Increase in the Rate of the Refundable Tax Credit for Salaries and Wages (R&D) for Biopharmaceutical Activities
The refundable tax credit for salaries and wages paid for scientific research and experimental development activities (R&D) has been enhanced for a temporary five-year period.
Tax legislation will be amended so that an eligible biopharmaceutical corporation that, after November 20, 2012, obtains a qualification certificate for a taxation year may receive a tax credit equal to 27.5% of its eligible R&D expenditures incurred for that year, after that day, for R&D work carried out in that year, after that day. Such expenditures and work must respectively be incurred and carried out before January 1, 2018.
To benefit from the higher tax credit rate, the corporation must enclose with its income tax return for a taxation year the qualification certificate issued by Investissement Québec that certifies that the corporation is a qualified biopharmaceutical corporation for that year. To be a qualified biopharmaceutical corporation, the corporation must have obtained an initial qualification certificate from Investissement Québec.
To give full effect to this increase in the rate of the tax credit, a qualified biopharmaceutical corporation that qualifies as an SMB and that benefits from an increase in the rate of this tax credit will continue to benefit from this increase. The tax credit rate, which can be up to 37.5%, will be reduced linearly from 37.5% to 27.5% where the corporation's assets, calculated according to the rules applicable to this increase, range from $50 to $75 million.
For further information, see page H.37 of the Budget Plan of the Ministère des Finances et de l’Économie.