Development of E-Business Tax Credit
QC, Canada
Tax credit for development of a Quebec e-business
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|maxCount
grant_single|deadlines
- grant_single|openingDateNovember 14, 2019
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- Information and cultural industries
- Finance and insurance
- Professional, scientific and technical services
grant_single|grantors
- Gouvernement du Québec
- Investissement Québec (IQ)
grant_single|status
grant_card_status|open
grant_single_labels|preview
Tax credit of 30% (24% refundable and 6% non-refundable) for information technology (IT) sector salaries up to a maximum of $25,000 per employee working on e-business activities.
grant_single_labels|projects
This tax measure is specifically designed for companies operating within the province of Québec, as indicated by the requirement for activities to be performed in an establishment located in Québec.
- Corporations operating in an establishment located in Québec.
grant_single|admissibleProjectsExample
$25,000
Implement a new e-commerce platform for small and medium-sized businesses in Montreal.
$25,000
Enhance IT infrastructure for a network of cooperative businesses in Quebec City.
$25,000
Develop cybersecurity solutions for enhancing e-commerce activities in Laval.
grant_single_labels|admissibility
To be eligible for the tax credit, corporations must meet certain activity and employment requirements specified by Investissement Québec.
- Your corporation must operate primarily in the fields of information system design or software publishing within Québec.
- At least 75% of the corporation's activities must be in the IT sector, with at least 50% of these activities designated by NAICS codes 541514, 541515, 511211, 511212 and, under certain conditions, 561320 and 561330.
- At least 75% of the activities covered by the relevant NAICS codes must provide services to persons with whom the corporation is at arm's length or services for applications used exclusively outside Québec.
- The corporation must employ at least six eligible full-time employees throughout the taxation year.
- Specific rules apply to transfers of activities and business start-ups in Québec.
grant_eligibility_criteria|who_can_apply
Corporations conducting e-business activities in the IT sector within Québec are eligible for this tax credit. Specifically, eligible corporations are those primarily involved in information system design or software publishing and conducting businesses in Québec establishments. These corporations must have at least 75% of their activities in the IT sector and meet additional NAICS code requirements, along with maintaining a minimum of six full-time employees involved in eligible tasks.
grant_eligibility_criteria|who_cannot_apply
This tax credit is specifically tailored for corporations active in the IT and e-business sectors. Certain types of companies and industries, particularly those not engaged in IT-related activities, are not eligible for this credit.
- Companies not primarily engaged in IT sector activities as defined by specific NAICS codes.
- Businesses where less than 75% of activities are in eligible IT fields.
- Corporations that do not maintain a minimum of six eligible full-time IT employees.
- Companies involved in non-IT administrative tasks.
- Industries focused on marketing information systems for visibility and promotion purposes.
- Firms operating customer relations centers without direct IT development involvement.
- Businesses carrying out hardware installation and training activities as primary services.
- Operations centered around managing e-commerce infrastructures rather than development.
- Companies executing e-transactions as a service rather than developing the infrastructure.
grant_eligibility_criteria|eligible_expenses
Eligible activities under this tax credit aim to support IT consulting services, systems development, and e-business solutions in Québec's IT sector. These projects involve advanced technological integration and security developments aligned with digital commerce.
- IT consulting services related to the development, integration, maintenance, or evolution of information systems or technology infrastructure.
- Design or development of e-commerce solutions facilitating monetary transactions between businesses and their customers.
- Development of security and identification services, including electronic imaging and artificial intelligence, in relation to e-commerce activities.
grant_eligibility_criteria|zone
The tax credit is designed to cover eligible salaries of employees involved in innovative IT activities.
- Eligible salaries paid to employees engaged in eligible activities within the maximum annual limit of $83,333 per employee.
grant_single_labels|criteria
The evaluation and selection criteria for this grant are as follows:
- Innovation and added value of activities in the information technology (IT) sector
- Impact on Quebec's technological and economic development
- Capacity and skills of the project team
- Potential for job creation in Quebec
- Financial viability and project implementation plan
grant_single_labels|register
- Step 1: Contact an Advisor
- Reach out to an Investissement Québec advisor via their hotline 1 844 474-6367.
- Request guidance on the application process and obtain links to the necessary application forms for eligibility certificates.
- Step 2: Complete the Applications
- Fill out the corporation certificate and employee certificate applications for the relevant taxation year.
- Ensure all required information and documentation are accurately provided to prevent processing delays.
- Step 3: Submit Applications
- Send the completed applications for the corporation and employee certificates to Investissement Québec for review.
- Step 4: Await Confirmation of Eligibility
- Wait for Investissement Québec to review your submission and confirm eligibility status.
- Step 5: Apply for Refundable Credits (Optional)
- If desired, reach out to an Investissement Québec financing expert at 1 844 474-6367 to discuss financing options for your refundable tax credits.
grant_single_labels|otherInfo
Here are some additional relevant details for applicants of this tax credit program:
- The tax credit amount is subject to change, with the non-refundable tax credit portion increasing to 10% and the refundable portion decreasing to 20% by 2028.
- Applicants will need to account for an exclusion threshold per eligible employee when calculating the tax credit from 2025 onwards.
- The $83,333 wage limit for eligible employees will be removed starting from the 2025 taxation year.
- There is a fees schedule for processing eligibility certificate applications, which can be found on Investissement Québec's website.
- Financing options for refundable tax credits are available, which can help improve cash flow before receiving the credit itself.
- English applications are supported, but forms must be submitted in French only.
Apply to this program
Tax Credit for Innovative E-Business Development in Québec
The Québec government offers a tax credit initiative aimed at supporting IT corporations conducting e-business activities. The tax credit benefits innovative, high-value-added IT activities, providing corporations an annual tax credit of up to $25,000 per eligible employee.
Exploring the Benefits and Structure of the E-Business Tax Credit
The Tax Credit for the Development of E-Business is a strategic measure undertaken by the Québec government to stimulate growth and innovation within the province’s burgeoning IT sector. By offering financial benefits to specialized corporations deeply involved in IT-related activities, Québec is setting the stage for technological advancements and economic expansion. This initiative not only enhances the operational capabilities of participating corporations but also underscores Québec’s commitment to fostering an environment conducive to technological advancements and digital transformation. The tax credit applies to salaries paid to eligible employees, providing both refundable and non-refundable credit options at combined rates to maximize the financial support for companies operating in this critical sector.
Corporations can access a tax credit equating to 30% of the eligible salaries paid to their employees involved in e-business activities, making it a substantial incentive for companies focusing primarily on IT system design and software publishing within Québec. Businesses need to demonstrate a predominant focus on these sectors, substantiated through the fulfillment of activity percentages specified by the North American Industry Classification System (NAICS) codes. Moreover, the employment criterion requires that these entities maintain a steady operational workforce with at least six full-time eligible employees engaged in integral IT tasks. These include system development, IT consulting, technology integration, and the development of e-commerce solutions and security services focused on outside projects and initiatives beyond traditional marketing scopes.
This program not only assists in reducing the operational costs of engaging specialized IT professionals but also increases the overall ability of corporations to remain agile, innovative, and competitive on a global scale. As part of their eligibility processes, companies must work closely with Investissement Québec to obtain necessary certificates annually, ensuring their qualification adherence for the taxation year. Thus, alongside the tangible financial benefits, this sustained interaction allows for insightful assessments of corporate activities against evolving industry standards and governmental requirements.
As organizations evaluate their potential participation, they also need to be aware of the evolving rules and fiscal thresholds outlined by Québec's fiscal policies for 2025 and beyond. These include the intended cap modifications on eligible salaries, exclusions methodologies based on personal tax credits, and phased balancing of refundable and non-refundable tax components, aiming to enhance the effective utilization of allocated public funds. For experts navigating through the intricacies of Québec's tax incentives, these proactive adjustments hold opportunities for ongoing financial planning and strategic alignment with broader economic objectives.
In summary, the Tax Credit for the Development of E-Business stands as a vital initiative endorsing Québec’s IT sector by financially empowering corporations to invest in innovation and enhance their competitive edge, driving forward the region’s economic and digital evolution. Through its structured support, eligible IT corporations can leverage these tax credits to scale their operational capacities, develop cutting-edge solutions, and contribute significantly to the region’s socio-economic progress.
