Benefiting from a tax holiday for a large investment project

A corporation or partnership that carries out a large investment project in Québec after March 21, 2023, may, under certain conditions, benefit from a combination of:

• an income tax holiday;
• a holiday from the employer contribution to the Health Services Fund.

The new tax holiday has a 10 year duration.

Income tax holiday

An eligible corporation may take advantage of this relief for a given taxation year.

To be eligible, the corporation must have:

• claimed all of its discretionary deductions (e.g., capital cost allowance);
• applied its remaining non-capital losses.

The determination of the amount of the income tax holiday must not exceed the corporation’s adjusted taxable income.

Holiday from employer contributions to the Health Services Fund

An eligible corporation may be exempt from paying part of its contributions, such as those to the Health Services Fund (HSF) on salaries paid to its employees, for a specific period (exemption period).

However, this exemption does not apply to an employee whose duties consist of building, expanding or modernizing the project site, nor does it apply to certain forms of remuneration, such as:

• directors’ fees;
• bonuses;
• performance bonus;
• taxable benefits (e.g., company car);
• commissions.

Only a corporation or partnership may apply for an initial qualification certificate. Joint applications (made by several businesses, companies or firms) are not permitted.

To be eligible, the project submitted by the corporation must:

• be carried out in Québec (the assets used for the project must be operated there);
• have investment expenditures of at least $100 million (e.g., purchase of new equipment, construction);
• incur eligible expenditures before the expiry of the investment period, even if they are not yet fully paid for;
• incur the expenditures within 48 months (4 years), known as the investment period;
• have an investment period that began within 12 months of the initial certificate application (the corporation must indicate the date in the application);
• belong to a non-excluded sector of activity (see page A.21 of the Additional Information – March 2023). The corporation itself must not be excluded: it must not exceed 25% of its total gross income from an excluded sector. Revenu Québec will verify its application with this rule once the project is completed;
• be mainly related to critical and strategic minerals (CSM), in the case of a project in the mining sector (NAICS code 21). Please note: ‘mainly’ generally means that 50% or more of the project is related to CSMs.
• The project may span more than one region: the main region is then determined according to the majority of eligible expenses incurred there.

A corporation that reaches the minimum investment threshold of $100 million during its 48‑month investment period and chooses to begin benefiting from its tax holiday may add investments to its limit until the end of the period. This period begins on the date indicated on the initial qualification certificate issued for the project.

The limit on eligible expenditures is $1 billion. It applies to a project, not a corporation.

As of April 1, 2026, administrative fees apply to the processing of all applications pertaining to the tax holiday for large investment projects. An application will not be processed until the Ministère des Finances has received payment in accordance with the payment terms indicated on the invoice. 

Please note that no refund will be issued if an application is denied.

The fees that a corporation or partnership must pay depend on the type of application, and are indexed on January 1 each year. 

Fee Schedule

Payment information must be submitted within 60 days of the invoice being issued.

To be eligible for the new tax holiday, a corporation or partnership will have to obtain an initial certificate as well as annual certificates issued by the Minister of Finance.

Application for an initial certificate

The corporation must submit an application for an initial certificate for each project. This application must be:

• submitted no later than December 31, 2029;
• made for each project (a corporation cannot submit an eligibility application that includes multiple investment projects);
• submitted before the expenditure for the investment project exceeds $1 million.

Annual certificate

After obtaining the initial certificate, the corporation may apply for an annual certificate for each taxation year or fiscal period included in its tax-free period.

The annual certificate certifies that:

• the corporation is carrying out, in the taxation year, the activities relating to the large investment project regarding which an initial certificate was issued;
• the project is recognized for the taxation year as a large investment project.

The application for an annual certificate must be made before the end of the 15^th month following the end of the taxation year or fiscal year.

The annual certificate may be issued for an investment project if the total investment expenditure attributable to the carrying out of the investment project is at least $100 million. This total may be reached at any time during the year or fiscal year.

Independent auditor’s report

When a business makes its first application for an annual certificate for an investment project, it must provide a report prepared by an independent auditor.

The independent auditor’s report must certify:

• the total eligible investment expenditures attributable to the carrying out of the project;
• the breakdown of the expenditures by location where the property will be used;
• the total government or non-government amount of assistance received or expected;
• any other information that may be required for the administration and enforcement of this measure.

In the event that the corporation submits its first application for an annual certificate before the end of the 48 month investment period, it is required to file:

• a revised auditor’s opinion confirming the information in the initial report or changes made;
• any other information that may be required for the administration and enforcement of the measure.

The former tax holiday for large investment projects (former TH-LIP) was abolished on March 21, 2023. No new application for the issuance of an initial certificate will be accepted under this former tax holiday.

The elimination of the former TH-LIP does not affect the eligibility of corporations that already hold an initial certificate, or that have applied for one. This includes partnerships and corporations that are members of partnerships.

Such corporations or partnerships may continue to benefit from this tax holiday until the end of the tax-free period for that project, according to the rules that currently apply.

Applicable rates

If an initial qualification certificate under the former tax holiday was issued to a corporation or partnership in respect of a project, it will not be able to benefit from the new tax holiday rates.

The new rates apply only to projects for which an initial qualification certificate has been issued under the new tax holiday.

Choice of an alternative calculation method 

A corporation or partnership may choose an alternative calculation method under the former tax holiday. The method may be applied starting with the taxation year or fiscal period that begins after the date on which the election is filed.

This election must be sent to the Minister of Finance on or before the later of the following dates:

• the date of application for the first annual certificate;
• December 31, 2024.

Period covered by the alternative method

A corporation or partnership that chooses the alternative method can benefit from tax assistance for a period corresponding to the number of days remaining in its tax-free period, determined according to the terms of the former tax holiday, that is, up to a maximum of 15 years.

This online service is intended for corporations wishing to benefit from an income tax holiday or an exemption from employers’ contributions to the Health Services Fund (HSF). 

Holders of an initial certificate issued under either the former or the new tax holiday may use this online service.

Please ensure you have the board of directors’ resolution readily available confirming that you have been authorized to manage the corporation’s tax holiday and to notify the Ministère des Finances.

A user guide is available for you.

Guide de l'utilisateur - Nouvelle plateforme Web du congé fiscal pour grands projets d'investissement (PDF 1.28 Mb)

Access the online service (in French only)

The rate of the new tax holiday available to a corporation or a partnership is established according to the territory where the large investment project is carried out. It is equal to one of the following rates:

• 15% if the large investment project is carried out in the metropolitan communities of Montréal or Québec City;
• 20% if the large investment project is carried out outside the metropolitan communities of Montréal and Québec City;
• 25% if the large investment project is carried out in a territory with low economic vitality.

The territories with low economic vitality are the following regional county municipalities (RCMs) and urban agglomerations:

• Abitibi Ouest;
• Antoine Labelle;
• Avignon;
• Bonaventure;
• Charlevoix Est;
• La Haute Côte Nord;
• La Haute Gaspésie;
• La Matanie;
• La Matapédia;
• La Mitis;
• La Tuque;
• La Vallée de la Gatineau;
• Domaine-du-Roy;
• Le Golfe du Saint Laurent;
• Le Rocher Percé;
• Les Appalaches;
• Les Basques;
• Les Etchemins;
• Les Sources;
• L’Islet;
• Manicouagan;
• Maria Chapdelaine;
• Maskinongé;
• Mékinac;
• Montmagny;
• Papineau;
• Pontiac;
• Shawinigan;
• Témiscamingue;
• Témiscouata.

Special rules will be provided for determining the tax holiday rate when a project is to be carried out in more than one territory. Consult the MRC map to learn more about these rules. (PDF 3.54 Mb).