Amount: Up to $3,000,000
The Scientific Research & Experimental Development Tax Credit (SR&ED) Program is a federal tax incentive program designed to encourage Canadian businesses of all sizes and from all sectors to conduct R&D in Canada. These incentives may be claimed by Canadian-controlled private corporations at the enhanced rate of 35% (up to $3,000,000) on qualified (SR&ED) expenditures. Other corporations, as well as individuals and trusts, can also reap the benefits.
Eligibility Criteria: Scientific Research & Experimental Development Tax Credit (SR&ED)
- Must be Canadian Controlled Corporation or Partnership;
- Must conduct scientific research and experimental development, i.e. systematic investigation or search that is carried out in a field of science or technology by means of experiment or analysis and that is:
- basic research, namely work undertaken for the advancement of scientific knowledge without a specific practical application in view;
- applied research, namely work undertaken for the advancement of scientific knowledge with a specific practical application in view; or
- experimental development, namely, work undertaken for the purpose of achieving technological advancement for the purpose of creating new, or improving existing, materials, devices, products or processes, including incremental improvements thereto; and, in applying this definition in respect of a taxpayer, includes:
- work undertaken by or on behalf of the taxpayer with respect to engineering, design, operations research, mathematical analysis, computer programming, data collection, testing or psychological research, where the work is commensurate with the needs, and directly in support, of work described in paragraph (a), (b), or (c) that is undertaken in Canada by or on behalf of the taxpayer, but does not include work with respect to
- market research or sales promotion;
- quality control or routine testing of materials, devices, products or processes;
- research in the social sciences or the humanities;
- prospecting, exploring or drilling for, or producing, minerals, petroleum or natural gas;
- the commercial production of a new or improved material, device or product or the commercial use of a new or improved process;
- style changes; or
- routine data collection.
Eligible Cost: Scientific Research & Experimental Development Tax Credit (SR&ED)
- Cost of R&D that meets definition above
- Labour cost
- Subcontractors cost
- Materials cost
- File income tax return along with SR&ED Expenditures Claim Form.
- File Investment Tax Credit Form
- Submit technical and financial supporting evidence (various records, photographs, videos, prototypes eg.) if required
Examples of the Projects Approved by Scientific Research & Experimental Development Tax Credit (SR&ED)
Every year Canada Revenue Agency approved billions of dollars worth of Scientific Research & Experimental Development Tax Credit (SR&ED) claims. Stay tuned for the upcoming updates of the program in 2017/2018 fiscal year.