E-Business and Artificial Intelligence Tax Credit

The CDAE / CDAEIA tax credit is available to companies that carry out eligible digital or IT-related activities in Quebec. In general, a business may qualify if it has a permanent establishment in Quebec and operates in areas such as software development, SaaS platforms, data processing, IT consulting, cybersecurity, or other information technology services. 

Eligibility is mainly based on the company’s activities and workforce. A significant portion of its operations must involve qualifying e-business functions, and it must employ eligible employees in Quebec who are directly involved in technical or development work. The credit is typically calculated based on the salaries paid to these eligible employees. 

Companies that primarily use technology without developing or integrating it, or those with limited eligible activities in Quebec, generally do not qualify. 

Under the Tax Credit for the Development of E-Business and Artificial Intelligence (CDAEAI), eligible Quebec companies can recover up to 30% of eligible employees’ salaries through a combination of refundable and non-refundable tax credits. 

For the 2025 taxation year, the credit is generally structured as follows: 

• 23% refundable tax credit – paid directly to the company, even if it has no tax payable  

• 7% non-refundable tax credit – applied against corporate income tax owed, providing additional savings for profitable companies  

To qualify, salaries must be paid to full-time employees in Quebec who are certified by Investissement Québec and perform eligible technical functions. These typically include roles such as software development, systems architecture, database design, AI and machine learning development, cybersecurity, and other functions related to building or delivering electronic business solutions. 

Overall, this incentive can significantly reduce the cost of maintaining a skilled digital workforce and improve a company’s ability to reinvest in innovation and growth. 

The Québec CDAE/ CDAEAI tax credit is based primarily on eligible salaries paid to qualifying employees. 

Eligible expenses include: 

• Qualified employees’ salaries for the fiscal year 

• Only the portion of salary that exceeds the annual exclusion threshold per employee (indexed each year and aligned with the Québec basic personal amount) 

• Salaries must relate to employees working on eligible IT activities such as software development, systems integration, and data processing in Québec 

• Employees must spend at least 75% of their time on eligible activities to be considered qualifying employees 

Non-eligible portions (such as the exclusion threshold or non-qualifying activities) are removed before calculating the credit. 

 At Ayming Canada, we help businesses correctly identify eligible salaries and apply the exclusion threshold to ensure CDAE / CDAEAI tax credit claims are optimized and compliant.

You first apply to “Investissement Quebec” for the two certificates and then fill out the appropriate filing documentation to be sent with your CO-17. At Ayming, we guide you through this process to ensure your application is accurate, complete, and positioned for maximum benefit while reducing compliance risk. 

Companies often run into issues with CDAEAI tax credit claims in Québec due to misinterpretation of eligibility rules set by Investissement Québec. 

The most common mistakes include: 

• Assuming AI automatically qualifies the company, instead of meeting core IT sector and activity requirements 

• Treating AI as a minor feature rather than ensuring it is significantly integrated into eligible electronic business activities 

• Misclassifying work that is actually routine IT operations, maintenance, or infrastructure support as eligible activities 

• Not meeting key thresholds for eligible IT revenue or minimum full-time employees in Québec 

• Overlooking whether the company’s activities are truly centered on software development, systems design, or data processing 

• Poor documentation of how AI is used within qualifying projects or mandates 

CDAEAI Tax Credit eligibility is highly activity-based, and small gaps between perceived and actual qualifying work are a frequent reason claims are challenged or denied. 

At Ayming Canada, we help companies validate eligibility early, reduce audit risk, and ensure your claims are properly aligned with Investissement Québec requirements. 

No. Using artificial intelligence (AI) does not automatically make a company eligible for the CDAEAI tax credit in Québec. 

Eligibility is based on whether the company operates in qualifying information technology (IT) activities, such as software development, systems design, or data processing, and meets required conditions related to eligible revenue and full-time employees. 

AI must also be significantly integrated into eligible electronic business activities. Simply using AI tools or adding AI as a minor feature is not enough to meet CDAEAI eligibility requirements. 

At Ayming Canada, we help companies assess their activities and determine whether their AI-driven projects meet the criteria for CDAEAI and other Québec innovation tax credits, ensuring claims are properly structured and optimized.