New IP Tax Incentive for Quebec Businesses

By Alina Cartan

Photo by Charles Rondeau on PublicDomainPictures.net

According to its latest provincial budget, the Quebec Government will replace the Deduction for Innovative Corporations (DIC) tax incentive with the new and improved Incentive Deduction for the Commercialization of Innovations (IDCI).

Starting January 1, 2021, businesses located in the Province of Quebec that commercialize their Intellectual Property and have incurred Research and Development Expenses in the province will receive a lower tax rate on income derived from leveraging their patents, copyrights and plant breeders rights (PBRs). Specifically, businesses will be able to benefit of an effective tax rate of 2% on the portion of the taxable income attributable to the qualified intellectual property asset.

The goal of this incentive is to “encourage the competitiveness of Quebec businesses” and “[foster] retention and valorization of intellectual properties developed in Quebec”. According to the Minister of Finance, Eric Girard, these businesses “will benefit from the most competitive tax rate in North America”.
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For general information on the Quebec Budget 2020-2021, click here.
For additional information on the IDCI, click here.

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