How much funding can be received?

Funds up to 24% of admissible expenses.

What is the deadline to apply?

The deadline to apply is not specified.

Who are the financial supporters of the Tax credit for external design in Québec?

Tax credit for external design in Québec is funded by Revenu Québec, Gouvernement du Québec

What are Tax credit for external design in Québec's eligibility criterias?

The corporation must have an establishment in Quebec and operate a business with a gross income of at least $150,000 per year. The corporation must hold an eligibility certificate for an external design activity issued by the Minister of Economy, Innovation and Energy. The corporation cannot be tax-exempt or a Crown corporation, nor a wholly controlled subsidiary of such a corporation.

Tax credit for external design in Québec

Last Update: April 25, 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

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

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.

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.

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.

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.

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.