What is SR&ED?
The Scientific
Research and Experimental Development (SR&ED) program is a federal tax
incentive program to encourage Canadian businesses to conduct research and
development (R&D) in Canada that will lead to new, improved, or
technologically advanced products or processes.
What is eligible?
SR&ED eligibility is determined on a project-by-project basis.
Each project must satisfy three criteria to be potentially eligible for
a refundable tax credit (or reduction of taxes payable) for related R&D
expenses:
- New
knowledge has been generated by resolving technological challenges of the
project.
- New
knowledge has been generated through a systematic investigation by qualified
personnel.
- Technological challenges of the project could not be overcome by
generally available knowledge or experience but required experiment and
analysis.
The
SR&ED program is the largest single source of federal government support
for industrial research and development.
The SR&ED program provides
over $4 billion in investment tax credits (ITCs) to over 18,000 claimants every
year. Of these, about 75% are small businesses.
What does that mean for
your company?
Here are some examples of the types of refunds that are
available:
- T4 Wages
43-73%
- Material
& Contractors 35-48%
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