Taxpayers who used a consultant with regard to their refundable tax credit activities (e.g. SR&ED, design, e-commerce, etc.) whose fee was contingent on the amount of Quebec refundable tax credits obtained must file Quebec Form TP-1079. This form discloses the nature of the work done and the identification of the consultants involved.
Form TP-1079 became applicable for refundable tax credit activities subject to contingent fees made on or after March 26, 2015. The form must be filed by the due date of the taxpayer’s tax return (for corporations the tax returns are due six months after year-end).
The filing of this form specifically for refundable tax credit activities is required when:
- The advisor or consultant was hired to undertake the work to claim the refundable tax credit;
- The work was subject to an undertaking of confidentiality or involved conditional remuneration (i.e. the advisor’s fee was a percentage of the refundable tax credit received by the taxpayer); AND
- Either the amount of the tax benefit (Quebec refundable tax credits) exceeded $25,000, or the impact on the income of the taxpayer was $100,000 or more.
There is a delay granted for a late-filed form as a result of the policy change of March 2015. Taxpayers have until April 7, 2017 to late-file Form TP-1079. This would impact corporations with an August 31, 2016 year-end and earlier whose tax return was due by February 28, 2017 or earlier. Corporations with a September 30, 2016 year-end should file the Form by March 31, 2017.
Penalties for late filing the form are severe: $10,000 plus $1,000 per day to a maximum of $100,000. Furthermore, Revenue Quebec has another three years, in addition to the normal reassessment period, to review the transactions involved.
If you meet the above conditions, contact your refundable tax credit consultant to ensure they file Form TP-1079 on your behalf.
Otherwise, we would be pleased to assist you in completing the form, and we kindly ask that you contact us to determine the extent to which you would like us to intervene so we may accurately advise you of the associated cost.
A copy of the form may be found here.