An amendment to the Regulation respecting the Taxation Act in Quebec introduces a broad set of technical adjustments, rate updates, interpretive clarifications, as well as, retroactive validations that affect various provisions of the Québec tax framework. Several amendments update eligibility lists for corporations recognized under investment-related statutes. Section 21.19R1 is expanded to include corporations registered under Prince Edward Island’s Community Development Equity Tax Credit Act and Alberta’s Investing in a Diversified Alberta Economy Act, with the provisions applied retroactively to 2011 and 2016 respectively.

A substantial change is the addition of new non-repayable federal contributions related to battery cell and module production in Canada to the list of exempt amounts under section 87R5, effective from February 2024. Amendments to section 92.5R3 clarify the treatment of certain government-issued debt obligations, specifying interest-rate conditions applicable retroactively to instruments issued after October 1996. In vehicle-related provisions, section 99R1 is updated to introduce a maximum capital cost of $38,000 for passenger vehicles acquired after December 2024, while parallel changes to sections 421.6R1 and 421.6R3 raise lease-related limits for passenger vehicles under agreements made after December 2024.

Section 130R23 is replaced to clarify that prorated deductions for tax years shorter than 12 months must be calculated strictly in proportion to the days in the taxation year, a rule applied to years ending after April 2021. Further indexation adjustments are included in section 133.2.1R1, increasing per-kilometre rates for 2025. Additional technical changes refine the classification of certain depreciable property under section 156.7.6R1, particularly regarding Class 53 eligibility. Section 488R1 is simplified by striking paragraph c, with special reading rules applied for prior years dating back to 2014.

Several amendments retroactively recognize share distributions from European corporations—including Essity Aktiebolag, Nordic Entertainment Group, and Alcon Inc.—under section 578.2R1, ensuring consistent tax treatment of these corporate actions since 2017–2019. Section 716R1 is revised to reference American Friends of Canadian Nature Inc., with transitional language for pre-2018 applications. Additional clarifications are added to sections 851.22.1R0.1 and 851.22.1R0.4 to include Interac Corp. and Farm Credit Canada in the relevant enumerations of entities.

A significant update concerns employee- and pension-related rules. Amendments to section 890.1R1 incorporate the April 2022 letter of intent between Air Canada and its unions and recognize a trust and partnership structure established in 2017 for U.S. Steel Canada Inc. under the Companies’ Creditors Arrangement Act. These ensure proper tax treatment of contributions and distributions for pension and employee-benefit purposes. Adjustments to sections 1015R1 and 1015R6 further refine definitions of remuneration and allowable employee deductions beginning in 2023 and 2025.

Quebec (1393/2025) December 9, 2025
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