Development of E-Business Tax Credit

Overview of the Development of E-Business Tax Credit program:

This tax measure is designed to consolidate the development of information technologies (IT) throughout Québec. It enables specialized corporations that carry out innovative, high-value-added activities in the IT sector to obtain a tax credit of an annual maximum of $25,000 per eligible employee.

Benefits of the Development of E-Business Tax Credit program:

• Eligible Activities
• IT consulting services relating to technology, systems development, or e-business processes and solutions that a corporation performs for a person insofar as the consulting services are related to the development, integration, maintenance or evolution of information systems or technology infrastructure, the design or development of e-commerce solutions, or the development of security and identification services that may be performed for that person.
• Development and integration as well as maintenance and evolution of:
• Information systems (for instance, distribution packages, software, and computer programs);
• Technology infrastructure (for instance, technology architecture upgrading and integration of hardware and software components).
• Design and development of e-commerce solutions allowing for monetary transactions between the person on whose behalf this design or development was done and that persons customers.
• Development of security and identification services (for instance, electronic imaging, artificial intelligence and interface) relating to e-commerce activities (for instance, security over Internet networks).

Eligibility criteria of the Development of E-Business Tax Credit program:

• Requirements for Our Corporation:
• IT Sector Activities:
• At least 75% of our business activities must be in the IT sector.
• Of these IT activities, at least 50% must fall under specific NAICS codes: 541514, 541515, 513211, 513212, and sometimes 561320 and 561330.
• This requirement applies to either the current tax year for which we are applying or the previous tax year.
• Service Provision:
• At least 75% of our activities under the specified NAICS codes must involve services provided to independent clients (not related to the company) or services related to applications weve developed that are used only outside Quebec.
• Employee Requirements:
• Throughout the tax year, we must have at least six eligible full-time employees.
• There are specific rules for cases where activities are transferred or when the business is a new startup in Quebec.
• Eligible Employees:
• Employees must have full-time jobs and spend at least 75% of their time on tasks, supervision, or direct support related to eligible activities.
• If unsure about NAICS codes please refer: https://www.census.gov/naics/reference_files_tools/2022_NAICS_Manual.pdf