Does a corporation controlled by U.S. venture capital firms qualify for refundable wage tax credits?
Yes, however, since the corporation is not a Canadian controlled corporation, it will not be entitled to the enhanced rate of 35% on the first $2 million of qualifying R&D salaries paid in Quebec. Is the wage tax credit limited to R&D employees? The tax credit applies to Scientific Research and Experimental Development. This can cover activities that are well beyond what is generally referred to as R&D, for example experimentation done within the framework of a shop floor. Furthermore, in most cases, staff that support SR&ED can also qualify for the wage tax credit, for example a person recruiting an employee who will be performing Scientific Research and Experimental Development. A thorough understanding of the Quebec Taxation Act and the Federal Income Tax Act is required to fully benefit from the Federal and Quebec R&D tax incentives. How does the calculation work? Assume that a corporation is entitled to the 35% refundable Federal investment tax credit and also entitled to a 35% wa
