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Québec Compensation Tax for Listed Financial Institutions

1

Notes 

(1) All taxpayers who are “listed financial institutions” (for purposes of the Excise Tax Act) 

at any time in a taxation year must pay a compensation tax for that period. A corporation 

that elects to be a listed financial institution is deemed to be one throughout the period in 

which the election remains in effect and must pay the compensation tax for that period.

(2) Two of the three components of the compensation tax on financial institutions, 

namely wages paid and insurance premiums, was temporarily increased (“temporary 

contribution”) for taxation years ending after March 30, 2010 and beginning before  

April 1, 2014. If a taxation year straddles either of these dates, certain rules apply.

(3) The 2013 Québec budget (tabled on November 20, 2012) proposed to further increase 

the temporary contribution by financial institutions for the period from January 1, 2013 to 

March 31, 2019. If a taxation year straddles January 1, 2013, certain rules apply. 

2012

2013

Base 

Rate

Temporary 

Contribution

Base 

Rate

Temporary 

Contribution

Banks, loan and trust 

corporations, and corporations 

trading in securities

2%

1.9%

0%

2.8%

Insurance corporations subject 

to Québec capital tax

0.35%

0.2%

0%

0.3%

Credit and savings unions 

2.5%

1.3%

0%

2.2%

All other listed financial 

institutions

1.0%

0.5%

0%

0.9%

(4) Paid-up capital is determined without taking into account the deduction for corporations 

that previously qualified for the capital tax holiday. Effective January 1, 2013, paid-up capital 

is no longer included in the computation of compensation tax.

(5) This category includes corporations that are listed financial institutions by virtue of an 

election (or deemed election) under the Excise Tax Act. If the corporation is a listed 

financial institution by virtue of such an election or deemed election and a member of a 

closely related group, and if it makes supplies of financial services (or goods and services 

deemed to be financial services) amounting to less than 90% of the value of all its 

supplies, the compensation tax will be based on the proportion of supplies of financial 

services (or deemed financial services) to total supplies.

Calculation of Tax

Type of Entity

2012

2

2013 to 2019

3

Banks, loan and trust 

corporations, and corporations 

trading in securities

0.25% of Québec paid-up 

capital

4

 plus 3.9%

3 

of Québec 

wages

2.8%

3

 of  

Québec wages

Insurance corporations subject 

to Québec capital tax

0.55%

3

 of premiums payable

0.3%

3

 of  

premiums payable

Credit and savings unions 

3.8%

3

 of Québec wages

2.2%

3

 of  

Québec wages

All other listed 

financial institutions

5

1.5%

3

 of Québec wages

0.9%

3

 of  

Québec wages

Current as of May 3, 2013

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