Tax credit for external design in Québec
Last Update: July 22, 2025
QC, Canada
Tax credit for a design activity carried out by an outside consultant
Tax credit for external design in Québec at a glance
Eligible Funding
- Up to 24% of project cost
Timeline
- Open Date : November 14, 2019
Financing Type
Tax Credits
Eligible Industries
- Manufacturing
Grant Providers
- Revenu Québec
- Gouvernement du Québec
Program status
Open
Overview of the Tax credit for external design in Québec program
Tax credit of 12% to 24% on the cost of external design activities (salary costs up to $60,000 for a designer and $40,000 for a pattern maker) or 65% of contract fees admissible on the cost of external design activities by a consultant.
Financing terms and conditions
- The tax credit rate varies according to the total assets of the company: 24% if the total assets, including those of associated companies, are equal to or less than 50 million dollars;
- 12% if the total assets are equal to or greater than 75 million dollars;
- Progressive rate between 12% and 24% for total assets between 50 and 75 million dollars.
Eligible projects & activities
- Design activities carried out externally under a contract with an eligible external consultant.
- Pattern drawing activities (activité de dessin de patron) performed under a contract with an eligible external consultant.
Examples of admissible projects:
$ 45,600
Developing eco-friendly packaging designs for new product line
$ 38,700
Improving urban mobility through innovative bicycle design
$ 27,300
Developing inclusive user interface designs for a new app
Eligibility criteria of the Tax credit for external design in Québec program
- The company must operate a business establishment in Quebec.
- The company must have a gross annual income of at least $150,000.
- The company must obtain a certificate of eligibility from the Minister of Economy, Innovation and Energy for an external design activity, for the taxation year.
- The eligible design activity must be carried out under a contract with an eligible external consultant.
Who is eligible?
- Corporations operating a business in Quebec with a gross annual income of at least $150,000
- Corporations with an establishment in Quebec
- Corporations that hold an eligibility certificate for an external design activity issued by the Minister of Economy, Innovation and Energy
- Corporations that are not tax-exempt or Crown corporations (or wholly controlled subsidiaries of Crown corporations)
Who is not eligible
- Tax-exempt corporations.
- Crown corporations or wholly controlled subsidiaries of such corporations.
Eligible expenses
- If the applicant company has a non-arm’s length relationship with the eligible external consultant: portion of the contract cost attributable to the salaries paid by the external consultant to an eligible designer (up to $60,000 per year) or to an eligible pattern maker (up to $40,000 per year), both holding a qualification certificate and working at a Quebec establishment.
- If the applicant company has an arm’s length relationship with the eligible external consultant: 65% of the contract cost attributable to eligible design or pattern making activities performed under the contract by the external consultant in Quebec, for the company’s benefit.
Eligible geographic areas
This grant is available to companies that have a physical presence and conduct business in Quebec. The eligibility is restricted to those operating within this specific region.
- Companies with an establishment in Quebec.
How to apply to the Tax credit for external design in Québec program
1
Obtain the necessary certificates
- Request and obtain a certificate of eligibility for external design activities from the Minister of Economy, Innovation, and Energy.
- Obtain the qualification certificate for each eligible external consultant involved.
2
Preparation of the required documents
- Fill out the Tax Credit form for carrying out an external design activity (CO-1029.8.36.5).
- Attach a copy of the eligibility certificate obtained.
- Attach copies of the qualification certificates of eligible external consultants.
3
Gather the required documents
- Prepare an organizational chart of the associated companies and related individuals or partnerships.
- Collect copies of invoices from eligible external consultants and proof of payment along with their NEQ or NAS.
- Establish a list of eligible external consultants.
- Establish a list of employees from each eligible external consultant who participated in the project.
- Obtain a copy of the contract or agreement with each eligible external consultant.
- Provide proof of the inclusion of the tax credit in the company's income calculation for the tax year, if applicable.
4
Registration of information in the declaration
Enter the name of the tax credit, its code (10), and its amount in the appropriate lines of the tax return.
5
Transmission of documents
- Attach all copies of the CO-1029.8.36.5 form and the certificates to the tax return.
- Send the documents by Internet via authorized software or by mail.
- Ensure that the documents sent by mail mention the company name, its identification and file numbers, as well as the financial year-end date.
- If sending by mail, prefer a single shipment to expedite processing.
Additional information
Here are additional relevant details for this grant:
- The maximum annual salary considered for eligible designers is $60,000, and for patternmakers, it is $40,000.
- Documents can be submitted via authorized internet software, which negates the need for paper submissions.
- On mailed documents, include the company name, identification numbers, and fiscal year-end date.
- All documents should ideally be submitted in one package to expedite processing.
- If necessary attestation documents are delayed, applications will be processed only upon receipt of these attestations, even if they arrive past the deadline.
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