Development of E-Business (TCEB) The Tax Credit for the Development of E-Business (“TCEB”) was put in place to provide financial assistance to specialized corporations in the information technology (IT) sector, primarily in the fields of computer system design and software publishing. The tax credit is divided into two parts: The rate of the refundable part is equal to 24% of an eligible wage, up to an annual limit of $ 20,000 per eligible employee. The rate of the non-refundable part is equal to 6% of an eligible wage, up to an annual limit of $ 5,000 per eligible employee. Even though Investissement Québec is responsible for issuing eligibility certificates, the application for the credit and calculation are done at the end of the taxation year, when the corporation files its income tax return with Revenu Québec. In the calculation, the wage of an employee who carried out activities under a contract entered into after September 30, 2015, with a government entity is not eligible. The non-refundable part of the credit may be used to reduce the provincial tax to zero. The unused portion of the tax credit, for a specific year, may be carried back three years and forward 20 years. Corporations eligible for the TCEB To be eligible, a corporation must respect these three criteria: 1. Percentage of activities in the IT sector At least 75% of the corporation’s activities must constitute activities in the IT sector, and these activities are grouped under the following NAICS codes: 334110 – Computer and Peripheral Equipment Manufacturing; 334220 – Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing; 417310 – Computer, Computer Peripheral and Pre-Packaged Software Wholesaler-Distributors; 443120 – Computer and Software Stores; 511210 – Software Publishers; 51821 – Data Processing, Hosting and Related Services; 541510 – Computer Systems Design and Related Services. In addition, at least 50% of the corporation’s gross income be earned from activities included under the following NAICS codes: 511210 – Software Publishers; 541510 – Computer Systems Design and Related Services; or a combination of these activities; 561320 – Temporary Help Services; 561330 – Professional Employer Organizations. 2. Services Provided For a corporation to be considered eligible, at least 75% of its activities covered by NAICS code 541510 must consist either of services ultimately provided to a person with whom it is at arm’s length or services relating to applications developed by the corporation that is used exclusively outside Quebec, or a combination of these two items. 3. Retention of six eligible jobs The corporation must retain a minimum of six eligible employees throughout the taxation year in question. An employee is eligible if these three conditions have been satisfied: 1. He or she is not a “specified shareholder” within the meaning of the Taxation Act; 2. He or she held a full-time job involving at least 26 hours of work a week, for an expected minimum period of 40 weeks. 3. He or she devoted at least 75% of his or her time to carrying out, supervising or directly supporting the work relating to the execution of an eligible activity: Information technologies consulting services relating to technology, systems development, e-business processes, and solutions; Development, integration, maintenance and evolution of information systems technology infrastructure; Design and development of e-commerce solutions; Development of security and identification services relating to e-commerce activities.