Investment and innovation tax credit (C3I)
QC, Canada
Tax credit for investment and innovation in Quebec
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|projectCostPercent
grant_single|deadlines
- grant_single|timelineUnspecified
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- grant_single|allIndustries
grant_single|grantors
- Revenu Québec
grant_single|status
grant_card_status|open
grant_single_labels|preview
The Quebec Investment and Innovation Tax Credit offers a variable credit rate of up to 40% for businesses acquiring eligible assets, depending on the region's economic vitality. The program aims to support the acquisition of new manufacturing and processing equipment, information technology equipment, or management software primarily used in Quebec.
grant_single_labels|terms_and_conditions
This tax credit provides financial incentives depending on the economic vitality of the area where the eligible property is used. The credit rate is adjusted based on specific timeframes of expenditure and acquisition.
- Tax credit rates vary from 10% to 40% depending on the period in which the expenditures were incurred and the economic zone of the asset's primary use.
- The credit rate is highest for assets used in territories with low economic vitality and lowers as the economic vitality of the territory increases.
- Specific conditions allow the acquisition of assets beyond regular timeframes if certain criteria, such as pre-existing written obligations or construction commencements, are met.
- Deductions are subject to exclusions based on the cost thresholds specific to asset categories.
- Annual cumulative ceiling calculations affect the net fiscal benefit obtained from the determined expenses.
grant_single_labels|projects
The Investment and Innovation Tax Credit (C3I) offers support for acquiring certain types of equipment or software in Quebec. It is particularly aimed at enhancing businesses through investments in innovative and operational technologies.
- Acquisition of manufacturing and processing equipment categorized under class 53.
- Procurement of universal electronic data processing equipment or related software under class 50.
- Investment in equipment used for the treatment of minerals extracted outside of Canada, under class 43.
- Purchase of management software packages that are essential for business operations, under class 12.
- Equipment used primarily in smelting, refining, or hydrometallurgical operations, excluding gold or silver mines, within Canada.
grant_single|admissibleProjectsExample
$ 90,000
Acquisition of data processing equipment to upgrade IT infrastructure
$ 125,000
Introduction of advanced automation technology for manufacturing
$ 60,000
Investing in an ERP software system to streamline operations
$ 75,000
Acquiring new CNC machines for precision manufacturing with advanced features
$ 100,000
Upgrading mineral processing equipment at the mining facility
$ 40,000
Procurement of customer relationship management software for enhanced client handling
grant_single_labels|admissibility
A corporation with an establishment in Quebec that operates a business can be eligible for this grant under certain conditions. However, specific entities such as tax-exempt corporations or Crown corporations are not eligible.
- Must have an establishment in Quebec and operate a business there.
- A corporation cannot be tax-exempt.
- A corporation cannot be a Crown corporation or a fully controlled subsidiary of such.
- A corporation cannot be involved in aluminum production or petroleum refining.
- If part of a partnership, the partnership itself must meet eligibility criteria, but the credit will be granted to the corporation members of the partnership.
- The acquired asset must meet specific newness, timing, and utilization requirements.
grant_eligibility_criteria|who_can_apply
To be eligible for the Investment and Innovation Tax Credit, a company must have an establishment in Québec and carry on a business there. However, companies such as tax-exempt corporations, Crown corporations, aluminum production corporations, and petroleum refining corporations are excluded from eligibility.
- Must have an establishment in Québec
- Must carry on a business in Québec
- Exclusively for non-tax-exempt corporations
- Excludes Crown corporations and their fully controlled subsidiaries
- Excludes aluminum production corporations
- Excludes petroleum refining corporations
grant_eligibility_criteria|who_cannot_apply
The Credit for Investment and Innovation has specific exclusions for certain types of companies. The following types of companies are not eligible for this grant:
- Companies exempt from tax.
- Crown corporations or subsidiaries wholly controlled by such corporations.
- Aluminum production companies.
- Oil refining companies.
grant_eligibility_criteria|eligible_expenses
Eligible expenses for this grant include costs associated with acquiring a determined property after March 10, 2020, but before January 1, 2030, which must meet specific criteria.
- Material for manufacturing and processing categorized under Category 53.
- Universal electronic processing equipment falling under Category 50, including operating software.
- Equipment used primarily in the treatment of minerals in Category 43.
- Management software package categorized under Category 12.
- Equipment used mainly in the smelting, refining, or hydrometallurgy of minerals from within Canada, excluding gold or silver.
grant_eligibility_criteria|zone
This tax credit is accessible to companies with an establishment in Quebec where they operate a business. The eligible geographical areas for varying credit rates depend on the economic vitality of the area where the acquired property will primarily be used.
- Low economic vitality territories in Quebec are eligible for the highest credit rate.
- Intermediate economic vitality areas in Quebec are eligible for a mid-range credit rate.
- High economic vitality territories in Quebec qualify for the basic credit rate.
grant_single_labels|register
- Step 1: Verify Eligibility
- Ensure the company has an establishment in Québec and operates a business there
- Confirm that the company is not exempt from tax, a Crown corporation, a subsidiary fully controlled by a Crown corporation, a production company of aluminum, or a petroleum refining company
- Step 2: Identify Eligible Expenses
- Determine if the expenses incurred qualify as "determined expenses" for acquiring an eligible asset
- Ensure the asset was acquired within the specified date range and meets the definition of a determined asset
- Calculate the determined expenses minus the amount of excluded expenses
- Step 3: Complete Form CO-1029.8.36.II
- Fill out the Crédit d'impôt pour investissement et innovation (CO-1029.8.36.II) form with all prescribed information
- Step 4: Submit Application
- If the year in which expenses were incurred ends before January 8, 2023, submit the form by the latest of:
- The 183rd day after receiving a notice of assessment or reassessment indicating ineligibility because the credit was not claimed in the year expenses were incurred
- Step 5: Compliance and Reporting
- Ensure that the acquired asset is used primarily in Québec, for a minimum period of 730 consecutive days following the start of its use by the eligible company, except in cases of loss, major damage, or involuntary destruction
- Maintain necessary records to demonstrate compliance with the requirements
grant_single_labels|otherInfo
The grant includes specific requirements and details for determining the eligibility and calculation of the credit.
- The credit's percentages vary based on the time when expenses were incurred and the territory's economic vitality where the property is primarily used.
- There are different financial periods and percentages applicable, notably for expenses incurred from March 26, 2021, to December 31, 2023.
- The conditions for a "determined property" include being new, used primarily in Quebec, and not for use by specific excluded enterprises.
- Prolongation of the deadline for filing the tax credit application form CO-1029.8.36.II is now possible under specified conditions.
- A new calculation method for exclusive expenses and a cumulative annual ceiling have been introduced as part of the credit's determination process.
