Tax credit for design in Quebec
QC, Canada
Tax credit for a desing activity carried out by an outside consultant
grant_single|update February 27, 2025
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|projectCostPercent
grant_single|deadlines
- grant_single|openingDateNovember 14, 2019
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- Manufacturing
grant_single|grantors
- Revenu Québec
- Gouvernement du Québec
grant_single|status
grant_card_status|open
grant_single_labels|preview
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.
grant_single_labels|terms_and_conditions
This tax credit for companies undertaking design activities in Quebec provides variable funding rates based on the company's total asset value. Companies can receive a percentage of their eligible expenses back as a tax credit.
- For companies with total assets equal to or less than $50 million, the tax credit rate is 24%.
- For companies with total assets equal to or greater than $75 million, the tax credit rate is 12%.
- For companies with total assets between $50 million and $75 million, the tax credit rate varies between 12% and 24%.
- Eligible expenses must relate to salaries paid to designers and pattern makers working in Quebec under specific conditions.
- Eligible expenses differ based on whether the company has a dependency relationship with the external consultant.
- For companies without a dependency link, eligible expenses comprise 65% of the contract's portion attributable to design activities.
grant_single_labels|projects
The tax credit for design in Quebec is available for eligible design activities carried out under contracts with external consultants. The focus is on supporting design collaborations that contribute to the economic ecosystem in Quebec.
- Activities of design conducted by an external consultant as per the contract terms.
- Design drawing activities executed by the eligible consultant located in Quebec.
grant_single|admissibleProjectsExample
$ 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
grant_single_labels|admissibility
Eligibility for this grant is determined by specific criteria related to the company's profile and activities.
- The company must have an establishment in Quebec and operate a business with a gross income of at least $150,000 annually.
- The company must obtain a certificate of eligibility for an external design activity issued by the Minister of Economy, Innovation and Energy.
- The company should not be a tax-exempt corporation.
- The company should not be a Crown corporation or a wholly controlled subsidiary of such a corporation.
- If the company is a member of a partnership, it can claim the tax credit for its share of the expenses incurred by the partnership.
grant_eligibility_criteria|who_can_apply
Yes, there are eligible types of companies for this grant. The company must operate an establishment in Quebec and generate a minimum annual gross revenue of $150,000.
- Company must have an establishment in Quebec.
- Annual gross revenue requirement of at least $150,000.
- Not exempt from taxes, nor a Crown corporation or its wholly controlled subsidiary.
- Holds a certificate of eligibility from the Minister of Economy, Innovation, and Energy for external design activities.
grant_eligibility_criteria|who_cannot_apply
This grant is not available to certain companies based on their tax status and ownership structure. The restrictions focus on directing funds only to taxable and non-governmental entities.
- Companies that are exempt from tax.
- Crown corporations or subsidiaries wholly controlled by such corporations.
grant_eligibility_criteria|eligible_expenses
This grant is designed to support companies engaging in external design activities that involve a qualified external consultant. Eligible projects or activities are those that a company undertakes via a contract with an external consultant for design work in Quebec.
- Design activities conducted under a contract with an eligible external consultant.
- Pattern drawing activities conducted under a contract with an eligible external consultant.
grant_eligibility_criteria|zone
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.
grant_single_labels|register
Here are the steps to submit an application for this grant:
- Step 1: Gather Necessary Documentation
- Complete the form "Crédit d'impôt pour la réalisation d'une activité de design à l'externe" (CO-1029.8.36.5).
- Obtain a copy of the eligibility certificate issued by the Minister of Economy, Innovation, and Energy for the design activity.
- Secure a copy of the qualification certificate for each eligible external consultant from the Minister of Economy, Innovation, and Energy.
- Step 2: Additional Required Documents
- Prepare an organizational chart of associated companies and related persons or partnerships.
- Collect copies of invoices from eligible external consultants and proof of payments showing their Quebec Enterprise Number (NEQ) or Social Insurance Number (SIN).
- List names of eligible external consultants and their employees who performed the work.
- Attach a copy of the contract or agreement with each eligible external consultant.
- Provide proof that the company’s income calculation for the year includes the credit amount for any previous years, if applicable.
- Step 3: Complete Income Tax Return Entries
- Enter the name of the tax credit on one of the lines 440p to 440y of the income tax return.
- Include its code (10) and amount in the designated spaces.
- Step 4: Submission of Application
- Attach all copies of the form CO-1029.8.36.5 to the company’s income tax return for the fiscal year.
- Include copies of all relevant certificates issued by the Minister of Economy, Innovation, and Energy.
- If unable to attach documents to the income tax return, submit them by mail before the latest of: 12 months after the tax return deadline or 3 months after issuance of the necessary certificates.
- Step 5: Final Covering Considerations
- Ensure all documents required are provided to facilitate processing.
- Submit all documents in one package for faster processing.
- Optionally, transmit documents via the Internet using authorized software, eliminating the need for paper copies.
- Include the company's name, identification numbers, and fiscal year-end date on postal submissions.
grant_single_labels|otherInfo
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.
