TAX ASSISTANCE FOR SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT - REVENU QUÉBEC WWW.REVENU.GOUV.QC.CA - BANQ
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Revenu Québec www.revenu.gouv.qc.ca
Tax Assistance for
Scientific Research
and Experimental
Development
This publication is provided for information purposes only. It does not constitute a legal interpretation of the Taxation Act or any other legislation. ISBN 978-2-550-51976-8 (Print version) ISBN 978-2-550-51977-5 (PDF) Legal deposit – Bibliothèque et Archives nationales du Québec, 2008 Legal deposit – Library and Archives Canada, 2008
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
What is scientific research and experimental development? . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Eligibility of work in support of R&D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Deduction of R&D expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Qualified expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Excluded expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Refundable R&D tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Tax credit for salaries and wages relating to R&D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Tax credits for R&D expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Tax holiday for foreign researchers, experts and professors, and foreign researchers
on a post-doctoral internship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Foreign researchers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Foreign experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Foreign professors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Foreign researchers on a post-doctoral internship. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Forms to be completed and filing deadline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Forms to be completed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Filing deadline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Administrative aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Scientific review of R&D projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
How to file an application for R&D tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
3Introduction
The importance of scientific research and experimental development (R&D) to economic activity in Québec
is now recognized. The Québec government has acknowledged the role of R&D as an economic lever, by
granting refundable tax credits to eligible persons. These tax credits are available in conjunction with other
measures to stimulate R&D in Québec. If you have undertaken, or are about to undertake, an R&D project,
you may be entitled to the tax credits.
For example, a tax credit of up to 37.5% for the first $2 million paid in salaries and wages in Québec can
be claimed for R&D conducted by small or medium-sized businesses (SMBs); the rate is 17.5% in the case
of large businesses.
Other equally advantageous credits are available, including
• the tax credit for university research or research carried out by a public research centre or a research
consortium;
• the tax credit for private partnership pre-competitive research;
• the tax credit for fees or dues paid to a research consortium.
Consult this brochure if you carry on a business in Canada and you carry out R&D on your behalf or, under
certain conditions, on behalf of another person, or have R&D carried out on your behalf. It covers the main
points of the R&D tax measures in Québec. Among other things, it tells you how to claim deductions and
obtain refundable tax credits for R&D expenditures. It also specifies the type of information to be provided
to Revenu Québec in support of your application for a deduction or tax credit, as well as the forms to
be filed.
For more information, consult the relevant statutes and regulations. The forms and general information re-
lating to R&D are available on Revenu Québec's website at www.revenu.gouv.qc.ca. You may also order
the forms by calling one of the numbers on the back of this publication.
5What is scientific research and experimental
development?
Under the Taxation Act, "scientific research and experimental development" means systematic investigation
or search that is carried out in a field of science or technology by means of
• basic1 or applied2 research undertaken for the advancement of scientific knowledge;
• experimental development undertaken in order to achieve technological advancement for the
purpose of
− creating new materials, products, devices or processes,
− improving existing ones, even incrementally.
Eligibility of work in support of R&D
Eligible work includes basic and applied research, experimental development and R&D support work. Sup-
port work must be commensurate with the needs of the research or experimental development.
Eligible support work Non-eligible work
Work related to the activities below is eligible: Work related to the activities below is not
• engineering or design eligible:
• operations research • market research or sales promotion
• mathematical analysis or computer • quality control or routine testing of
programming materials, products, devices or processes
• data collection • research in the social sciences or the
humanities
• testing
• prospecting, exploring or drilling for,
• psychological research or producing, minerals, petroleum
or natural gas
• the commercial production of a new
or improved material, device or product,
or the commercial use of a new or
improved process
• style changes
• routine data collection
1. Basic research is undertaken for the advancement of science without any practical application in mind.
2. Applied research is undertaken for the advancement of science with a practical application in mind.
6Criteria
To be considered R&D, a project must meet the following criteria:
1. Scientific or technological advancement
The objective of the R&D project must be to acquire knowledge that advances the understanding of the
underlying scientific relations or technologies.
2. Scientific or technological uncertainty
The probability of achieving a given objective or result, or the way in which it can be achieved, must not
be known or determined in advance on the basis of generally available scientific or technological know-
ledge or experience.
3. Scientific or technical content
The work must incorporate a systematic investigation beginning with the formulation of a hypothesis,
followed by testing through experiment or analysis and the drawing of logical conclusions. Fulfilling
this criterion also means properly documenting the various stages of the project.
7Deduction of R&D expenditures
The Taxation Act provides for the possibility of deducting R&D expenditures, under special rules.
Current and capital expenditures are deductible from income for a given taxation year. However, not all
expenditures give entitlement to refundable tax credits (see page 11, under "Refundable R&D tax
credits"). The total expenditures must be reduced by the amount of any form of government assistance
(e.g., grant or forgivable loan) or non-government assistance received or receivable, as well as by the
federal investment tax credit for R&D expenditures for the year preceding the taxation year in question.
Two methods can be used to determine the amount of deductible R&D expenditures: the proxy method and
the traditional method.
Proxy method
The proxy method is simpler but more restrictive, as it takes into account only those expenditures that are
generally readily associated with R&D activities. Consequently, certain current expenditures are excluded.
Qualified expenditures are amounts that are directly related to R&D activities, that is, amounts that would
not otherwise be incurred if R&D were not carried out. Excluded expenditures include, among other things,
office supplies and the salaries and wages of certain employees not assigned to tasks relating to the tech-
nological aspects of R&D.
Traditional method (formerly called "regular method")
More expenditures—primarily current expenditures—can be taken into account under the traditional
method.
For more information, see form RD-222, Déduction des dépenses engagées pour la recherche scientifique et
le développement expérimental.
Expenditures that are not deducted in a given taxation year can be placed in an account and carried
forward to the subsequent years of your choice.
8Qualified expenditures
As a rule, there are two categories of deductible expenditures: current and capital expenditures.
Current expenditures
In general, current expenditures include
• salaries, wages and other remuneration paid to staff whose activities are directly related to R&D, such
as researchers, technologists and assistants with technical training, as well as R&D support staff.
Persons who prepare the equipment and materials necessary for experiments, tests and analyses are
considered to engage in R&D activities, as are those who, for example, record measurements, make
calculations, prepare charts, graphs and computer programs, and conduct surveys and interviews.
If such an employee devotes less than 90% of his or her time to R&D activities, the R&D expenditure
corresponds to the portion of the salary or wages paid to the employee for the time spent on R&D
activities. However, if 90% or more of the employee's time is devoted to research, the full amount of
the salary or wages is deductible. The same is true for supervisors and managers;
• expenditures relating to the provision of premises (excluding rent paid for a building), facilities or equip-
ment for R&D purposes;
• the cost of materials used in R&D activities;
• expenditures made under R&D contracts awarded to contractors and subcontractors;
• payments made to an entity such as a university, college, research institute or tax-exempt organization
resident in Canada, where the taxpayer has the right to use the research results.
If you opt for the traditional method to determine the amount of qualified R&D expenditures and you
show that certain current expenditures would not have been incurred if you had not carried out the R&D,
these expenditures may be qualified expenditures if they are directly attributable to the R&D activities.
Your current expenditures must be substantiated by supporting documents or relevant information showing
that they were incurred for R&D. You must break down the amounts, explaining how you determined
which of them were R&D expenditures, and justify your calculations. The amounts not related to R&D are
not qualified expenditures.
Capital expenditures
As a rule, capital expenditures relating to the acquisition of a building (including a leasehold interest in
a building, that is, an immovable under tenure of lease) are not deductible. However, you may deduct
expenditures incurred to acquire depreciable property other than a building (e.g., expenses incurred for
equipment).
For these expenditures to be deductible, the depreciable property must be used all or substantially all
(at least 90%) of the time for R&D purposes. If you deduct the cost of such property, you cannot claim
capital cost allowance for the property in the year concerned or in a subsequent year.
9Excluded expenditures
The following expenditures do not qualify as R&D expenditures:
• expenses incurred for the general administration or management of the business;
• costs for the maintenance and upkeep of premises or equipment, to the extent that they are not
related to R&D activities;
• bonuses or remuneration based on profits, in the case of specified employees (generally, shareholders
that hold at least 10% of the shares of a given corporation);
• expenses incurred to purchase or rent animals, other than laboratory animals within the meaning of the
regulations.
Example
Calculation of R&D expenditures
Qualified expenditures Traditional method Proxy method
Direct salaries and wages $100,000 $100,000
Materials + $15,000 + $15,000
Subcontractors + $40,000 + $40,000
Overhead:
• Office supplies + $15,000 ---------
• Support-staff salaries and wages + $12,000 ---------
Equipment + $40,000 + $40,000
Total expenditures $222,000 $195,000
Investment tax credit
(previous year) - ($25,000) - ($25,000)
Total deductible expenditures $197,000 $170,000
10Refundable R&D tax credits
All tax credits in this section are refundable. If you do not have income tax payable, the amount of the
credits will be paid to you. If you do have income tax payable, the amount of the credits will reduce the
income tax, tax on capital and compensation tax you owe. Furthermore, the tax credits are considered to
be instalment payments of income tax and tax on capital.
To be eligible for the tax credit for salaries and wages relating to R&D, the tax credit for university research
or the tax credit for private partnership pre-competitive research, you must carry on a business in Canada
and carry out R&D or have R&D carried out on your behalf in Québec.
Tax credit for salaries and wages relating to R&D
There are a number of refundable R&D tax credits. The tax credit for salaries and wages is the one most
frequently claimed.
General information
If you carry out R&D in Québec on your behalf or, under certain conditions, on behalf of another person,
or you have R&D carried out in Québec on your behalf, you may claim a refundable tax credit for the
salaries and wages or for the consideration you pay in Québec. Furthermore, you must carry on a business
in Canada to be eligible for the tax credit.
"Salary or wages" means the remuneration paid to an employee for work done by the employee in Québec.
Amounts giving entitlement to the tax credit for salaries and wages relating to R&D
The following amounts give entitlement to the tax credit:
• salaries and wages paid to the employees of an establishment located in Québec;
• if, in order to have R&D carried out, you entered into a contract with a person or partnership (a subcon-
tractor) with which you are not dealing at arm's length, the portion of the consideration you paid to
the person or partnership that may reasonably be attributed to salaries and wages paid to the employees
of an establishment of the person or partnership in Québec, or, if the person or partnership does not
have employees, the amount that would have been paid as salaries and wages had there been
employees;
• if, in order to have R&D carried out, you entered into a contract with a person or partnership (a subcon-
tractor) with which you are dealing at arm's length, half of the portion of the consideration you paid
to the person or partnership that may reasonably be attributed to salaries and wages paid to the
employees of an establishment of the person or partnership in Québec, or, if the person or partnership
does not have employees, the amount that would have been paid as salaries and wages had there
been employees; and
• the amounts paid under a research contract related to the commercialization of research findings
entered into after March 23, 2006. This improvement to the measure also includes, since that date, all
private partnership pre-competitive research projects.
Subcontractors include not only persons that engage directly in R&D on your behalf, but also persons that
do work to support research you conduct.
11Amounts that do not give entitlement to the tax credit for salaries and wages
The following amounts do not give entitlement to the tax credit:
• amounts paid under a university research contract or an eligible research contract (e.g., a contract en-
tered into with a research consortium) related to a step other than the commercialization of research
findings, if the contract was entered into after March 23, 2006;
• amounts paid in conjunction with a private partnership pre-competitive research project;
• amounts paid in conjunction with a private-public partnership pre-competitive research project if the
research contract was entered into before March 24, 2006; and
• fees or dues paid to a research consortium.
The above amounts may, however, give entitlement to other tax credits. See page 13, under "Tax credit
for university research or research carried out by a public research centre or a research consortium" and
page 15, under "Tax credit for private partnership pre-competitive research."
In general, expenditures, such as salaries and wages, give entitlement to only one of the refundable tax credits.
The amounts giving entitlement to the tax credit must be reduced by any government assistance (e.g.,
grant or forgivable loan) and non-government assistance received or receivable, as well as by contract pay-
ments and certain contributions. However, they are not reduced by the federal investment tax credit.
Calculation of the tax credit for salaries and wages
The rate of the tax credit for salaries and wages that a corporation may obtain depends on several factors.
For the first $2 million in qualified expenditures made during a given taxation year, the rate is calculated
on the basis of the corporation's assets. In the case of an SMB, the rate is higher. On December 4, 2006,
the maximum amount of assets that a corporation may possess in order to qualify as an SMB was doubled
from $25 million to $50 million. Consequently, the rate of the tax credit for salaries and wages is calculat-
ed differently, depending on whether the qualified expenditures were incurred before December 5, 2006,
for work done before that date or incurred after December 4, 2006, for work done after that date.
For qualified expenditures incurred before December 5, 2006:
• 37.5%, for SMBs (assets of less than $25 million);
• a progressive reduction from 37.5% to 17.5%, for corporations with assets between $25 million and
$50 million;
• 17.5%, for corporations with assets of $50 million or more.
For qualified expenditures incurred after December 4, 2006:
• 37.5%, for SMBs (assets of less than $50 million);
• a progressive reduction from 37.5% to 17.5%, for corporations with assets between $50 million and
$75 million;
• 17.5%, for corporations with assets of $75 million or more.
The rate applicable to qualified expenditures that exceed the first $2 million is 17.5%, regardless of the date
of the expenditures or the amount of the corporation's assets.
12Note
The assets used to determine the rates are those indicated in the financial statements of the corporation
for the year preceding the year for which the credit is claimed and the assets of any associated corpora-
tion for their preceding taxation year. If the corporation is in its first fiscal period, the assets at the start
of that period are taken into account.
Tax credits for R&D expenditures
Refundable tax credits for expenditures are granted to taxpayers that have R&D conducted on their behalf
in Québec. In general, the tax credits relate to qualified R&D expenditures that
• are incurred under a university research contract or a contract for research by a public research centre
or a research consortium;
• are incurred to realize a private partnership pre-competitive research project;
• represent fees and dues paid to a research consortium.
The expenditures must be reduced by any government and non-government assistance, as well as by
contract payments and certain contributions. However, the federal investment tax credit is not used to
reduce the expenditures.
Tax credit for university research or research carried out by a public research centre or
a research consortium
Taxpayers that enter into a university research contract with an eligible university entity, public research
centre or research consortium may claim a refundable tax credit of 35% of qualified R&D expenditures. If
the research is conducted by an eligible university entity, public research centre or research consortium
dealing at arm's length with the taxpayer, the credit is calculated on 80% of qualified expenditures (20%
of the value of the contract being attributed to profits).
All research centres that, since May 2, 1991, have been recognized by the Ministère des Finances du Québec
as eligible public research centres for the purposes of the refundable tax credit for university research must
file an annual return certifying that they still meet the eligibility criteria. The return covers a calendar year.
An "eligible university entity" is a Québec university, a university hospital medical research centre or any
other prescribed organization.
An "eligible public research centre" is an entity that groups government research centres and college cen-
tres for the transfer of technology.
An "eligible research consortium" is an organization located in Québec that groups corporations in a given
sector of activity and conducts R&D on their behalf. To be recognized as a consortium, the organization
must obtain a validation certificate from the Ministère du Développement économique, de l’Innovation et
de l’Exportation (MDEIE). For more information on obtaining a validation certificate, contact the MDEIE at
the following address:
Direction du développement de la recherche
2021, avenue Union, 10e étage
Montréal (Québec) H3A 2S9
Telephone: 514 873-8330
Fax: 514 864-8617
Website: www.mdeie.gouv.qc.ca
13Requirements
To be entitled to the tax credit, you must carry on a business in Canada, and conduct R&D work, or have
R&D work conducted on your behalf, in Québec. You must obtain a favourable advance ruling from Revenu
Québec by sending an application for an advance ruling to Revenu Québec no later than 90 days after
the day on which the contract was entered into or, in the event of a situation beyond your control, within
three years after the day on which the contract was entered into. An advance ruling must be obtained
for each contract, before any amounts provided for in the contract are paid. If you do not follow this
procedure, no amount paid under the contract will give entitlement to the credit. The following informa-
tion must be submitted for review:
• the signed research contract or the draft of the contract to be signed;
• the budget for project expenditures incurred under the contract;
• the description of the project;
• the identity of the partners in the project;
• the names of the corporation's shareholders (if the corporation is not a public corporation);
• the payment schedule for the entity;
• the work schedule for the project;
• the description of your field of activity.
The application for an advance ruling must be submitted by you, as a party to the contract, or by your
authorized representative. Your authorized representative may be the university entity, the public research
centre or the research consortium concerned. An initial fee of $250 is payable for the advance ruling ser-
vice, and $100 is charged for each additional hour. Your application must be sent to Revenu Québec, at
the address below:
Direction générale de la législation et des enquêtes
3800, rue de Marly
Québec (Québec) G1X 4A5
Example
Calculation of the tax credit
The taxpayer and eligible entity in this example are dealing at arm's length. Moreover, the taxpayer
did not receive any assistance, benefits or contract payments under the contract in question.
Determining the credit
R&D expenditures $10,000
Expenditures giving entitlement to the credit 80%
Applicable rate 35%
Credit amount $2,800
14Tax credit for private partnership pre-competitive research
Private corporations dealing at arm's length with each other that conclude a cooperative agreement to
carry out work themselves, or to have work carried out on their behalf, under a pre-competitive research
project may claim a refundable tax credit of 35% of qualified R&D expenditures incurred in Québec. The
tax credit is granted to each qualified corporation that is a member of the group, on the basis of the
expenditures the corporation incurred in Québec in a given taxation year for pre-competitive research
activities. A corporation must carry on a business in Canada, and conduct R&D work, or have R&D work
conducted on its behalf, in Québec to qualify for the tax credit for private partnership pre-competitive
research. However, the corporation's partners do not have to meet the same requirements.
Before any amount is paid under the partnership contract, you must obtain a favourable advance ruling
from Revenu Québec. See the instructions under "Tax credit for university research or research carried out
by a public research centre or a research consortium" on page 13. The following documents must accom-
pany the application for an advance ruling:
• a favourable opinion from the MDEIE. For more information on obtaining an opinion, contact the MDEIE
(see the contact information on page 13, under "Tax credit for university research or research carried
out by a public research centre or a research consortium");
• the agreement;
• a sufficiently detailed research project budget;
• the research project's sources of financing.
Tax credit for fees or dues paid to a research consortium
Each corporation that is a member of a research consortium recognized by the MDEIE may claim a refund-
able tax credit of 35% of its eligible fee.
As a rule, a taxpayer's eligible fee is the total fees or dues paid by the taxpayer to the research consortium
to conduct R&D in Québec in relation to the taxpayer's activities.
15Tax holiday for foreign researchers, experts and
professors, and foreign researchers
on a post-doctoral internship
General information
Duration of the tax holiday
An individual who is not resident in Canada and who comes to Québec to work may claim a total or par-
tial tax holiday on his or her salary or wages. The tax holiday, which covers five calendar years, is calculat-
ed on a continuous or non-continuous basis, depending on whether the employment contract was signed
after March 30, 2004, or before March 31, 2004.
Continuous period
An individual is entitled to only one five-year tax exemption period even if he or she holds more than one
type of employment giving entitlement to the exemption. The exemption period is continuous for an indi-
vidual who signed an employment contract after March 30, 2004.
Non-continuous period
If an individual signed a contract before March 31, 2004, and renews the contract after March 30, 2004,
and if the contract is not deemed to be separate from the contract signed prior to March 31, 2004, the indi-
vidual's exemption period may be non-continuous.
This means that if the individual stops working before the end of the five-year exemption period, the
period in which he or she is not working is not taken into account in calculating the five-year period as long
as the individual does not sign a new (separate) contract.
Exemption rates
The percentage varies according to the date on which the employment contract was concluded. If the
contract was entered into before June 13, 2003, the rate is 100%. If it was entered into before March
31, 2004, but after June 12, 2003, the rate is 75%. If it was entered into after March 30, 2004, the rate
varies sequentially from 100% to 75%, to 50%, and to 25%, on the anniversary of the holiday granted.
16Exemption rates
Contract entered into before Contract entered into after
March 31, 2004* March 30, 2004*
Contract entered into before June 13, 2003, 1st and 2nd year of the five-year
and the date employment starts is no later exemption period: 100%
than
3rd year of the five-year
September 1, 2003: 100% exemption period: 75%
Other cases: 75% 4th year of the five-year
exemption period: 50%
Special situation: 100%
5th year of the five-year
This exemption applies to an employee's salary
exemption period: 25%
or wages for the remainder of the five-year
period, if the employee is in the following
situation:
The employer continues to operate a business
further to a corporate reorganization (for
example, a corporate amalgamation or the
winding up of a corporation wholly owned by
another corporation) and remains eligible for
the purposes of the tax exemption.
* If, after March 30, 2004, an employee renews an employment contract entered into before
March 31, 2004, the employee continues to be entitled to the rates that apply for contracts
entered into before March 31, 2004, unless the renewed contract is deemed under the tax legis-
lation to be a new contract.
Note
Income received by these individuals from any other source must be included in the calculation of their
income, as is the case for any other Québec resident.
17Foreign researchers
A foreign researcher is an individual who must meet the following main conditions:
• At a particular time, he or she took up employment, as an employee, with an eligible employer under
a contract entered into with the employer.
• He or she was not resident in Canada immediately before the date on which he or she entered into the
employment contract or took up employment, as an employee, with an eligible employer.
From the particular time to the end of the year or part of the year, he or she must
• work exclusively or almost exclusively for the eligible employer;
• perform duties in Québec for the eligible employer that consist in conducting R&D (see the table of eli-
gible R&D work on page 6). The duties cannot, for example, be performed for an eligible university
entity or an eligible public research centre, within the meaning of the Taxation Act;
• be specialized in the field of pure or applied science or a related field, and hold a master's degree recog-
nized by a Québec university, or possess equivalent knowledge as certified by a certificate from the
Ministère du Développement économique, de l’Innovation et de l’Exportation (MDEIE) that has not
been revoked.
Among other things, the employer must
• be a person or a partnership that carries on a business in Canada, that is not an eligible university entity
within the meaning of the Taxation Act, that is not exempt from income tax and that carries out R&D,
or has R&D carried out on its behalf, in Québec;
• obtain a certificate from the MDEIE that is not subsequently revoked, certifying that the individual is spe-
cialized in the field of pure or applied science or a related field, and holds a Master's degree recog-
nized by a Québec university, or possesses equivalent knowledge. The employer must apply for the cer-
tificate before March 1 of the calendar year following the taxation year.
For more information or to obtain a certificate, contact the MDEIE (see the contact information on page 13,
under "Tax credit for university research or research carried out by a public research centre or a research
consortium").
Foreign experts
To help corporations hire experts in the commercialization of research—for example, in the fields of mar-
keting and transferring advanced technology—a tax holiday was introduced for foreign experts employed
by a corporation. However, the corporation must be an eligible employer that commercializes the results
of R&D conducted in Québec.
A foreign expert is an individual who must meet the following main conditions:
• After March 9, 1999, he or she took up employment, as an employee, with an eligible employer under
a contract entered into with the employer after that date.
• He or she was not resident in Canada immediately before the date on which he or she entered into the
employment contract or took up employment, as an employee, with an eligible employer.
18From the particular time to the end of the year or part of the year, he or she must
• work exclusively or almost exclusively for the eligible employer;
• perform duties as an employee of the eligible employer as part of an R&D project (see the table of
eligible R&D work on page 6), either before, while or after the project is carried out;
• be specialized in the management or financing of innovative activities or in the foreign marketing or trans-
fer of advanced technologies, as certified by a certificate from the MDEIE that has not been revoked.
Among other things, the employer must
• be a person or a partnership that carries on a business in Canada, that is not an eligible university entity
or a government or Crown corporation that is or is not exempt from income tax and that carries out
R&D, or has R&D carried out on its behalf, in Québec;
• obtain a certificate from the MDEIE that is not subsequently revoked, certifying that the individual is spe-
cialized in the management or financing of innovative activities or in the foreign marketing or transfer
of advanced technologies. The employer must apply for the certificate before March 1 of the calendar
year following the taxation year.
For more information or to obtain a certificate of competency, contact the MDEIE (see the contact infor-
mation on page 13, under "Tax credit for university research or research carried out by a public research
centre or a research consortium").
Foreign professors
A foreign professor is an individual who must meet the following main conditions:
• At a particular time after June 29, 2000, he or she took up employment, as an employee, with an
eligible employer under an employment contract entered into after that date.
• He or she was not resident in Canada immediately before the date on which he or she entered into the
employment contract or took up employment, as an employee, with the eligible employer.
• From the particular time to the end of the year or part of the year, he or she worked exclusively or
almost exclusively for the eligible employer.
• From the particular time to the end of the year or part of the year, he or she performed duties for the
eligible employer that consisted exclusively or almost exclusively in acting as a professor in the field of
science and engineering, finance, health or new information and communication technologies.
• He or she is specialized in the field of science and engineering, finance, health or new information and
communication technologies and holds a doctoral degree in such a field.
Among other things, the employer must
• be a Québec university;
• obtain an annual certificate from the Ministère de l’Éducation, du Loisir et du Sport that is not subse-
quently revoked, certifying that the individual is specialized in the field of science and engineering,
finance, health or new information and communication technologies and holds a doctoral degree in such
a field, and that, from the particular time to the end of the year or part of the year, the individual per-
formed duties for the employer that consisted exclusively or almost exclusively in acting as a professor
in the field of science and engineering, finance, health or new information and communication tech-
nologies. The employer must apply for the certificate before March 1 of the calendar year following the
taxation year.
19For more information or to obtain a certificate, contact the Ministère de l’Éducation, du Loisir et du Sport
at the address below:
Édifice Marie-Guyart, 20e étage
1035, rue De La Chevrotière
Québec (Québec) G1R 5A5
Telephone: 418 643-3863
Foreign researchers on a post-doctoral internship
A foreign researcher on a post-doctoral internship must meet the following main conditions:
• At a particular time after March 31, 1998, he or she took up employment, as an employee, with an eli-
gible employer under an employment contract entered into after that date.
• He or she was not resident in Canada immediately before the date on which he or she entered into the
employment contract or took up employment, as an employee, with the eligible employer.
From the particular time to the end of the year or part of the year, he or she must
• work exclusively or almost exclusively for the eligible employer and perform duties as an employee of
the eligible employer that consist exclusively or almost exclusively in being a researcher on a post-
doctoral internship and in performing scientific research and experimental development;
• be specialized in the field of pure or applied science or a related field and hold a doctoral degree in such
a field.
Among other things, the employer must
• be an eligible public research centre or an eligible university entity within the meaning of the Taxation
Act;
• obtain an annual certificate from the Ministère de l’Éducation, du Loisir et du Sport that is not subse-
quently revoked, certifying that the individual is specialized in the field of pure or applied science or a
related field and holds a doctoral degree in such a field, and that, from the particular time to the end
of the year or part of the year, the individual performed duties for the employer that consisted exclu-
sively or almost exclusively in being a researcher on a post-doctoral internship. The employer must apply
for the certificate before March 1 of the calendar year following the taxation year.
For more information or to obtain a certificate, contact the Ministère de l'Éducation, du Loisir et du Sport
(see the contact information above).
20Forms to be completed and filing deadline
Forms to be completed
To deduct qualified R&D expenditures or claim refundable R&D tax credits, you must complete the forms
below, where applicable:
• Déduction des dépenses engagées pour la recherche scientifique et le développement expérimental
(RD-222) ;
• Crédit d’impôt relatif aux salaires – R-D (RD-1029.7) ;
• Crédit d’impôt pour la recherche universitaire ou la recherche effectuée par un centre de recherche public ou
par un consortium de recherche (RD-1029.8.6) ;
• Crédit d’impôt relatif aux cotisations et aux droits versés à un consortium de recherche (RD-1029.8.9.03) ;
• Crédit d’impôt pour la recherche précompétitive (RD-1029.8.10) ;
• Crédit d’impôt pour la recherche précompétitive en partenariat privé (RD-1029.8.16.1)
• Entente concernant la limite de dépenses entre sociétés associées (RD-1029.7.8).
You can obtain these forms on Revenu Québec's website at www.revenu.gouv.qc.ca, or by calling one of
the numbers shown on the back of this brochure.
You must enclose the required forms with your corporation income tax return (form CO-17).
Filing deadline
As a rule, the corporation income tax return, along with the related schedules and forms, must be sent to
Revenu Québec within six months after the end of the corporation's taxation year. However, the forms
required to claim R&D tax credits must be filed within 18 months, that is, 12 months after the filing dead-
line for the return. The 12-month filing deadline also applies to form RD-222, Déduction des dépenses enga-
gées pour la recherche scientifique et le développement expérimental.
21Administrative aspects
Scientific review of R&D projects
Under an agreement reached between Revenu Québec and the Canada Revenue Agency (CRA) in 1994,
the CRA is responsible for carrying out scientific reviews of R&D projects. (In 1994, these administrative units
were known as the Ministère du Revenu du Québec and the Canada Customs and Revenue Agency). Like
the Québec government, the federal government offers R&D tax credits, and the scientific eligibility crite-
ria of their respective programs are the same. In fact, the criteria are recognized worldwide by the Organ-
isation for Economic Co-operation and Development (OECD).
Consequently, once scientific projects are submitted to the CRA, research and technology advisors assess
the R&D work to determine whether it meets the eligibility criteria of CRA and Revenu Québec programs.
Afterward, confirmation of the eligibility of the projects is sent to Revenu Québec so that the tax credits
to which the taxpayer is entitled may be granted.
How to file an application for R&D tax credits
To claim R&D tax credits, you must first complete form RD-222, Déduction des dépenses engagées pour la
recherche scientifique et le développement expérimental, and the forms required for the specific credits claimed.
In particular, you must be able to
• specify the R&D projects covered by your tax credit application and provide certain related information;
• justify all salaries and wages for R&D activities, especially if you are applying for more than one credit
for salaries and wages;
• show other R&D expenditures (e.g., those relating to subcontractors).
An application is considered to be complete only if it contains all of the prescribed forms, duly completed,
and all other information requested. Your application will be processed once Revenu Québec receives
confirmation from the CRA that your projects meet the scientific eligibility criteria.
Confidentiality
The tax file of a person is confidential; no information contained in a person's tax file may be used or com-
municated unless the person consents thereto or the use or communication is authorized by law. A per-
son's tax file consists of the information held by the Minister of Revenue of Québec in respect of the per-
son, in whatever form, for the application of a tax law. Thus, Revenu Québec must ensure that all
information transmitted to it, including information relating to R&D activities, remains confidential.
22To contact us
By Internet
We invite you to visit our website at www.revenu.gouv.qc.ca.
By telephone Hours of availability for telephone service
Monday, Tuesday, Thursday and Friday: 8:30 a.m. to 4:30 p.m.
Wednesday: 10:00 a.m. to 4:30 p.m.
Information concerning individuals and individuals in business
Québec City area Montréal area Elsewhere (toll-free)
418 659-6299 514 864-6299 1 800 267-6299
Information concerning businesses, employers and consumption taxes
Québec City area Montréal area Elsewhere (toll-free)
418 659-4692 514 873-4692 1 800 567-4692
Information service for persons with a hearing impairment
Montréal area Elsewhere (toll-free)
514 873-4455 1 800 361-3795
By mail
Individuals and individuals in business
Montréal, Laval, Laurentides, Lanaudière Québec City and other areas
and Montérégie Direction principale des services à la
Direction principale des services à la clientèle clientèle des particuliers
des particuliers Revenu Québec
Revenu Québec 3800, rue de Marly
Complexe Desjardins Québec (Québec) G1X 4A5
C. P. 3000, succursale Desjardins
Montréal (Québec) H5B 1A4
Businesses, employers and consumption taxes
Montréal, Laval, Laurentides, Lanaudière, Québec City and other areas
Montérégie, Estrie and Outaouais Direction principale des services à la
Direction principale des services à la clientèle clientèle des entreprises
des entreprises Revenu Québec
Revenu Québec 3800, rue de Marly
Complexe Desjardins Québec (Québec) G1X 4A5
C. P. 3000, succursale Desjardins
2007-04
Montréal (Québec) H5B 1A4
Cette publication est également disponible en français et s’intitule L’aide fiscale pour la recherche scientifique et
le développement expérimental (IN-109).
IN-109-V (2008-03)You can also read
