Does Your Industry Qualify for Tax Credits?

  • By Nicole Mirabal
    • Jul 20, 2023
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Industry tax credits

Tax credits offer an incredible funding opportunity for SMEs, which begs the question, is there a tax credit for every industry?

As a new SME business in search of funding, it’s essential to explore all available avenues to support your growth and success. Luckily, the Canadian government offers various tax credits, grants, and incentives designed to assist businesses in specific industries.

These specialized tax incentives are designed to assist businesses operating in specific sectors, such as agriculture or manufacturing. By leveraging these credits, you can access financial support tailored to the unique needs and challenges of your industry.

In this article, we will explore three prominent tax credits available in Canada, including the Scientific Research and Experimental Development (SR&ED) tax credit, the multimedia tax credit, and the E-business tax credit and the eligible industries. Additionally, we will highlight other funding opportunities available to you to generate cash flow in your industry.

Industry tax credit for research

Scientific Research and Experimental Development (SR&ED) Tax Credit:

Eligible Industries: All Industries

The SR&ED tax credit is a flagship program encouraging Canadian businesses of all sizes and sectors to conduct research and development (R&D) within Canada. Eligible businesses can claim a deduction or credit based on income expenditures and costs associated with R&D activities. The credit rate varies between 15% and 35%. Each province may also offer a complimentary credit.

Multimedia Tax Credit:

Eligible Industries: Interactive Digital Media

The multimedia tax credit is a valuable federal program supporting Canadian companies involved in developing interactive digital media products. This incentive offers an attractive refundable tax credit of 40% on eligible salaries and wages, providing a significant boost to businesses operating in this sector. With a maximum credit limit of $500,000 per year, the multimedia tax credit stimulates innovation and growth within the industry. Eligible products include video games, educational software, mobile apps, and other digital media products that combine multiple forms of content, such as text, audio, and video. This incentive varies by province.

Industry tax credit software and media

E-Business Tax Credit:

Eligible Industries: Information Technology

The E-business tax credit, delivered by Revenu Québec, is available to support companies specializing in the Information Technology (IT) sector in Quebec, particularly in computer system design and software publishing. This incentive aims to consolidate and develop the IT sector within the province by granting a tax credit of 30% per eligible salary.

Bonus Funding Opportunities:

If you’ve made it this far, and are still looking for more industry-specific funding, we’re going to let you in on bonus funding opportunities:

In addition to tax credits, certain industries may be eligible for government grants. These grants provide financial assistance for specific projects, initiatives, or sectors, promoting growth and innovation.

Additionally, businesses can optimize their cash flow through sales tax recovery, where they reclaim previously paid sales taxes. This approach injects liquidity into the business, providing a valuable source of funding.

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Author

Nicole Mirabal
Nicole Mirabal

Brand Content Executive

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