CREDIT FOR THE DEVELOPMENT OF E-BUSINESS (CDAE)
Extension, enhancement and clarification of eligible activities
Extension, enhancement and clarification of eligible activities
In its July 11, 2013 information bulletin, the Ministère des Finances et de l’Économie du Québec announced an enhancement and extension of the refundable tax credit for e-business development (CDAE).
In short, this credit is designed to consolidate the development of the information technology sector throughout Quebec. A credit of 30% of the salary of eligible employees is granted to companies that have obtained an eligibility certificate from Investissement Québec for each eligible employee, in addition to an eligibility certificate from the company itself.
EXTENSION
The legislation will be amended to extend the eligibility period, which was due to end on December 31, 2015, to December 31, 2025.
BONIFICATION
The 30% credit rate will remain the same for the extended period. However, the current annual credit limit of $20,000 per employee will be increased to $22,500 as of January 1, 2016. Where a corporation’s taxation year includes January 1, this $22,500 amount will be prorated based on the number of days in that taxation year following December 31, 2015.
DETAILS OF ELIGIBLE ACTIVITIES
Details of a company’s eligible activities will be provided in the legislation, to confirm the position adopted by Investissement Québec since the introduction of this credit.
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Information technology consulting services related to technology, system development or e-business processes and solutions that a company provides to a person are eligible if the consulting service relates to :
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the development, integration, maintenance or evolution of information systems or technological infrastructures.
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the design or development of e-commerce solutions.
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the development of security and identification services for this person.
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The design or development of e-commerce solutions is eligible only if it results in a monetary transaction between the person on whose behalf the design or development is carried out and that person’s customers.
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An activity relating to a marketing information system, aimed at increasing a company’s visibility and promoting its goods and services to customers, does not qualify as an eligible activity. An activity relating to an information system with a marketing component is not covered by this exclusion.
SUMMARY OF ANNOUNCEMENTS IN THE JULY 11, 2013 NEWSLETTER
| Before | After | |
| Maximum annual credit per employee |
20 000 $
(salary cap of $66,667)
|
22 500 $ ($75,000 salary cap) |
|
End of eligibility period
|
December 31, 2015 | December 31, 2025 |
| Eligible activities |
Clarification of the eligibility of IT consulting activities, the design and development of e-commerce solutions and activities relating to an information system with a marketing component.
|
For more information on this tax memo, please contact :
Liliane Fortier, CPA, CA, LL.M. Fiscal authorities.
Partner, Canadian Taxation, SR&ED
Telephone: 514 878-0258
lfortier@demersbeaulne.com
Partner, Canadian Taxation, SR&ED
Telephone: 514 878-0258
lfortier@demersbeaulne.com
Laurent Mailloux, Eng.
Senior Director, SR&ED Taxation
Telephone: 514 878-0231
lmailloux@demersbeaulne.com
Telephone: 514 878-0231
lmailloux@demersbeaulne.com
