CDAE FAQ

Are you the owner of a company operating in information technology (IT)? You have certainly heard about the creation of a tax credit specifically dedicated to this sector of activity.

Known by the acronym CDAE, the tax credit for the development of electronic business can be an important growth lever for your company.

Here is an FAQ that will guide you in your questions about CDAE:

Question: What companies are targeted by this credit?

The companies targeted by this credit are:

Companies in the information technology (IT) sector that mainly offer services in:

• Computer systems design
• Software publishing
• Companies with an establishment in Quebec.

Question: What is the tax credit for the development of electronic commerce?

Answer: CDAE is a tax credit dedicated to companies in the IT (information technology) sector whose activities are related to electronic business.

Question: How can my company benefit from the tax credit for the development of electronic business?

Answer:

Your company could benefit from a 24% refundable tax credit on the salary of eligible employees up to $20,000 per employee, as well as a 6% non-refundable tax credit up to $5,000 per employee.

Question: What are the expenses eligible for the tax credit for the development of electronic business?

Answer:

• IT consulting services: The consulting service must be related to improving electronic business processes through technology, more specifically to the development, integration, maintenance or evolution of information systems or technological infrastructures.
• Information systems: The company must be able to contribute to the development, integration, and incidentally to the maintenance and evolution of information systems and technological infrastructures.
• E-commerce solutions: The design or development of e-commerce solutions enabling a monetary transaction between the person, on whose behalf this design or development was carried out, and that person’s clientele.
• Security services: The development of security and identification services.

Please Note that:

An activity of designing or developing e-commerce solutions enabling a monetary transaction between the person on whose behalf this design or development was carried out and that person’s clientele will no longer be an eligible activity.

However, such an activity of designing or developing e-commerce solutions may be an eligible activity if it is incidental to an eligible activity related to the development or integration of an information system or technological infrastructure.

Question: How can I apply for the tax credit for the development of electronic business?

Answer: Let our specialists help you fill out a successful CDAE declaration to minimize your involvement and maximize your claim by taking into account all eligible expenses.

Question: What are the criteria to respect during company certification?

Answer:

Criterion related to the proportion of activities:

• 75% of activities must come from IT NAICS codes
• 50% of activities must come from IT NAICS codes

Criterion related to services provided:

• Particular attention to the ultimate beneficiary of activities provided (dependency link between companies)
• Determine if personnel leasing activities come from IT NAICS codes

Criterion related to maintaining a minimum of employment:

• The company must maintain a minimum of six eligible employees at all times during the fiscal period in question.

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