REFUNDABLE TAX CREDITS TO SUPPORT R&D:

AN IMPORTANT LEVER FOR ECONOMIC DEVELOPMENT IN QUEBEC

The Quebec government’s latest budget included a review of tax credits for companies in the e-business and multimedia sectors. The refundable tax credit for multimedias (CTMM), which mainly benefits SMEs in the dynamic video game production sector, will be reduced from 30% to 20% over a 5-year period. Over the same period, a non-refundable tax credit, applicable only on taxes payable, will be phased in, reaching 10% within 5 years. In the e-business sector, the impact of the measures announced in Minister Girard’s last budget will be less significant, as the refundable tax credit (crédits d’impôt pour les affaires électroniques or CDAE) will be reduced from 24% to 20% within 5 years, while the non-refundable tax credit will be gradually increased from 6% to 10%.

The video game industry

La Guilde du jeu vidéo du Québec, the Quebec video game association, is concerned about this change to the refundable tax credit, which it points out will mainly affect small studios that are not yet making a profit and therefore won’t be able to benefit from the non-refundable tax credit. It often takes several years before small studios make their first profits.

The CTMM has also encouraged world-class players such as Ubisoft to set up shop in Quebec. The sector employs some 14,500 people in nearly 300 studios in different regions of Quebec. It is therefore important to maintain a competitive economic and fiscal environment that does not hinder this momentum. Many countries around the world provide substantial support for research and development, notably through generous tax credits, and this applies to the video game industry and many other sectors of the economy. As the Quebec government prepares to review its tax and financial assistance to companies, caution and vigilance will be the order of the day.

Pierre Binette, President

Who we are

R&D Capital is the Canadian expert in the financing of research and development tax credits, e-business tax credits and multimedia tax credits. Don’t hesitate to contact us. You’ll receive fast, courteous and straightforward service, and within 10 working days you’ll know what financing is available to you. For more information, you can reach us by e-mail at pbinette@rdcapital.ca or at (514) 798-0493, ext. 222. We look forward to helping you realize your projects and ambitions.