Revisions to Quebec SR&ED Tax Credit Program

During his December 2nd economic update, Quebec Finance Minister Carlos Leitao announced two major revisions to the Quebec SR&ED tax credit program: (1) Introduction of a minimum eligibility threshold, and (2) Standardization of enhanced tax credit rates.

Introduction of Minimum Eligibility Threshold

Leitao introduced amendments to the legislation to exclude, from tax assistance in the form of R&D tax credits, the first dollars spent annually by a taxpayer below an exclusion threshold.  Minimum expenditure thresholds of $50,000 (for companies with less than $50 million in assets) and $225,000 (for companies with assets totalling over $75 million) will be introduced.  The threshold will increase linearly from $50,000 to $225,000 for companies with assets between $50 million and $75 million.

Standardization of Enhanced Tax Credit Rates

Quebec’s enhanced SR&ED tax credit rates for research contracts, private partnership research, and fees paid to a research consortium will be standardized (to be set at same rate as R&D wages).  The rate of the refundable tax credit for R&D wages is 14%, but it can vary from 14% to 30% in the case of a Canadian-controlled corporation.