The Canadian government provides more that $3 billion annually through tax incentives to encourage knowledge and technology advancements in the private sector. SR&ED may take the form of basic research, applied research, and experimental development. Canada Revenue Agency disburses incentives as an income tax deduction, an investment tax credit, or a cash refund.
Simply put, in order for work either planned or already undertaken to qualify for the program, it must satisfy two criteria:
1. Why: In every industry sector, there are gaps in today's knowledgebase that need to be crossed in order to make technological advancements. Regardless of whether successful outcomes are achieved, this scientific or technological uncertainty is the key in work to be considered eligible.
2. How: The work performed either by staff or contractors must take the form of systematic analysis through purpose built experimentation, and again, success is not a necessary outcome.
Canadian controlled private corporations are eligible for the maximum rate of 35% on qualified expenses. While other types of businesses may also capitalize on the program, the tax credit structure varies.
We are professionals in this process and provide complete support, working on a contingency basis so there is no cost upfront. However, you may explore the Canada Revenue Agency Self Assessment and Learning Tool (SALT). As stated in the tool, after you have obtained your results you are encouraged to contact a SR&ED Specialist to consult you on the process.
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