Tax Credit for the Integration
of IT in SMBs
"This tax credit ends December 31, 2020 (one year extension)"
This tax measure encourages Québec SMBs to integrate IT into their business processes. Eligible corporations can obtain a refundable tax credit.
Details of Tax Assistance
This refundable tax credit covers 20% of eligible expenditures related to a qualified IT integration contract. The total amount of the credit is limited to $50,000 for the duration of the credit.
The tax credit is reduced linearly where the paid-up capital of the corporation and any associated corporations exceeds $35 million but is less than $50 million. The corporation may not receive the tax credit if its paid-up capital is $50 million or more.
A corporation (or a partnership of which it is a member) that has an establishment in Québec and carries on mainly activities (more than 50%) in an eligible sector is eligible for this tax measure.
- Primary sector
- Wholesale trade
- Retail trade
(1) Eligible sectors are grouped together under specific North American Industry Classification System (NAICS) codes established by Statistics Canada. Sectors identified by the following NAICS codes are eligible: primary – NAICS 11-21; manufacturing – NAICS 31-33; wholesale trade – NAICS 41 and retail trade – NAICS 44-45.
Qualified IT Integration Contract
A qualified IT integration contract means a written agreement that satisfies the following conditions.
- The contract is related to a preliminary analysis carried out by or for the corporation or partnership for the purpose of setting out a plan describing its needs in order to gain access to a computer system infrastructure allowing for the use of a management software package to optimize its business processes.
Subcontractor at Arm’s Length
An IT integration contract must be entered into with a person at arm’s length with the corporation or partnership, under which that person undertakes to supply a qualified management software package.
Supply of a Qualified Management Software Package
The supply of a qualified management software package means one or more of the following activities:
- the sale or leasing of a management software package or an
open-source management software package, or of usage rights for such property, that mainly enables management of one or more of the following:
- all of the operational processes of a business by integrating all of the functions of the business [integrated management (ERP) software package];
- the interactions of a business with its customers through multiple interconnected communication channels [customer relationship management (CRM) software package];
- a network of businesses involved in the production of a product or service required by the final customer to cover all movements of information, from the source to the point of consumption [supply chain management (SCM) software package];
- the delivery of services relating to the development, integration (installation and implementation), reconfiguration and evolution of a software package described above;
- the delivery of services required to support and train the personnel of the business and resolve bugs in relation to the integration of a software package described above in the business;
- the sale or leasing of general-purpose electronic data processing equipment and related system software, including ancillary data processing equipment, and of the application software required as part of the integration of the software package described above in the business, or of usage rights of such property.
Eligible Expenditures Related to the Supply of a Qualified Management Software Package
Eligible expenditures correspond to 80% of the costs associated with a qualified IT integration contract. The cumulative total of all eligible expenditures must not exceed $250,000 ($312,500 x 80%).
To be entitled to the tax credit, your corporation or partnership must apply to Investissement Québec for certification of the qualified IT integration contract pertaining to the supply of a qualified management software package.
Eligibility Period and Duration
The eligible corporation may claim the tax credit for expenditures related to a qualified IT integration contract in regard to which negotiations began before January 1, 2021. The IT contract negotiations must have begun after March 26, 2015 for corporations in the primary and manufacturing sectors, and after March 17, 2016 for corporations in the wholesale and retail trade sectors.
Investissement Québec charges a fee for issuing initial qualification or eligibility certificates. For more information, contact an Investissement Québec advisor or see the rates schedule on our website.
How to obtain the tax credit
- Complete the Application for a Contract Certificate and send it to us as soon as you have a written agreement covering the delivery of a management software package.
- Once it has completed its review, Investissement Québec will send an eligibility certificate to eligible corporations and partnerships.
- If you have any questions, contact one of our experts at
1 844 474-6367.
Fees are charged for processing all eligibility certificate applications.
Want to receive your refund right away?
If your company is eligible for this tax credit, you may want to apply for financing for refundable tax credits to put your cash to work sooner. For more details, please contact one of our financing experts at
1 844 474-6367.