Standardizing the Quebec R&D Tax Credit Rates – December 2, 2014 Changes

The Quebec government announced changes to the refundable R&D tax credit programs. The R&D tax credit rate was standardized from 14% (for large corporations) to 30% (for Canadian Controlled Private Corporations) for all Quebec R&D tax credit programs (i.e., Wages, University, Private Partnership for Research, and Eligible Consortium commonly known R&D tax credit programs). The Quebec government also introduced expenditure exclusion amounts for the purposes of R&D tax credits based on a corporation’s assets, namely an exclusion of $50,000 (assets < $50 million) up to $225,000 (assets > 75 million).

The main impact of these changes will be to 1) eliminate very small R&D tax credit claims, 2) eliminate smaller claims from large corporations, and 3) effectively reduce the tax credit benefit for all companies. Although this reduces the government’s administrative cost of working with small R&D claims, it is not good news for R&D startups and further hurts Quebec’s competitiveness with respect to R&D.

How R&D Partners Can Help

If you have questions or comments about these tax credits, please do not hesitate to contact Sahar Ansary at 1-800-500-7733 for more information.