Development of E-Business Tax Credit
Highlights
This program is designed for businesses like yours in the IT sector. It offers a tax credit of up to $25,000 per eligible employee annually. This can significantly reduce your tax burden and free up funds for other critical investments.
Why Apply?
- 30% tax credit on eligible salaries, with 24% refundable and 6% non-refundable.
- No limit on qualified wages starting in 2025, maximizing your potential savings.
- Annual increase in the non-refundable tax credit rate, reaching 10% by 2028.
What's in It for You?
- Boost your cash flow by applying for financing for refundable tax credits.
- Support for innovative activities in IT, helping you stay competitive.
- Easy qualification if your business meets the criteria, ensuring you can benefit without hassle.
Applying for this program can provide substantial financial relief and support your business's growth and innovation.
Financing Details
Type of Financing: Tax Credit
Repayment Terms and Interest Rates:
- No repayment is required as this is a tax credit.
- The tax credit is equal to 30% of eligible salaries paid to employees, with 24% being refundable and 6% non-refundable.
Eligible Expenses:
- Salaries paid to eligible employees involved in IT consulting services, systems development, e-business processes, and solutions.
- Development and integration of information systems, technology infrastructure, and e-commerce solutions.
- Development of security and identification services related to e-commerce activities.
Ineligible Uses:
- Operation of e-business solutions and customer relations centers.
- Management or operation of information systems, applications, or infrastructures.
- Hardware installation, training activities, and administrative tasks.
- Marketing information systems designed to increase visibility and promote goods and services.
Fees:
- Fees are charged for the analysis of eligibility certificate applications. For more information, contact an Investissement Québec advisor or see the rates schedule on their website.
Qualifications
- Must be a specialized corporation in the IT sector.
- Must carry out activities primarily in information system design or software publishing.
- Activities must be conducted in an establishment in Québec.
- At least 75% of the corporation's activities must be in the IT sector.
- At least 50% of these activities must be covered by NAICS codes 541514, 541515, 513211, 513212, and under certain conditions, 561320 and 561330.
- At least 75% of activities covered by these NAICS codes must include services provided to persons with whom the corporation is at arm’s length or services relating to applications used exclusively outside Québec.
- Must maintain a minimum of six eligible full-time employees at all times during a given taxation year.
Employees must hold a full-time job and devote at least 75% of their time to eligible activities.
Disqualifications:
- Operation of an e-business solution.
- Management or operation of information systems, applications, or infrastructures arising from e-commerce activities.
- Operation of a customer relations center.
- Hardware installation and training activities.
- Activities not related to e-business.
- Administrative tasks.
- Activities related to marketing information systems designed to increase visibility and promote goods and services to customers.
Description
This program offers your business a tax credit to support the development of information technologies (IT) in Québec. You can receive up to $25,000 per eligible employee each year. This money can be used to pay salaries for employees working on IT projects like system design, software publishing, and e-commerce solutions.
The tax credit covers 30% of eligible salaries—24% is refundable, meaning you get that portion back even if you owe no taxes, and 6% is non-refundable, which reduces your tax bill. To qualify, your business must be primarily involved in IT activities and based in Québec.
This program is a great way to reduce costs and invest in your IT workforce. By participating, you can enhance your business's technological capabilities while benefiting from significant financial support.
Program Steps
Gather Required Documentation: Prepare the following documents to support your application:
- Financial statements
- Business plan
- Details of eligible employees (including job descriptions and percentage of time devoted to eligible activities)
- Proof of eligible salaries paid
- NAICS code verification for your corporation
Complete Application Forms: Fill out the applications for the corporation and employee certificates. Ensure you use the latest version of the forms, available in French.
Submit Application: Send the completed forms and required documentation to Investissement Québec after your company’s year-end.
Pay Application Fees: Ensure you pay the fees for the analysis of all eligibility certificate applications. Refer to the rates schedule on the Investissement Québec website for details.
Await Confirmation: Investissement Québec will review your application and confirm whether your company is eligible for the tax credit.
Receive Certificates: Upon approval, you will receive the corporation and employee certificates from Investissement Québec.
Claim Tax Credit: Use the certificates to claim the tax credit on your corporation's tax return for the applicable taxation year.