours per week
hold an employment contract of at least 40 consecutive weeks
perform functions directly attributable to the transactional process specific to the performance of the activities provided for in the company’s certificate
devote a minimum of 75% of its functions to the performance of eligible activities
work in the company’s establishment located in Quebec
Learn more about tax benefits
Foreign specialist employee
To be recognized as a foreign specialist for a given period, an employee must:
have a high level of expertise in the field of finance
hold an employment contract concluded with the company operating the NSSF before arriving in Canada
work in the company’s establishment located in Quebec
perform functions directly attributable to the transactional process specific to the performance of the activities provided for in the company’s certificate
devote a minimum of 75% of its functions to the performance of eligible activities
Learn more about tax benefits
Application Steps:
Make a request
Here are some practical tips for companies that want to take advantage of the tax measures for new financial services companies (NSSFs).
To obtain NSSF status
The company must complete the Application for Certificate as a New Financial Services Company form and provide the documents required therein.
You will find the necessary documents in the NSSF Forms section .
The certificate application is made only once and must be submitted before the end of the new company’s second tax year.
To obtain an annual certificate
At the end of each tax year, the company must complete the following forms and provide the documents required therein:
a request for annual certification with regard to the company
an annual certificate request for each eligible employee, including the foreign specialist
You will find the necessary documents in the NSSF Forms section .
Requests for annual certification (company and employee) must be made each year so that the company and the foreign specialist can claim tax benefits from Revenu Québec.
For a foreign specialist
For the tax benefit granted to the company as well as for the personal tax benefit with respect to the foreign specialist, the company must submit the following forms and the documents required therein:
a request for a certificate no later than the last day of February following the entry into service of the foreign specialist
an application for an annual certificate, for the personal tax benefit, after the end of the calendar year, no later than the last day of February
You will find the necessary documents in the NSSF Forms section .
Documentation Needed:
1. Application for an Annual Certificate Regarding a Corporation
2. Appendix A – Application for an Annual Certificate Regarding an Employee
3. Detailed Organization Chart
4. Financial Statements (most recent, non-consolidated)
5. Investment Fund Prospectus (if applicable)
Other Things to Note:
Applicable laws
The information contained in the New Financial Services Company section and its subsections are provided for information purposes only.
For full details on applicable tax measures for new financial services companies, refer to the following laws and documents:
Act respecting the sectoral parameters of certain fiscal measures (RLRQ, chapter P-5.1) This link opens in a new window(Chapters I to X and Chapters VI and VII of Annex E)
Taxation Act (RLRQ, chapter I-3) This link opens in a new window(articles 1029.8.36.166.69 to 1029.8.36.166.79)
About the author
Maurice
