Tax credit for external design in Québec

• 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.

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.