Claimants can apply for SR&ED investment tax credits for expenditures such as wages, materials, machinery, equipment, some overhead, and SR&ED contracts.
It should be noted that the CRA is responsible for administering the SR&ED program, while the Department of Finance is responsible for the legislation that governs it.
The SR&ED program gives claimants cash refunds for their expenditures on eligible R&D work done in Canada. *(excerpts from CRA web site)
Who Qualifies for The SR&ED Claim?
Generally, a Canadian-controlled private corporation (CCPC) an investment tax credit (ITC) overall cash refund of approximately 68%; which includes credits for materials, sub-contractors, capital equipment and overhead. The exact percentage of refund is directly related to the type of business, the province and the nature of the expenditure.
What Kind Of Projects Qualify?
CRA states, “To qualify for the SR&ED program, work must advance the understanding of scientific relations or technologies, address scientific or technological uncertainty, and incorporate a systematic investigation by qualified personnel.
Work that qualifies for SR&ED tax credits includes:
Experimental development to achieve technological advancement to create new materials, devices, products, or processes, or improve existing ones;
Applied research to advance scientific knowledge with a specific practical application in view;
Basic research to advance scientific knowledge without a specific practical application in view; and
Support work in engineering, design, operations research, mathematical analysis, computer programming, data collection, testing, or psychological research, but only if the work is commensurate with, and directly supports, the eligible experimental development, or applied or basic research”.
If your company is:
- designing and developing a new product or process;
- designing and developing new equipment or a new tool;
- developing a technical procedure;
- improving a product;
- investigating/testing new materials;
- exploring and/or seeking means to do things less costly;
- exploring and/or seeking new uses for your products
Most probably qualify for SR&ED tax recovery. And being that it includes wages, salaries, materials and overhead, SR&ED refunds can be substantial.
AG Tax LLP Can Help
If you have any tax-related queries or need assistance with tax planning or filing please contact AG Tax. Our tax professionals are highly-experienced with US and Canadian tax laws and can provide you the right guidance to handle your tax situation.
Aylett Grant Tax LLP is a full service accounting firm with a dedicated team of experts, who are highly-qualified and experienced in handling situations related to US, Canadian, and other international tax laws. We can assist with:
- Canadian Personal and Corporate tax returns
- Cross Border Taxation and Business Planning
- US Personal and Corporate Taxation
- Disclosure of Foreign Assets and other information filings
- Retirement planning
- Estate Planning, Inheritance tax advice
To obtain a quote or to arrange for a consultation to discuss your tax related queries, please contact us at:
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