How much funding can be received?

Funds up to 30% of admissible expenses, capped at $3000000 per project.

What is the deadline to apply?

The deadline to apply is not specified.

Who are the financial supporters of the Tax credit for R&D labour costs?

Tax credit for R&D labour costs is funded by Revenu Québec, Gouvernement du Québec

What are Tax credit for R&D labour costs's eligibility criterias?

Must operate a business in Canada Must carry out or contract R&D activities in Quebec Must not be a tax-exempt, Crown, or controlled research entity

Tax credit for R&D labour costs

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QC, Canada

Tax credit for R&D in Quebec

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grant_single|openingDate November 14, 2019

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Tax Credits

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Professional, scientific and technical services

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Revenu Québec
Gouvernement du Québec

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Get a tax credit between 14 and 30% of labour costs for your scientific research and experimental development expenditures.

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Base tax credit rate of 14% on eligible R&D labour costs.
Enhanced rate up to 30% for companies not controlled by non-residents, with a previous year total asset value of $50 million or less. This enhanced rate applies to eligible expenses up to $3 million.
If total assets are between $50 million and $75 million, the enhanced rate is reduced linearly.
Minimum exclusion threshold is generally $50,000, increasing linearly for companies with assets between $50 million and $75 million, and set at $225,000 for assets of $75 million or more.

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Conducting scientific research and experimental development (R&D) projects in Quebec.
Collaborative R&D activities carried out on behalf of the company.

grant_single|admissibleProjectsExample

$ 180,000

Developing advanced cybersecurity measures for financial institutions

$ 120,000

Creation of eco-friendly materials via chemical research

$ 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

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The company must operate a business in Canada.
The company must perform or have performed scientific research and experimental development (R&D) activities in Quebec for its own account.
The company must pay eligible R&D salaries and certain amounts to third parties for eligible R&D work performed in the relevant fiscal year.

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Corporations operating a business in Canada
Companies conducting or commissioning scientific research and experimental development (R&D) in Quebec

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Companies that are exempt from tax.
Crown corporations or subsidiaries wholly controlled by a Crown corporation.
Companies controlled, directly or indirectly, by a prescribed research entity, or that were controlled by such an entity within the past 24 months, or companies related to such controlled companies.

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Salaries paid to employees of the company for R&D work performed in Quebec during the year.
Portion of payments made to subcontractors with whom the company has a dependent relationship, corresponding to salaries paid to their employees for R&D services performed in Quebec.
Portion of payments made to subcontractors with whom the company has a dependent relationship, further subcontracted to other dependent subcontractors, corresponding to salaries paid for R&D work performed in Quebec.
Half of payments made to independent (non-dependent) subcontractors for R&D work performed by their employees in Quebec.
Half of the portion of payments made to dependent subcontractors who then subcontract to independent parties, corresponding to R&D work carried out for the company in Quebec.

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Companies conducting scientific research and experimental development (R&D) in Quebec.

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Preparation of documents

Fill out the Tax Credit form related to salaries – R&D (RD-1029.7).
Fill out the Deduction of Expenses Incurred for Scientific Research and Experimental Development form (RD-222).
If necessary, complete the Agreement on the Expense Limit between Associated Corporations form (RD-1029.7.8).
Prepare a document detailing the expenses incurred.
Gather the supporting documents for the expenses.
Develop a list of employees with their name, social insurance number, hourly wage, and time dedicated to R&D activities.
Establish a list of contractors with their name, address, and amount paid.
Collect invoices and proof of payment from contractors.
Prepare a reconciliation of R&D expenses.
Develop organizational charts for the company and associated companies.
Include a copy of the notice of assessment issued by the Canada Revenue Agency for the previous year.
Prepare a document explaining the discrepancies between certain tax amounts if applicable.
Include the federal form T661 for the previous and current year.
Provide the roles and responsibilities of employees who received R&D support salaries.
Include time sheets and calculation methods for the allocation of support salaries.
Provide proof of the inclusion of the tax credit amount in the company's income, if applicable.

Entry of information in the tax return

Enter the name of the tax credit and its code (02) as well as its amount in lines 440p to 440y of the income tax return.

Transmission of the declaration and documents

Attach forms RD-1029.7, RD-222, and RD-1029.7.8, if applicable, to the tax return.
Include all required documents and submit them simultaneously to expedite processing.
Send the return and documents via the Internet if the functionalities of the software used allow it; otherwise, send them by mail.
Ensure to include the company's name, its identification and file numbers, as well as the fiscal year's closing date on each document sent by mail.

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Supporting documents must be submitted in a single package for quicker processing.
Paper submissions require clear identification of the company, including name, identification and file numbers, and fiscal year-end date on each document.
If documents cannot be attached to the tax return, they must be sent within 12 months after the deadline for filing the return.
Internet submission via authorized software is possible, in which case paper documents are not required.