Add

Attractive Tax treatment and tailor-made incentives

Slider_Financier_eng

A competitive tax burden

Ranked 2nd among the 20 largest metropolitan areas in North America in terms of the competitiveness of the business tax burden, all sectors combined

Comparison of corporate tax rate
Selected Canadian provinces and U.S. States, 2014
Effective tax rate (%)

ENG_p22_2_Comparaison-tax-rate-2

Sources: Investissement Québec and Raymond Chabot Grant Thornton, 2014

  • Particularly for R&D companies

The lowest tax burden in North America for R&D companies, thanks to competitive tax rates and generous tax credits provided by the Canadian and Québec governments

Tailor-made incentives

Scientific Research and Experimental Development (SR&ED) Tax Credit Program

  • 15% from the government of Canada
  • 14% refundable from the government of Québec

Scenario 1 ($)

Scientific research and experimental development (SR&ED) tax incentive program 2015

 Assumptions1:

  • Private, foreing-controlled company
  • 20 eligible employees @ 50,000 / year
  • 100% of their work is related to eligible activities
  • Subcontractor: $200,000
FEDERAL QUÉBEC TOTAL
SALARY 1,000,000 1,000,000
REPLACEMENT AMOUNT@ 55% 550,000
SUBCONTRACTORS2 160,000 100,000
QUÉBEC SR&ED CREDIT3 -122,500
 EXCLUSION4 225,000
1,587,500 875,000
FEDERAL CREDIT @ 15% AND QUÉBEC CREDIT @ 14% 238,125 122,500 360,625

Notes: 1. This model takes into consideration recent changes made to certain tax credits (2012, 2014 and 2015) and is thus valid as of fiscal 2015. 2. Only 80% of the amount paid to a subcontractor is eligible for a federal tax credit and 50% for a Québec tax credit. 3. For the purposes of calculating the combined rate of the credit, the tax credit from the government of Québec is applied against the federal tax credit; 4. For SMEs (less than 50M$ assets), there is an SR&ED tax credit exclusion on the first $50K of R&D spending. For large companies and companies under foreign control, the exclusion applies on the first $225K of R&D spending.

Source: Finance Ministry of Québec, 2015. Compilation: Montréal International, 2015

Refundable Tax Credit for the Development of e-Business

Covers up to 30%, including 24% refundable, of employee salaries up to $25,000 per job per year

Subject to certain conditions, eligible activities are categorized under the 10 following NAICs codes:

  • 334110 – Computer and Peripheral Equipment Manufacturing
  • 334220– Radio and Television broadcasting and Wireless Communications Equipment Manufacturing
  • 334110 – Semiconductor and Other Electronic Component Manufacturing
  • 417310 – Computer, Computer Peripheral and Pre-Packaged Software Wholesalers- Distributors
  • 443120 – Computer and Software Stores
  • 511210 – Software Publishers
  • 51821 – Data Processing, Hosting, and Related Services
  • 541510 – Computer Systems Design and Related Services
  • 561320 – Temporary Help Services (under certain conditions)
  • 561330 – Professional Employer Organizations (under certain conditions)

Scenario 2 ($)

Combination of the provincial refundable tax credit for the development of e-business (CDAE) and the federal scientific research and experimental development (RS&ED), 2015

Assumptions1:

  • Foreign-controlled private company
  • 20 eligibles employees @ $50,000/year
  • 100 % of their work is related to activities eligible for the CDAE and the SR&ED tax credits
FEDERAL QUÉBEC TOTAL
SALARY 1,000,000 1,000,000
REPLACEMENT AMOUNT @ 55%2
550,000
QUÉBEC CDAE CREDIT3 0
  1,550,000 1,000,000
FEDERAL CREDIT @ 15% AND QUÉBEC CREDIT @ 24%4 232,500 240,000 472,500
 FEDERAL CREDIT @ 15% AND QUÉBEC CREDIT @ 30%5 232,500 300,000 532,500

Notes: 1. This model takes into consideration recent changes made tocertain tax credits (2012, 2014 and 2015) and is thus valid as of fiscal 2015. 2. Limited by other company expenditures. 3. The CDAE does not reduce the amount eligible for the federal SR&ED tax credit. 4. The corporate taxes paid are not sufficient to cover the 6% non-refundable part of the tax credit. 5. The corporate taxes paid are sufficient to fully cover the 6% non-refundable part of the tax credit.

Source: Deloitte, Finance Ministry of Québec, 2015. Compilation: Montréal International, 2015

Refundable Tax credit for the Production of Multimedia Titles

Covers 26.25% to 37.5% of wages

Value of tax credits for production of multimedia titles

Category 1: Titles produced without being part of commission and destined for commercial markets

Category 2: Other multimedia titles

CATEGORY 1  MULTIMEDIAS TITLES    CATEGORY 2  MULTIMÉDIAS TITLES   
BASIC CREDIT  30% of eligible labour costs 26.25% of eligible labour costs
BONUS FOR FRENCH-LANGUAGE AVAILABILITY 7.5% of eligible labour costs Not applicable
TOTAL 37.5% of eligible labour costs 26.25% of eligible labour costs

Scenario 3 ($)

Combination of provincial refundable tax credit for multimedia productions (CTMM) and the federal scientific research and experimental development (SR&ED) tax credit, 2015

Assumptions1:

  • Foreign-controlled private company
  • 20 eligible employees @ $50,000/year
  • 100% of their work is related to activities eligible for the tax credit for multimedia productions and the SR&ED tax credit
  • Company is specialized
  • Multimedia titles are not part of an order and are available in French.
  FEDERAL  QUÉBEC  TOTAL
 SALARY  1,000,000  1,000,000
REPLACEMENT AMOUNT @ 55%2   550,000
CREDIT CTMM CREDIT34  0
  1,550,000  1,000,000
FEDERAL CREDIT @ 15% AND QUEBEC CREDIT @ 37,5%    232,500  375,000  607,500

Notes: 1. This model takes into consideration recent changes made to certain tax credits (2012, 2014 and 2015) and is thus valid as of fiscal 2015. 2. Limited by other company expenditures. 3. The CTMM does not reduce the amount eligible for the federal SR&ED tax credit; 4. The CTMM can reach a maximum of 37,500$ per employee. However, up to 20% of the total employees are not subject to this limitation.

Source: Finance Ministry of Québec, 2015. Compilation: Montréal International, 2015

Financial Assistance for Job Creation and Training

  •  25% of eligible costs for the implementation of a training program
  • 50% of costs incurred for the creation of a human resource department

ESSOR Fund for Major Projects

  • Refundable and non-refundable contributions, loan guarantees
  • Sectors: manufacturing, software publishing, private research centres, environmental services and tourism 

5 years tax holiday for Foreing Researchers and Experts

Five-year Québec income tax exemption

  • 100% of salary for the 1st and 2nd years 
  • 75% for the 3rd year
  • 50% for the 4th year
  • 25% for the 5th year

Strategic Aerospace and Defence Initiative (SADI)

  • Refundable contributions for up to 30% of R&D project expenses

Refundable Tax Credit for International Financial Centres

  • 24% of salaries up to $16,000 per job per year

Tax Credit for Film Production Services

  • Up to 38% combined tax credits for production services
  • 20% in credits refundable by the government of Québec for eligible production costs
  • 16% bonus for extended labour costs incurred for eligible productions comprising special effects and computer animation (with scenes shot in front of a chroma key screen)
  • 16% non-refundable tax credits for eligible labour costs from the Government of Canada

 Find out more:

The commercial power : Direct access to the North American market
The power of human capital : A pool of highly qualified workers
The economic power : The most competitive operating costs in North America
The industrial power : 7 clusters of excellence in high value sectors
The power to attract the best : One of the world’s top 10 hip cities
The power to help you