Incentive deduction for the commercialization of innovations (IDCI)

• The company must have an establishment in Québec and operate a business there.
• The company must generate income from the commercialization of a qualifying intellectual property (IP) asset.
• The qualifying IP asset must result from research and development (R&D) activities carried out in whole or in part in Québec that significantly contributed to its creation, development, or improvement.

Who is eligible?

• Corporations with an establishment in Québec carrying on a business in Québec
• Corporations earning income from the commercialization of a qualifying intellectual property asset (such as protected inventions, software, or plant varieties)

Who is not eligible

• Companies that do not have an establishment in Québec or do not carry on business in Québec.
• Corporations that do not earn income from the commercialization of a qualifying intellectual property asset.

Eligible expenses

• Research and development (R&D) expenditures directly contributing to the creation, development, or improvement of a qualifying intellectual property asset carried out in whole or in part in Quebec.
• Expenses attributable to R&D activities that are reasonably allocable to Quebec establishments.

Eligible geographic areas

• Quebec

• The IDCI applies a reduced effective tax rate of 2% on the qualifying portion of corporate income derived from the commercialization of eligible intellectual property assets.
• To benefit from the IDCI, corporations must complete and attach form CO 737.18.CI to their corporate income tax return.
• The calculation of the deduction involves specific formulas and ratios that factor in R&D expenditures in Quebec, with requirements for detailed documentation.
• The measure is accompanied by ongoing changes and updates, so applicants should consult the latest official documents and bulletins to ensure compliance with current legislation.