Tax credit for R&D labour costs
QC, Canada
Tax credit for R&D in Quebec
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|maxCount
- grant_single|projectCostPercent
grant_single|deadlines
- grant_single|openingDateNovember 14, 2019
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- Professional, scientific and technical services
grant_single|grantors
- Revenu Québec
- Gouvernement du Québec
grant_single|status
grant_card_status|open
grant_single_labels|preview
<p>Get a tax credit between 14 and 30% of labour costs for your scientific research and experimental development expenditures.</p>
grant_single_labels|projects
This grant is available for companies conducting R&D activities in the province of Quebec, Canada. Eligibility is based on location to enhance regional R&D contributions.
- Companies operating in the province of Quebec, Canada.
grant_single|admissibleProjectsExample
$ 120,000
Creation of eco-friendly materials via chemical research
$ 180,000
Developing advanced cybersecurity measures for financial institutions
$ 200,000
R&D in renewable energy technology enhancement
$ 150,000
Development of AI algorithms for medical diagnosis improvements
$ 140,000
Improvement of agricultural biotech processes for crop yield
$ 160,000
Innovative software solutions for smart home systems
grant_single_labels|admissibility
Eligibility for the CRÉDIT D'IMPÔT RELATIF AUX SALAIRES – R-D is determined by specific criteria relating to the company and its activities.
- The company must operate a business in Canada.
- The company must conduct or have conducted scientific research and experimental development (R-D) work on its behalf in Quebec.
- The company must not be tax-exempt.
- The company must not be a Crown corporation or a wholly-controlled subsidiary of such a corporation.
- The company must not be controlled, directly or indirectly, by a prescribed research entity, nor should it have been within the 24 months preceding the conclusion of an R-D related contract, nor should it be related to such a controlled company.
- If the company is a member of a partnership, it can claim the credit for its share of the salaries paid by the partnership.
grant_eligibility_criteria|who_can_apply
This grant is available to companies operating a business in Canada that conduct or have R&D work conducted on their behalf in Quebec. These companies must meet specific conditions, including financial thresholds and control requirements.
- Corporations that operate a business in Canada.
- Entities conducting or commissioning R&D work in Quebec.
- Corporations not controlled by non-residents of Canada to qualify for the higher credit rate.
- Companies with total assets under 75 million CAD for the preceding tax year to qualify for the higher credit rate.
- Excludes corporations exempt from tax, Crown corporations, or subsidiaries fully controlled by such corporations.
- Excludes corporations controlled by a prescribed research entity in the last 24 months.
grant_eligibility_criteria|who_cannot_apply
Certain companies are not eligible for the CRÉDIT D'IMPÔT RELATIF AUX SALAIRES – R-D due to their tax status and control structure. These restrictions focus on ensuring eligible entities contribute actively to R&D activities in Quebec.
- Tax-exempt corporations.
- Crown corporations or subsidiaries wholly controlled by a Crown corporation.
- Companies controlled, directly or indirectly, by a prescribed research entity or those that were in the 24 months preceding an R&D contract.
grant_eligibility_criteria|eligible_expenses
This grant supports research and development (R&D) activities across various fields, as long as the work is conducted in Quebec. Eligible projects must involve scientific research and experimental development initiatives, as well as related subcontracted work.
- Scientific research and experimental development (SR&ED) conducted directly by the company within Quebec.
- Contracted SR&ED work carried out by dependent subcontractors within Quebec, focusing on salaries of employees in Quebec-based establishments.
- Subcontracted work by independent subcontractors within Quebec, partially funded by the company under R&D contracts.
grant_eligibility_criteria|zone
The eligible expenses for this grant include specific salaries and payments to subcontractors related to R&D work conducted in Quebec.
- Salaries paid to employees working in a Quebec establishment for R&D activities conducted during the year.
- Portion of the consideration paid under an R&D contract to a dependent subcontractor for R&D work performed on behalf of the company during the year, corresponding to salaries paid to the subcontractor's Quebec-based employees.
- Portion of the consideration, paid under an R&D contract to a dependent subcontractor and subsequently paid to another dependent subcontractor, attributed to salaries of the latter's Quebec-based employees.
- Half of the consideration paid under an R&D contract to an independent subcontractor for R&D work conducted on behalf of the company by the subcontractor's Quebec-based employees.
- Half of the consideration paid under an R&D contract to a dependent subcontractor, and subsequently paid to an independent subcontractor, for R&D work conducted on behalf of the company by the latter's Quebec-based employees.
grant_single_labels|register
Here are the steps to apply for the CRÉDIT D'IMPÔT RELATIF AUX SALAIRES – R-D:
- Step 1: Gather Necessary Documents
- Fill out the form RD-1029.7 for the Credit on Salaries – R&D.
- Fill out the form RD-222 for the Deduction of SR&ED Expenditures.
- If applicable, fill out the form RD-1029.7.8 for the Agreement on Expense Limit Among Associated Corporations.
- Collect a detailed report of incurred expenses and supporting documents.
- Compile a list of employees involved with their information.
- Prepare a list of subcontractors with necessary financial details.
- Gather invoices and proof of payments to subcontractors.
- Create reconciliations of R&D expenses.
- Develop organizational charts for the company and associated companies.
- Include prior year’s tax notice from the Canada Revenue Agency.
- Collect additional required documents as specified.
- Step 2: Complete Tax Declaration
- Enter the credit name in the appropriate lines (440p to 440y) on the tax declaration.
- Include the credit code (02) and amount in the specified fields.
- Step 3: Submit the Tax Declaration
- Attach all forms and documents to the corporation’s tax return for the year.
- If unable to attach, send the documents within 12 months post the tax return deadline.
- Use authorized software to transmit documents electronically if desired.
- If mailing, clearly label all documents with the company’s name, IDs, and fiscal year-end.
- Aim to submit all documents in one package for faster processing.
grant_single_labels|otherInfo
Here are additional relevant details for this grant application:
- The application must include proof of payment for all claimed salaries and subcontractor expenses at the time of application.
- A reconciliation of R&D expenditures is required to verify the amount submitted for the tax credit.
- Consideration must be given to reducible expenses, which may diminish the total eligible amount claimed under the tax credit.
- If companies are associated, they must agree on how to distribute the $3 million expense limit eligible for the increased tax credit rate and submit a "Schedule of Expense Limit Allocation among Associated Corporations (RD-1029.7.8)."
- If documents cannot be submitted with the tax return, they should be provided within 12 months of the tax return’s filing deadline.
- The process is streamlined if documents are submitted online using authorized software, negating the need for physical document submission.
