Introduction of a Refundable Tax Credit for the Diversification of Markets of Québec Manufacturing Companies
To support Québec manufacturing businesses that are expanding the commercialization of their products to markets outside Québec, a new temporary refundable tax credit has been introduced. An eligible corporation may, under certain conditions, receive a refundable tax credit equal to 30% of the eligible certification expenses it incurs for one or more eligible goods. However, the total amount of this tax credit is limited to $45,000.
For the purposes of this tax credit:
- "eligible corporation" means a corporation, other than an excluded corporation, that carries on a business in an establishment in Québec during a given taxation year. An eligible corporation must obtain a qualification certificate from Investissement Québec confirming that, for the given taxation year, at least 75% of its activities during the year are eligible activities. Eligible activities are activities grouped under one or more of the codes of the North American Industry Classification System (NAICS);
- "excluded corporation" means either a corporation that is tax-exempt for a given taxation year or a corporation whose assets shown in its financial statements for the fiscal period preceding the year are greater than $50 million;
- "eligible good" means a good that an eligible corporation makes in Québec and plans to commercialize outside Québec and for which it obtained, in a given taxation year, certification that the good complies with the legal standards applicable outside Québec. Such a certificate must be obtained before January 1, 2017;
- "eligible certification expenses" means the expenses incurred by an eligible corporation during a given taxation year or a prior taxation year that are directly attributable to the expenses required for the certification of an eligible good, such as the fees paid to a certification organization and the fees paid to an external consultant, who is dealing at arm's length with the corporation. They do not include expenses incurred by the corporation internally. A corporation must have paid the eligible certification expenses it incurred at the time the refundable tax credit application is filed with Revenu Québec.
The refundable tax credit can be claimed only as of the taxation year in which certification will have been obtained for a good that the corporation manufactures in Québec.
The refundable tax credit that an eligible corporation may receive, for a given taxation year, for one or more eligible goods, corresponds to the lesser of the following amounts:
- 30% of the eligible certification expenses incurred for the eligible good(s) for the given year;
- the amount by which $45,000 exceeds the amount of the tax credit received for a taxation year prior to the given taxation year.
An eligible corporation that obtains a qualification certificate after March 20, 2012, may receive this refundable tax credit for eligible certification expenses it incurs after that date, but before January 1, 2016.
For further information, see page 50 in Additional Information on the Fiscal Measures of the Budget, published by the Ministère des Finances.