Investment and innovation tax credit (IITC)

• Form CO-1029.8.36.II, “Investment and Innovation Tax Credit”

Who is eligible?

• Corporations with an establishment in Quebec operating a business during the tax year
• Partnerships acquiring eligible property, with members who are eligible corporations

Who is not eligible

• Companies that are exempt from tax.
• Crown corporations or subsidiaries wholly controlled by such corporations.
• Aluminum production companies.
• Petroleum refining companies.

Eligible expenses

• Capital costs for the acquisition of a "specified property" (bien déterminé), including:
• Manufacturing and processing equipment (category 53 of Schedule B of the Taxation Act Regulations).
• General-purpose electronic data processing equipment and related operating software (category 50 of Schedule B).
• Eligible management software package (category 12 of Schedule B).
• Equipment used primarily for the processing of ore extracted from mineral resources located outside Canada (category 43 of Schedule B).
• Equipment used primarily for smelting, refining, or hydrometallurgical activities involving ores (excluding gold or silver) extracted from mineral resources located in Canada.

Ineligible Costs and Activities

• Expenses related to property acquired from certain related parties, including non-arm’s-length persons and specified shareholders or cooperative members.
• Property acquired before March 11, 2020, or property whose construction started on or before March 10, 2020.
• Property used in a recognized business for the large investment deduction, or used by a company that received an initial certificate for that deduction.
• Property used in an ethanol, biodiesel, or pyrolytic oil production plant.
• For the exclusion threshold, the deductible amount is not fully eligible when annual expenses on the property exceed the applicable exclusion amount.

Eligible geographic areas

• Companies with an establishment and business operations in Quebec.
• Specific credit rates apply depending on whether the asset is primarily used in areas of low, intermediate, or high economic vitality within Quebec.

• The provided information does not describe a formal post-submission review timeline.
• Revenu Québec indicates that the claim is assessed based on the prescribed information filed on form CO-1029.8.36.II.
• If the credit was not granted for the year concerned, a new filing may be accepted under the extended deadline rules described on the page.
• When applicable, the request is treated as a first claim for interest calculation purposes.
• No separate funding agreement, approval notice process, or payment schedule is described in the source content.

• An extension of the deadline for submitting the application form is planned, allowing the submission of form CO-1029.8.36.II until June 30, 2024, or within 183 days following a notice of assessment that refused the credit for a prior year.
• The eligible property must be used in Quebec for a minimum period of 730 consecutive days, except in cases of force majeure (loss, theft, major breakage, accidental destruction, or obsolescence).
• Expenses related to a specific property incurred with persons having a dependency relationship with the corporation or the corporation being a member of a partnership are not eligible in the calculation of the credit.
• The acquisition as part of a joint venture leads to a calculation of the exclusion threshold proportional to the share of the business in the specific property.