Refundable Tax Credit Program for Ifcs

ORIGINAL TEXT IN FRENCH

REFUNDABLE TAX CREDIT PROGRAM FOR IFCS

APPLICATION FOR ANNUAL ELIGIBILITY CERTIFICATE

REGARDING THE ACTIVITIES OF AN IFC Refundable tax credit program for IFCs (May 2014) 2 General information

ELIGIBILITY CRITERIA Under the provisions of the legislation regarding the refundable tax credit program for IFCs, an IFC means a business or part of a business that satisfies the following conditions:  it is operated by a corporation1;  it employs, at all times, a minimum of six eligible2 full-time3 employees;  All of its activites must involve qualified international financial transactions (QIFT);  the activities enabling the QIFTs effected in the course of its operations to be carried out must be managed entirely within the territory of the agglomeration of Montréal;  its activities are grouped together in one place within the territory of agglomeration of Montréal;  it holds an annual certificate for itself and for its eligible employees issued by the Minister of Finance.

TAX BENEFITS ASSOCIATED WITH IFC STATUS 4 The operator of an IFC can receive, for a taxation year, a refundable tax credit (RTC) representing 30% of the eligible salary incurred for the year regarding its eligible employees other than foreign specialists, up to an annual maximum of $20 000 per employee.

To be entitled to the tax credit for a taxation year, the corporation must enclose with its tax return, the form prescribed to that effect by Revenu Québec, a copy of the annual certificate issued by the Minister of Finance regarding the IFC's activities as well as a copy of the annual certificate issued for the eligible employees of the IFC for whom it is applying for this tax credit.

The Minister issues an annual certificate to the corporation regarding the activities of the IFC it operates where, for the taxation year, the qualification certificate issued for it was valid and he is of the view that its activities concerned QIFTs, on the one hand, and that the other provisions of the legislation stipulated regarding IFCs are satisfied, on the other.

PROCEDURE FOR OBTAINING AN ANNUAL CERTIFICATE

To obtain an annual certificate, simply complete the French version of this form and append the documents required in section 12. The period covered by this type of certificate normally corresponds to a taxation year of the corporation that operates the IFC. The application must be sent to the Ministère des Finances at the same time as the annual certificate application for the eligible employees for whom the corporation intends to claim the refundable tax credit, i.e. as soon as possible after the end of the corporation’s taxation year.

The analysis of the application may also include a meeting between a representative of the Department and the person responsible for the application.

1 Partnerships are not eligible to this program. 2 The expression “eligible employees” includes foreign specialists and local employees who hold an employee – local or foreign specialist – qualification certificate issued by the Minister. 3 The expression “full-time” means a minimum of 26 hours of work per week, for a stipulated minimum of 40 weeks. 4 This document summarizes the benefits associated with the IFC program. For complete information, please refer to the website of the Department at : www.finances.gouv.qc.ca/inst-cfi-en.asp Refundable tax credit program for IFCs (May 2014) 1 Refundable tax credit program for IFCs (May 2014) 2 General information

FEES The application must be accompanied by a cheque payable to the Minister of Finance for the fees required to analyze the file. The fee schedule applicable can be viewed at the following address: www.finances.gouv.qc.ca/inst-cfi-en.asp. If a number of applications are submitted at the same time, enclose a single cheque for the total required fee.

TO REACH US Ministère des Finances du Québec Gestion des mesures relatives aux CFI 380, rue Saint-Antoine Ouest, bureau 6100 Montréal (Québec) H2Y 3X7 Telephone: 514 499-6569 Fax: 514 873-3915 Email: [email protected] Website: www.finances.gouv.qc.ca/inst-cfi-en.asp

Refundable tax credit program for IFCs (May 2014) 3 Refundable tax credit program for IFCs

Application for annual eligibility certificate regarding the activities of an IFC

Note to the reader

The information you provide on this form is collected by the Ministère des Finances (MFQ) and is used to verify the eligibility of your activities for the Refundable Tax Credit Program for IFCs. Accordingly, the requested information must be provided and failure to do so may cause your application to be denied. This information is considered confidential and can only be sent to third parties with the consent of the person who provided it, as stipulated in the Act respecting access to documents held by public bodies and the protection of personal information (CQLR, chapter A-2.1). Only authorized staff of the MFQ has access to the information provided. However, some information, if necessary for the enforcement of tax legislation, may be disclosed to Revenu Québec, without the consent of the person who provided it. The information provided may also be used by the MFQ for research, assessment, study, investigation, statistical or cost forecasting purposes or in the course of a survey. The applicant corporation must notify the MFQ in writing, as soon as possible, of any significant change in the information provided. Such notification must be sent to: Ministère des Finances du Québec, Gestion des mesures relatives aux CFI, 380, rue Saint-Antoine Ouest, bureau 6100, Montréal (Québec) H2Y 3X7 7.00 7 1. General information on the IFC Name of the corporation that operates the IFC (business name)

Address of the corporation that operates the IFC

City Province Country Postal code Website

Name of the IFC ( Same as the corporation. If different, enter the name below)

Address of the IFC ( Same as the corporation. If different, enter the address below)

City Province Postal code Website Montréal Québec

Registration number assigned by Revenu Québec to Québec business number (NEQ) the corporation operating the IFC of the corporation operating the IFC

Refundable tax credit program for IFCs (May 2014) 4 2. Head of the IFC 5

Mr. First name Last name

Telephone Fax Email

3. Person responsible for this application (if different from the head of the IFC)

Mr. First name Last name

Telephone Fax Email

4. IFC certificate number 5. Effective date of the IFC certificate

year/ month/day

6. Fiscal year covered by this application From : To :

year/ month/day year/ month/day

5 Name of the responsible person designated by resolution of the board of directors of the corporation operating the IFC. Refundable tax credit program for IFCs (May 2014) 5 7. Registration with a regulatory body (to be completed only by investment dealers and advisers)

Is the corporation registered with regulatory bodies yes no (example: AMF, OSC, SEC, etc)?

If yes, with which ones and what kind of registration?

If not, is the corporation exempted from registering with these yes no bodies?

8. Shareholders

Please enter the names of the specified shareholders 6 of the corporation operating the IFC

Percentage of Name of specified shareholder shares held

% % % % % % % Please enter the names of the shareholders having direct or indirect control of the corporation operating the IFC

Name of the shareholder Country of origin

6 In general, a "specified shareholder" of a corporation, as this expression is understood in the Taxation Act, is, in particular, a shareholder holding at least 10% of a class of shares issued by the corporation. Refundable tax credit program for IFCs (May 2014) 6 9. Qualification of international financial transactions

MFQ authorities will study the information provided in this section in order to rule on the qualification of the international financial transactions the IFC carried out during the fiscal year covered by this application.

You will have to identify the categories of international financial transactions carried out by the IFC business, to specify the context in which they were carried out and lastly, to sketch and to describe the transaction process by which they were carried out.

The following four-step process must be followed rigorously :

Step From the list of 25 categories of qualified international financial transactions (QIFT) stipulated in 1 : section 7 of the Act respecting international financial centres, indicate those carried out by the IFC during the fiscal year covered by this application.

Step For each category of QIFT selected in step 1, download and complete the most recent version of 2 : the corresponding summary sheet in document Appendix 1 that accompanies the application for annual certificate form on the MFQ website.

Step 3 : Attach a diagram and a detailed description of the transaction process specific to each category or sub-category of activity carried out by the IFC to each summary sheet completed in step 2.

Step Confirm that all the eligibility conditions stipulated by law regarding the refundable tax credit 4 : program for IFCs have been satisfied.

Instructions for each of these steps follow.

Refundable tax credit program for IFCs (May 2014) 7 STEP 1 : Referring to the list below, indicate each category of QIFT carried out by the IFC

Transaction on outstanding securities 7.01 7.14 Trust services or securities distribution

7.02 Operation of a clearing house 7.15 Factoring services

Securities advising or portfolio 7.03 management 7.16 Leasing services

7.04 Deposit of money 7.17 Organization of a qualified investment fund

Administration of units of a qualified 7.05 Lending of money 7.18 investment fund

Lending or borrowing of money 7.06 between corporations operating an 7.19 Management of a qualified IFC investment fund

Acceptance or issuance of a letter of 7.07 7.20 Distribution of units of a qualified credit 7 investment fund

7.08 Financing or refinancing by means of a bill of exchange 7.21 Cash management

Execution of foreign exchange 7.09 7.22 Back office activities for a third party transactions

7.10 Financial packaging services 7.23 Documentary collection 8

7.11 Financial engineering services 7.24 Activities performed under the Québec Immigrant Investor Program

Damage insurance brokerage 7.12 7.25 Discount operation carried out services regarding a letter of credit or a commercial instrument

Reinsurance of a risk arising from a 7.13 damage insurance contract

7 For discount transactions carried out consecutively or incidentally to the acceptance of a letter of credit, complete summary sheet 7.25. 8 For discount transactions carried out consecutively or incidentally to a documentary collection transaction, complete summary sheet 7.25. Refundable tax credit program for IFCs (May 2014) 8 STEP 2 : Summary sheets

For each category of QIFT selected in step 1, carried out by the IFC and for which application for annual certification is being made, please complete and enclose the corresponding French summary sheet. The French summary sheets must be downloaded from: www.finances.gouv.qc.ca/inst-cfi-en.asp.

STEP 3 : Diagram and description of the transaction process

Please attach a diagram and a detailed description of the transaction process specific to each category or sub- category of QIFT carried out by the IFC to each summary sheet – annual certificate completed in step 2. Clearly describe all the steps necessary to carry out the transactions.

The diagram and description of the transaction process must cover, when applicable to your activities, all the steps listed below. Provide a detailed description of these steps and specify by whom 9 and where they were carried out. This description must cover the following points, among others :

 Initiation and negotiation in relation to the category of QIFT to be carried out;

 Carrying out of the QIFT;

 Description of the remuneration mode of transactions specific to each category or sub-category of QIFT carried out by the IFC;

 Back office services in relation to the category of QIFT carried out, in particular:  registration of QIFT,

 settlement, delivery and clearing arising from QIFT,

 record-keeping, accounting and production of required statements or reports,

 compliance,

 customer services.

 Follow-up, control and responsibility in relation to the risks incurred;

 Selection and updating of the computer system on which QIFT are carried out.

9 If certain activities were carried out by third parties or outside the IFC, you must provide the necessary details. Refundable tax credit program for IFCs (May 2014) 9 STEP 3 Non-arm’s length relation (cont’d) :

Did the operator of the IFC carry out, during the fiscal year covered by this application, QIFT for a related person ?10

Yes Please identify the person and indicate the nature of the transactions that the operator of the IFC carried out for him.

If more space is required, append a document with the additional information and indicate the number of the corresponding step.

STEP 4 : Declaration of compliance

For the fiscal year covered by this application, has the business that constitutes the IFC satisfied the following eligibility conditions stipulated by law regarding the refundable tax credit program for IFCs?

It was operated by a corporation. oui non

oui non It employed, at all times, a minimum of six eligible11 full-time12 employees.

All its activities pertained to QIFT. oui non

The management of the activities of which that lead to the completion of QIFT carried out in the course of the operations of the business was oui non conducted entirely within the territory of the urban agglomeration of Montréal. Its activities were grouped together in one place 13 within the territory of oui non the urban agglomeration of Montréal.

If, for the fiscal year covered by this application, one or more conditions were not satisfied, in whole or in part, please give the reason :

10 For example, a QIFT carried out by an IFC for its head office, a subsidiary or a sister company constitutes a transaction between related persons.

11 The expression “eligible employees” includes foreign specialists and local employees who hold an employee – local or foreign specialist – qualification certificate issued by the Minister. 12 The expression “full-time” means a minimum of 26 hours of work per week, for a stipulated minimum of 40 weeks. 13 In general, the expression “in one place” means at the same civic address. Refundable tax credit program for IFCs (May 2014) 10 If more space is required, append a document with the additional information and indicate the number of the corresponding step.

Refundable tax credit program for IFCs (May 2014) 11 10. Documents required to process the application

The head of the IFC or the person responsible for the application must be sure to enclose with the application all the required documents by completing and signing the control sheet on the following page (Section 12). For faster processing of your application, be sure that this sheet is duly completed and signed.

11. Signature of the head of the IFC

I, the undersigned, declare, as head of the IFC, that during the fiscal year ended

, carried out year/ month/ day Name of the IFC activities bearing on qualified international financial transactions for which in particular it obtained its qualification certificate as an international financial centre. Upon request, I shall provide the Ministère des Finances, Revenu Québec, or their representatives, with any document concerning this annual certificate application or any matter relating to the constitution of the IFC and its operation. I understand that the annual certificate regarding eligible activities will be issued by the Minister upon receipt of this form together with the required documents and a cheque payable to the Minister of Finance in payment of the fees associated with its issuance. I also understand that under the provisions of the law regarding IFCs, the Minister may retroactively revoke any qualification certificate or annual certificate issued under false pretences or when justified by information or documents brought to his attention. Lastly, I undertake to advise, in writing and as soon as possible, the Ministère des Finances, of any material change that may arise regarding the information provided14.

Signature of the head of the IFC Date

Name (print)

14 The head of the IFC is required to inform the Department of any significant change in the affairs of the IFC, in particular: change of address or ownership, restructuring, the addition or loss of activities or personnel, how QIFTs are conducted, etc. Refundable tax credit program for IFCs (May 2014) 12 12. Control sheet: documents that must be sent to the Department . 1. Mail two copies of the following documents to : For use by the Department Ministère des Finances du Québec Gestion des mesures relatives aux CFI 380, rue Saint-Antoine Ouest, bureau 6100 Montréal (Québec) H2Y 3X7

Place a checkmark next to the documents being mailed: . Application form duly completed and signed; Summary sheet duly completed for each category of QIFT you report that you have carried out (see Step 1); Diagram and detailed description of the transaction process for each summary sheet submitted; Recent detailed organization chart of the IFC; The most recent financial statements of the corporation that operates the IFC; The financial statements of the IFC (income statement at a minimum) for the fiscal year covered by this application or those enclosed with the latest tax return, as the case may be; Cheque payable to the Minister of Finance for the fees required to analyze the file. The fee schedule can be viewed at the following address: www.finances.gouv.qc.ca/inst-cfi-en.asp If a number of applications are submitted at the same time, enclose a single cheque for the total required fee.

2. Send the following documents electronically to the following address: [email protected] Electronic copy (Word) of the application form; Electronic copy (Word) of each summary sheet.

Note that the original copy of the form duly completed, signed and sent by mail is considered the official application.

If it is impossible for you to send us all these documents at the same time as the application, please explain why and indicate the date you expect to send them to us. .

I declare that I have enclosed all the required documents with the application or explained why some, if any, are missing.

Refundable tax credit program for IFCs (May 2014) 13

Date Signature of the head of the IFC or of the person responsible for the application

Refundable tax credit program for IFCs (May 2014) 14