Quebec Business Tax Credits, Incentives & Deductions (2025 Guide)

Quebec’s provincial tax system offers a robust suite of business tax credits, deductions, and direct incentives to encourage innovation, job creation, regional development, sustainability, and growth. Whether you’re a corporation, partnership, startup, manufacturer, multimedia firm, or small business, understanding Quebec’s unique opportunities—alongside federal business incentives—can significantly boost your after-tax profits and access to funding. This comprehensive guide covers every major Quebec business tax credit, eligibility rule, and practical claim tip for 2025.

What’s Covered: Quebec’s most valuable business tax credits, grants, and deductions—plus key eligibility info
Who’s Eligible: Quebec corporations, tech startups, manufacturers, digital/multimedia firms, game studios, clean-tech, and more
Quick Links: Small Business Deduction, R&D/Innovation, Multimedia/Game/Film, Green, Hiring

For federal programs, visit: Canada-Wide Business Credits

Modern Montreal business district skyline with office towers and a business team meeting

Quebec Small Business Deduction & Corporate Tax Reductions

Small Business Deduction (SBD): Quebec offers a reduced corporate income tax rate (currently 3.2%) on the first $500,000 of active business income for Canadian-Controlled Private Corporations (CCPCs) carrying on business in Quebec. This is in addition to the federal SBD.
Eligibility: Incorporated businesses with active business income in Quebec, meeting employee and activity thresholds (at least 5,500 employee hours or qualifying primary activities).
Restrictions: Investment income and certain professional corporations may be excluded. The deduction is phased out for taxable capital between $10M and $15M.
Claim Process: Calculate on Schedule 34 of the Quebec corporate tax return (CO-17).
Tip: Keep detailed payroll records. If you do not meet the hours threshold, review if your business qualifies as a primary sector (manufacturing, tech, etc).

Innovation, R&D & Technology Tax Credits

R&D (SR&ED) Tax Credit: Quebec provides a refundable R&D tax credit for eligible salaries, subcontracting, and university research expenditures. Stacks with the federal SR&ED credit. Rates vary by company size, type of R&D, and whether the work is performed in Quebec.
Official Quebec R&D Credit
Eligibility: Corporations with eligible R&D activities conducted in Quebec, including experimental development, applied research, university contracts, and pre-competitive research.
Enhanced Rates: Higher rates for university/public research contracts, and for SMEs.
Innovation Tax Credit: Refundable credit for eligible expenditures related to the commercialization of innovation (patents, new technology adoption).
How to Claim: File Quebec form RD-1029.7 and supporting schedules with your CO-17.
Tip: Documentation is essential—maintain time logs, project descriptions, and detailed expenditure tracking.

Multimedia, Video Game, & Film/TV Production Credits

Multimedia Production Tax Credit: Up to 37.5% refundable credit for eligible salaries in the creation of interactive digital media (video games, e-learning, educational apps) in Quebec.
Official Multimedia Credit
Film & Television Production Credits: Several refundable credits (up to 20% of eligible Quebec labour, with supplements for regional and French-language productions) for Quebec film and TV projects.
Production Services Credit: Refundable credit for foreign and domestic productions filming in Quebec, including visual effects and animation.
Sound Recording Production Credit: Refundable credit for eligible sound recording work performed in Quebec.
Book Publishing & Print Media Credits: Refundable credits for eligible expenditures in Quebec-based book publishing and print media innovation.
Tip: Application and pre-approval are often required (e.g., SODEC for film/media). Maintain payroll and project records for all eligible employees.

Green, Clean Tech & Manufacturing Incentives

Green Investment Tax Credit: Refundable credit for eligible investments in green technology, renewable energy, or clean manufacturing in Quebec. Rates and eligibility may vary by sector and project.
Capital Cost Allowance (CCA): Enhanced depreciation for certain clean energy and manufacturing assets, following both federal and Quebec-specific rules.
Manufacturing and Processing Investment Credit: Refundable credit for eligible expenditures on manufacturing/processing equipment acquired for use in Quebec.
Electricity Discount & Energy Efficiency Grants: Quebec offers direct grants and electricity rate discounts for large industrial projects, green retrofits, or investments in energy efficiency.
Tip: Most green/manufacturing credits require that the investment is made and used primarily in Quebec. Check eligibility before major capital expenditures.

Hiring, Training & Apprenticeship Credits

Tax Credit for On-the-Job Training: Refundable credit for employers who provide eligible workplace training, especially for apprentices or young workers, in recognized trades or professions.
Official On-the-Job Training Credit
Tax Credit for the Retention of Experienced Workers: Refundable credit for employers who hire or retain workers aged 60+.
Co-operative Internship Tax Credit: Refundable credit for eligible salaries paid to students in recognized co-op or internship programs.
Hiring Credit for Recent Immigrants & Underrepresented Groups: Targeted credits for hiring certain recent immigrants, Indigenous persons, or those with disabilities.
Canada Job Grant (Quebec): Federal-provincial program for subsidizing employee training costs, with funding for both new and existing staff.
Tip: Many credits require a formal training plan and approval—apply before starting the placement.

Other Key Quebec Business Credits & Deductions

Investment Tax Credit for Regions: Refundable credit for eligible investments made in designated Quebec regions, to stimulate regional economic development.
E-Business (CDAE) Tax Credit: Refundable credit for corporations in the IT or e-business sector employing full-time IT professionals in Quebec.
International Financial Centre Credit: Refundable and non-refundable credits for international financial sector activities carried out in Montreal.
Mining, Oil, & Gas Exploration Credits: Refundable credits for eligible exploration and development expenditures in Quebec.
Charitable Donation Credit: Provincial credit for eligible donations to registered Quebec charities, stackable with federal credit.
Property Tax Rebates & Utility Grants: Some Quebec municipalities offer property tax breaks or utility rebates for eligible business investments.

How to Claim: Filing & Documentation Tips

File your Quebec corporate tax return (CO-17) using all required schedules and forms for each credit (e.g., RD-1029.7 for R&D, CO-1029.8.36.M for multimedia).
Keep comprehensive records: payroll, contracts, technical logs, invoices, training plans, and supporting documents for all expenditures and projects.
Obtain pre-approvals where required (e.g., SODEC for media credits, Investissement Québec for regional/innovation credits).
Unused non-refundable credits may be carried forward (generally up to 20 years) or back (3 years), depending on the credit.
Consult a tax professional or use certified Quebec tax software for complex claims and to maximize stacking opportunities.

Quebec Business Tax Credits: Frequently Asked Questions

Can Quebec business credits be combined with federal programs?

Yes. Most Quebec business credits (R&D, multimedia, innovation, small business deduction) are stackable with federal incentives, maximizing your tax benefit. Be sure to coordinate claims to avoid overlap on the same expenditures.

Are startups and tech firms eligible for Quebec credits?

Absolutely. Quebec offers substantial incentives for startups and technology companies, including refundable credits for R&D, e-business, hiring, and digital media. See also our Startup Tax Incentives guide.

Can partnerships or sole proprietors claim these credits?

Most Quebec corporate tax credits are available only to corporations. Partnerships with eligible corporate partners may qualify. Sole proprietors have access to some deductions and federal programs, but most Quebec incentives require incorporation.

How do I know if my project is eligible for multimedia or film credits?

Eligibility depends on the content type, Quebec labour/content, Canadian control, and compliance with program criteria. Review the official rules or consult a specialist. For film/media, registration with SODEC or Investissement Québec is often required.

What if I missed claiming a Quebec business credit on a prior return?

You can request an amended return (CO-17.R or ReFILE) for several prior years for most credits. Always keep all supporting documentation for audit purposes.

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