This Quebec government assistance from Investissement Québec allows companies developing or integrating e-business systems (for example: management software, transactional or e-commerce websites) to receive a refundable tax credit of 30% of salaries paid to eligible employees between March 14th 2008 and June 4th 2014, and of 24% for those paid between June 5th 2014 and March 26th 2015 inclusively. For salaries paid after March 26th 2015, the company can receive a 24% refundable credit and a 6% non-refundable one.
Emergex SR&ED Subsidies, the expert in government assistance for the software and IT industries, helps technology companies that have operations in Quebec obtain the best return from the CDAE program, a refundable tax credit for the Development of E-Business.
This Quebec government assistance administered by Investissement Québec allows companies developing or integrating e-business solutions (for example: management software), or technology infrastructure related to e-business systems, to receive a refundable tax credit of 24% and a 6% non-refundable one on the first $83,333 of salary of an eligible employee (for a maximum of $20,000 in refundable credits and $5,000 in non refundable credits per employee).
In order to qualify to the CDAE credit, a company must meet three criteria:
At least 75% of its gross revenues must come from the IT sector, and at least 50% from activities covered by NAICS codes 541514, 541515, 511211, 511212 and, under certain conditions, 561320 and 561330.
At least 75% of its gross revenues for activities covered by NAICS codes 541514, 541515, 511211, 511212, 561320 and 561330 are for services ultimately provided to persons with whom it is at arm’s length, or for services related to applications used exclusively outside Quebec,
It must maintain at least six eligible employees at all time during the fiscal year. An eligible employee is one who spends at least 75% of his time working on eligible activities, works at least 26 hours per week, and is hired for a period of at least 40 weeks.
Combine your tax credits (larger font)
You are already claiming a tax credit for SR&ED? No problem! The tax credit for the development of e-business can be combined with R&D incentives and other tax credits in order to maximize your refunds. By combining the SR&ED and CDAE programs, you can get back up to 84% of eligible salaries in tax credits!
To receive the CDAE tax credit, a company must first obtain an eligibility certificate from Investissement Québec, as well as one for its employees. investissement Québec will ask various financial documents (financial statements, trial balances, sales journal) to make sure that the program criteria are met, and conduct a visit of the company, either in person or via videoconference. Once Investissement Québec has determined that the company is eligible (and its fees have been paid) they will issue the certificates. With those, the company can then fill the relevant schedules in its tax return and get the refund from Revenu-Québec.
How can Emergex help me optimize my E-business refunds?
Emergex helps technology companies claim the refundable tax credit for the development of E-Business (CDAE).
Several factors can compromise your eligibility to the refundable tax credit for the development of E-Business (CDAE). We can advise you how to avoid the pitfalls and thus ensure that you obtain your eligibility certificates.
We analyze your sources of revenues and make sure that you respect the required criteria
If you don’t respect the required criteria, we assist you in modifying your corporate structure in order to be compliant
We examine your documentation (timesheets, contracts, etc.) to make sure that it meets the requirements of Investissement Québec
In addition to the refundable tax credit for the development of E-Business (CDAE), there are several government programs that help you grow your company. By entrusting Emergex with the responsibility for claiming these other credits, you are sure to maximize your return on investment.
If you need cash to finance your software development, different options are available to you like banks and institutions specialized in financing tax credits. Please contact us for more information on financing availability.
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E-business tax credits in Canada are tax credits that are available to businesses that have a website or an online presence. These tax credits are intended to encourage businesses to invest in and use technology, including e-commerce, to improve their operations and reach new customers.
To be eligible for e-business tax credits in Canada, a business must have a permanent establishment in Canada and must be engaged in an active business. In addition, the business must have a website or an online presence that is used to sell goods or services, or to communicate with customers or clients.
There are two main types of e-business tax credits in Canada: the Scientific Research and Experimental Development (SR&ED) tax credit and the Canada Digital Adoption Program (CDAP).
The SR&ED tax credit is a federal tax credit that is available to businesses that conduct research and development activities in Canada. This tax credit can be claimed for expenses related to the development of new or improved products, processes, or materials, or for the development of new or improved software.
The CDAP is a temporary tax credit that is available to businesses that adopt digital technologies to improve their operations. This tax credit can be claimed for expenses related to the adoption of new or improved software, hardware, or services that are used to improve business operations, such as e-commerce, data analytics, or cloud computing.
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We are proud to be a trusted partner for companies across Canada looking to leverage SR&ED, other tax credits and grants. Benefit from our quarter of a century of experience by asking our opinion about your past, present and future claims!