Tax credit for shipbuilding

Who is eligible?

• Companies operating a shipbuilding business with an establishment in Quebec

Who is not eligible

• Companies that are exempt from paying income tax for the fiscal year in question.
• Crown corporations or wholly owned subsidiaries of such corporations.

Eligible expenses

• Cost of plans and specifications for the construction of the eligible vessel (including the portion carried out in Quebec if the work is not fully performed by the applicant company).
• Salaries related to the preparation of plans and specifications, as long as these are assignable to a Quebec establishment.
• Salaries of employees directly involved in the construction or transformation of the vessel.
• Labour costs attributable to the direct construction or transformation work on the vessel.

Eligible geographic areas

• Quebec

• Step 1: Obtain Certificate of EligibilityRequest a certificate of eligibility from the Ministère de l'Économie, de l'Innovation et de l'Énergie before signing a final contract with the client.
• Prepare a summary project description and preliminary estimate of the vessel's gross tonnage.
• Gather and submit preliminary plans and specifications.
• Optionally request a pre-eligibility opinion to assess if the project may qualify.
• Send your completed application and supporting documents to certificat-maritime@economie.gouv.qc.ca.
• Step 2: Obtain Ship Certificate (after contract signature)After signing the ship construction contract, prepare and submit the following:
• Copy of the signed construction contract.
• Copy of the plans and specifications included in the contract.
• Comparison to current market prices if the armateur (client) is a related corporation.
• Completed and signed application form justifying eligibility.
• Send your completed application and supporting documents to certificat-maritime@economie.gouv.qc.ca.
• Step 3: Complete Tax Credit Forms and Prepare DocumentsFill out the prescribed tax credit form (CO-1029.8.36.55).
• Obtain and attach a copy of the certificate(s) issued by the ministère for each eligible vessel.
• Compile all required prescribed documents for the tax credit application.
• Prepare and retain additional required documents that must be made available on request.
• Step 4: File the Application with Revenu QuébecReport the credit on the applicable line in the corporate income tax return (lines 440p to 440y), including the credit name, code (14), and amount.
• Attach all prescribed documents to the corporate tax return, either electronically (if software allows) or by mail.
• If sending by mail, ensure each document is marked with the company name, identification numbers, and fiscal year-end.
• Submit all documents together in a single package if possible to expedite processing.
• Step 5: Meet Submission DeadlinesEnsure the prescribed form is submitted by the later of:
• Twelve months after the tax return filing deadline.
• Three months after the required certificate is issued.
• Requests will be processed once all required certificates are received, even if submitted after the deadline, as long as the form was submitted in time.

• The eligibility certificate is valid for up to three years from the date of application submission.
• Projects must commence no later than two years after the issuance of the eligibility certificate.
• Any request to renew the eligibility certificate may require revisions and updated documentation from the original submission.
• There are no application or processing fees for the eligibility certificate or related requests.