Canada: Innovation tax credit (Quebec)

Canada: Innovation tax credit (Quebec)

Quebec businesses need to determine whether they qualify for the province's newly enhanced credit for investments and innovation (C3i).


This temporary tax credit (introduced in the 2020 Quebec budget) generally provides enhanced benefits over the current Quebec investment tax credit. The C3i provides a credit of up to 20% to qualified corporations that invest in certain property after 10 March 2020 and before 2025. The province's 2021 budget further enhanced this credit by temporarily doubling its rate to up to 40% for certain acquisitions after 25 March 2021.

To be eligible for the C3i, taxpayers must conduct a business and have an establishment in Quebec. Additionally, corporations that are members of a qualified partnership may be eligible for the C3i with regard to specified expenses that the partnership incurs for acquiring certain property. However, aluminum producing and oil refining corporations are not eligible for the C3i.

KPMG observation

Corporations need to consider these new rules for the C3i (that overlap with the existing Quebec investment tax credit rules) to determine which credit may be more beneficial given their specific circumstances.

Read a March 2021 report prepared by the KPMG member firm in Canada

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