Tax benefits

A new financial services corporation (NFSC) may benefit from refundable tax credits on eligible expenses and salaries for a maximum of five consecutive years.

A foreign specialist employed by the corporation may also benefit from a deduction in the calculation of his or her personal tax for five consecutive years.

Advantage for the NFSC

Refundable tax credit for eligible expenses

The corporation may benefit from a refundable tax credit equal to 32% of the qualifying expenses incurred. The tax credit can reach $120 000 per year.

Eligible expenses include:

fees relating to the constitution of:

the first regulatory file with a recognized regulatory or self-regulatory organization of a financial market
the first application for participation in a stock exchange
a prospectus required by a recognized regulatory or self regulatory organization of a financial market

fees paid to a compliance consultant to ensure compliance with the requirements of a recognized regulatory or self‑regulatory organization of a financial market
fees, contributions and charges paid to a regulatory or self regulatory organization of a financial market
fees and expenses incurred as a participant in a stock exchange
fees for:

logging in and using an electronic trading solution for participation in a stock exchange
a subscription to a financial research or analysis tool or service

For more details, consult the Tax Credit for New Financial Services Corporations page on the Revenu Québec website.

Refundable tax credit on the salary of eligible employees

The corporation may benefit from a refundable tax credit equal to 24% of the eligible salary paid to local employees and foreign specialists. An employee’s eligible salary refers to income calculated under the Taxation Act (CQLR chapter I-3) . For the purposes of the tax credit, the eligible salary is limited to $100 000 for a full taxation year. The tax credit can therefore reach $24 000 per employee, per year.

If the salary is calculated for part of a taxation year (for example, in the case of a hiring or departure during the year), the maximum amount of the tax credit is calculated on a prorated basis according to the number of qualifying days.

For more details, consult the Tax Credit for the Hiring of Employees by New Financial Services Corporations page on the Revenu Québec website.

Advantages for foreign specialist employed by the NFSC

A foreign specialist may benefit from a deduction in the calculation of his or her taxable income for a period of five consecutive years.

The deduction applies only to the Québec income tax return and represents a percentage of the foreign specialist’s income equal to:

100% for the first two years
75% for the third year
50% for the fourth year
25% for the fifth year