78:"Each year the SR&ED program provides over $ 4 billion in investment tax credits (ITCs) to over 18,000 claimants. Of these, about 75% are small businesses." (CRA RC4472) An expert panel appointed by the federal government recently recommended that the federal government consider redirecting some of the funds allocated to the SR&ED program to ensure that enough supports exist for larger businesses interested in taking innovations to the global market place. The SR&ED program produces less of an incentive as firms grow, since the maximum benefit any single firm can receive from the program is fixed, and not proportional to firm size.
128:: The search carried out in the experimental development activity must generate information that advances your understanding of the underlying technologies. In a business context, this means that when a new or improved material, device, product or process is created, it must embody a technological advancement in order to be eligible. In other words, the work must attempt to increase the technology base or level from where it was at the beginning of the project.
374:
documents are submitted no later than June 30, 2020. With that being said, CRA encourages taxpayers to submit their claims within a six-month time frame post-fiscal year-end, alongside their annual filings, because processing times for SR&ED tend to be much faster. In fact, if submitted within six months post-fiscal year, CRA reports a 60-day turnaround for complete claims. Claimants who submit incomplete claims can expect longer processing times.
382:
expenditures expressed in
Canadian salaries, subcontractor fees, materials, and overhead. It is possible for a claimant to be reviewed or audited on the basis of technical or financial weaknesses. In either case, the claimant bears the burden of proof and is given an opportunity to defend their claim.
381:
After submitting a SR&ED claim, the group within the CRA processes the claim on a technical and financial basis. Technical reviewers are primarily concerned with determining whether the project meets the definition of SR&ED, while the financial reviewers focus on the eligibility of associated
85:
payable, cash refunds, or both. Qualifying expenditures may include wages, expenditures for materials, equipment leases and overhead that are directly related to R&D, and 80% of the cost of eligible work by contractors. Capital equipment and equipment lease expenditures made after 1 January 2014,
377:
Some firms are in need of their SR&ED refund far sooner than the CRA can process their claim, therefore public and private lenders provide financing solutions to claimants. Public lenders tend to shape their financing terms on a firm's short-term and long-term assets, while private lenders will
364:
The SALT is CRA’s web-based tool that is used to determine through a series of concise questions if work performed has a likelihood of meeting SR&ED requirements for funding. The SALT is mainly intended for potential claimants in the small to medium business sector, and for those who are new to
385:
Given the possibility of review or audit by CRA, claimants are strongly encouraged to keep contemporaneous documentation that proves the advancement in a given area of science or technology, as well as associated expenditures. Contemporaneous documentation assumes that eligible SR&ED work is
121:
A systematic investigation entails going from identification and articulation of the scientific or technological obstacles/uncertainties, hypothesis formulation, through testing by experimentation or analysis, to the statement of logical conclusions. In a business context, this requires that the
349:
For tax years ending after 31 December 2008, CRA will only accept the new 2008 version of the Form T661. Significant changes include modifications to the “Part 2 project information” section that details the scientific and technological aspects of the SR&ED projects claimed, which has been
373:
Canada
Revenue Agency (CRA) and corresponding provincial tax authorities require all SR&ED claimants to submit their claim no later than 18 months after the effective fiscal year. For example, for a claimant with a fiscal year ending on December 31, 2018, it is required that the requisite
140:(CRA) is responsible for its administration. The CRA Information Circular 86-4R3 is a key document that provides technical guidelines to clarify and interpret the language in the tax act. CRA Interpretation Bulletin IT-151-R4 is a key document that explains SR&ED expenditures.
122:
objectives of the scientific research or experimental development work must be clearly stated at an early stage in the evolution of the project, and the method of addressing the scientific or technological obstacle/uncertainty by experimentation or analysis must be clearly set out.
378:
focus primarily on the firm's history with the SR&ED program, as well as the quality and strength of the claim in question. Given that the claim is secured by an anticipated receipt of a tax credit, firms can receive financing for both pre-file and post-file claims.
103:
The following activities are not eligible for the SR&ED program: marketing & sales, routine testing, research in social sciences or humanities, commercial production, style changes, routine data collection, petroleum or natural gas exploration/drilling.
386:
documented at the time the work was conducted. Retroactively documenting eligible SR&ED work is highly discouraged and increases a taxpayer's risk of having a claim reduced or even outright rejected. Examples of contemporaneous documentation include:
54:
1994–present - clarified definition of experimental development, broadened eligibility re
Qualified Small Businesses, allowed proxy calculation for overhead, conducted major review in 1998, simplified forms, conducted major review in
564:
114:
Technological obstacles / uncertainties are the technological problems or unknowns that cannot be overcome by applying the techniques, procedures and data that are generally accessible to competent professionals in the
179:
In addition, each province or territory may also provide provincial or territorial tax credits (subject to a cap) to qualifying corporations carrying out SR&ED in their respective province or territory:
356:
In 2013, The CRA made additional changes to the T661, where
Consultants are now required to provide their agreement and the amount they charge to clients in return for filing claims on their behalf.
44:
Industrial tax incentives in Canada have been in place since at least 1944. A 1989 report prepared by Odette Madore, Govt of Canada
Economics Division, summarizes the history of R&D tax policy.
956:
1131:
65:
The SR&ED program is intended to encourage businesses of all sizes, particularly small to medium and start-up firms, to conduct research and development (R&D) that will lead to
353:
In 2010, the CRA made minor revisions to Form T661 (10), to clarify some of the instructions and move the expenditure summaries from T661 Part 2 to a new summary section, T661 Part 6.
841:
869:
1126:
107:
In order to claim such expenditures, an assessment on scientific or technological eligibility of the claimed activities needs to be performed, according to three criteria:
1165:
451:
1045:
1039:
1021:
936:
69:. The Canadian SR&ED tax incentive is the government's largest single support program for R&D. Canada has one of the more generous R&D programs among
1010:
99:
Eligible support work: engineering, design, operations research, mathematical analysis, computer programming, data collection, testing and psychological research
1159:
1171:
541:
81:
SR&ED expenditures are deducted as business expenses, and may also qualify for investment tax credits that are received in the form of a reduction in
963:
517:"Tax Incentives for Research and Development: Trends and Issues, published by the Organisation for Economic Co-operation and Development (OECD)"
497:"Tax Incentives for Research and Development: Trends and Issues, published by the Organisation for Economic Co-operation and Development (OECD)"
156:
Canadian-controlled private corporation (CCPC): the ITC is 35% of the first $ 3 million in qualified expenditures, and 15% on any excess amount.
684:
1177:
1063:
1005:
1203:
1213:
456:
1085:
659:
28:) provides support in the form of tax credits and/or refunds, to corporations, partnerships or individuals who conduct
152:(ITC) depends on the company's legal status and amount of qualified expenditures for SR&ED carried out in Canada.
724:
619:
365:
the SR&ED program. SALT is an enhanced version of the previous tool, ESAT (Eligibility Self‑assessment Tool).
949:
136:
is responsible for the legislation that governs the SR&ED program. The Income Tax Act defines SR&ED. The
931:
565:"T4088 - Guide to Form T661 - Scientific Research and Experimental Development (SR&ED) Expenditures Claim"
340:
Northwest
Territories and Nunavut provide a 15% tax credit under the Risk Capital Investment Tax Credits Act.
1136:
639:
133:
1208:
906:
584:
1142:
239:
542:"Overview of the Scientific Research and Experimental Development (SR&ED) Tax Incentive Program"
1114:
770:
29:
926:
921:
989:
330:
Provinces and territories may offer alternative or supplemental investment programs. Examples:
1079:
1027:
984:
916:
827:
476:
59:
1051:
790:
435:
Records of resources allocated to the project, time sheets, activity records, payroll records
249:
137:
747:
1033:
1015:
855:
289:
896:
886:
704:
605:
8:
911:
813:
164:
58:
Oct 2011 The
Canadian government commissioned an expert panel to conduct a comprehensive
67:
new, improved, or technologically advanced products, processes, devices, and materials
1120:
901:
337:
Prince Edward Island offers grants (non-repayable contributions) under various funds.
209:
48:
1944-1986 - traditional tax deductions for R&D, introduced R&D tax credits,
496:
334:
Alberta offers funding through its science and research investments grant program.
891:
585:"IC86-4R3, Scientific Research and Experimental Development Information Circular"
319:
937:
Impact of the 2013 Federal Budget on SR&ED, Innovation
Funding and Startups
932:
Impact of the 2012 Federal Budget on SR&ED, Innovation
Funding and Startups
663:
1197:
229:
309:
168:
160:
82:
941:
259:
66:
887:
Scientific
Research and Experimental Development Tax Incentive Program
350:
restructured from free-flowing questions to a direct question format.
18:
Scientific Research and Experimental Development Tax Incentive Program
620:"Alberta Scientific Research and Experimental Development Tax Credit"
606:"Federal SR&ED legislative proposals status as at June 30, 2014"
219:
93:
Applied research - advancement of knowledge for a practical purpose
405:
Design, system architecture and source code (software development)
279:
269:
199:
86:
are not eligible. The following activities constitute SR&ED:
299:
172:
33:
640:"Scientific Research and Experimental Development Tax Credit"
477:"Scientific Research and Experimental Development Tax Policy"
660:"Finance - Scientific Research and Experimental Development"
359:
70:
771:"Alberta Science and Research Investments Program (ASRIP)"
96:
Basic research - advancement of knowledge for its own sake
51:
1987-1993 - mitigated abuses and simplified administration
417:
Test protocols, data, results, analysis and conclusions
917:
CRA Field of science or technology codes for Form T661
60:
Review of Federal Support to Research and Development.
368:
90:
Experimental development - technological advancement
856:"SR&ED FAQ: How Does SR&ED Work in Canada?"
828:"Canada Revenue Agency/Agence du revenu du Canada"
814:"Canada Revenue Agency/Agence du revenu du Canada"
685:"Nova Scotia Research and Development Tax Credit"
516:
1195:
1091:Scientific Research and Experimental Development
420:Final project report or professional publication
791:"TechPEI - Research and Development Initiative"
185:Provincial / Territorial Investment Tax Credits
175:: the ITC is 15% of all qualified expenditures.
30:scientific research or experimental development
957:
725:"Tax Credit for Salaries and Wages (R&D)"
1057:
971:
964:
950:
182:
872:. Government of Canada. 24 December 2021.
844:. Government of Canada. 28 December 2021.
897:CRA Information for First-Time Claimants
360:Self-Assessment and Learning Tool (SALT)
143:
112:Scientific or technological uncertainty:
697:
559:
557:
536:
534:
532:
457:Western Economic Diversification Canada
399:Design documents and technical drawings
344:
126:Scientific or technological advancement
1196:
452:Industrial Research Assistance Program
438:Purchase invoices and proof of payment
945:
842:"SR&ED Program Service Standards"
748:"Research and Development Tax Credit"
402:Project records, laboratory notebooks
554:
529:
870:"Claiming SR&ED tax incentives"
13:
1204:Tax credits and benefits in Canada
393:Documents on design of experiments
14:
1225:
1064:Labour-sponsored funds tax credit
880:
369:The SR&ED Application Process
119:Scientific and technical content:
1214:Science and technology in Canada
1073:Major deductions and incentives
862:
858:. R&D Partners. March 2018.
848:
834:
820:
806:
783:
763:
740:
717:
705:"Ontario Innovation Tax Credit"
677:
652:
999:Major tax credits and benefits
907:CRA Sample Completed Form T661
632:
612:
598:
577:
509:
489:
469:
1:
1132:Children’s fitness tax credit
912:CRA T4088: Guide to Form T661
462:
39:
1137:Universal child care benefit
7:
445:
432:Contracts, lease agreements
414:Minutes of project meetings
10:
1230:
1178:Workers Income Tax Benefit
922:CRA Sector-specific guides
390:Project planning documents
1166:Public Transit Tax Credit
1152:
1143:Working Income Supplement
1127:Children’s art tax credit
1107:
1100:
1072:
998:
977:
240:Newfoundland and Labrador
1115:Canada Child Tax Benefit
1046:Climate action incentive
1040:Child Disability Benefit
1022:Canada Employment Credit
411:Project progress reports
148:Federally, the maximum
1080:Capital Cost Allowance
1028:Canada workers benefit
990:Corporate income taxes
985:Income taxes in Canada
972:Income taxes in Canada
1058:Investment Tax Credit
1052:Disability Tax Credit
1011:Basic personal amount
408:Records of trial runs
250:Northwest Territories
150:Investment Tax Credit
144:Investment Tax Credit
138:Canada Revenue Agency
134:Department of Finance
1160:Education Tax Credit
1034:Caregiver tax credit
1016:Canada Child Benefit
429:Scrap, scrap records
396:Experimentation plan
345:Changes to Form T661
290:Prince Edward Island
1172:Textbook Tax Credit
830:. 27 November 2019.
816:. 27 November 2019.
608:. 27 November 2019.
426:Prototypes, samples
423:Photographs, videos
187:
1209:Research in Canada
666:on August 22, 2006
441:Accounting records
191:Province/Territory
183:
1191:
1190:
1187:
1186:
1121:Child Tax Benefit
328:
327:
1221:
1105:
1104:
966:
959:
952:
943:
942:
874:
873:
866:
860:
859:
852:
846:
845:
838:
832:
831:
824:
818:
817:
810:
804:
803:
801:
800:
795:
787:
781:
780:
778:
777:
767:
761:
760:
758:
757:
752:
744:
738:
737:
735:
734:
729:
721:
715:
714:
712:
711:
701:
695:
694:
692:
691:
681:
675:
674:
672:
671:
662:. Archived from
656:
650:
649:
647:
646:
636:
630:
629:
627:
626:
616:
610:
609:
602:
596:
595:
593:
592:
581:
575:
574:
572:
571:
561:
552:
551:
549:
548:
538:
527:
526:
524:
523:
513:
507:
506:
504:
503:
493:
487:
486:
484:
483:
473:
210:British Columbia
188:
1229:
1228:
1224:
1223:
1222:
1220:
1219:
1218:
1194:
1193:
1192:
1183:
1148:
1096:
1068:
994:
973:
970:
883:
878:
877:
868:
867:
863:
854:
853:
849:
840:
839:
835:
826:
825:
821:
812:
811:
807:
798:
796:
793:
789:
788:
784:
775:
773:
769:
768:
764:
755:
753:
750:
746:
745:
741:
732:
730:
727:
723:
722:
718:
709:
707:
703:
702:
698:
689:
687:
683:
682:
678:
669:
667:
658:
657:
653:
644:
642:
638:
637:
633:
624:
622:
618:
617:
613:
604:
603:
599:
590:
588:
583:
582:
578:
569:
567:
563:
562:
555:
546:
544:
540:
539:
530:
521:
519:
515:
514:
510:
501:
499:
495:
494:
490:
481:
479:
475:
474:
470:
465:
448:
371:
362:
347:
320:Yukon Territory
165:proprietorships
159:Other Canadian
146:
42:
12:
11:
5:
1227:
1217:
1216:
1211:
1206:
1189:
1188:
1185:
1184:
1182:
1181:
1175:
1169:
1163:
1156:
1154:
1150:
1149:
1147:
1146:
1140:
1134:
1129:
1124:
1118:
1111:
1109:
1102:
1098:
1097:
1095:
1094:
1088:
1086:RRSP deduction
1083:
1076:
1074:
1070:
1069:
1067:
1066:
1061:
1055:
1049:
1043:
1037:
1031:
1025:
1019:
1013:
1008:
1002:
1000:
996:
995:
993:
992:
987:
981:
979:
975:
974:
969:
968:
961:
954:
946:
940:
939:
934:
929:
924:
919:
914:
909:
904:
899:
894:
892:Income Tax Act
889:
882:
881:External links
879:
876:
875:
861:
847:
833:
819:
805:
782:
762:
739:
716:
696:
676:
651:
631:
611:
597:
576:
553:
528:
508:
488:
467:
466:
464:
461:
460:
459:
454:
447:
444:
443:
442:
439:
436:
433:
430:
427:
424:
421:
418:
415:
412:
409:
406:
403:
400:
397:
394:
391:
370:
367:
361:
358:
346:
343:
342:
341:
338:
335:
326:
325:
322:
316:
315:
312:
306:
305:
302:
296:
295:
292:
286:
285:
282:
276:
275:
272:
266:
265:
262:
256:
255:
252:
246:
245:
242:
236:
235:
232:
226:
225:
222:
216:
215:
212:
206:
205:
202:
196:
195:
192:
177:
176:
157:
145:
142:
130:
129:
123:
116:
101:
100:
97:
94:
91:
63:
62:
56:
52:
49:
41:
38:
9:
6:
4:
3:
2:
1226:
1215:
1212:
1210:
1207:
1205:
1202:
1201:
1199:
1179:
1176:
1173:
1170:
1167:
1164:
1161:
1158:
1157:
1155:
1151:
1144:
1141:
1138:
1135:
1133:
1130:
1128:
1125:
1122:
1119:
1116:
1113:
1112:
1110:
1106:
1103:
1099:
1092:
1089:
1087:
1084:
1081:
1078:
1077:
1075:
1071:
1065:
1062:
1059:
1056:
1053:
1050:
1047:
1044:
1041:
1038:
1035:
1032:
1029:
1026:
1023:
1020:
1017:
1014:
1012:
1009:
1007:
1004:
1003:
1001:
997:
991:
988:
986:
983:
982:
980:
976:
967:
962:
960:
955:
953:
948:
947:
944:
938:
935:
933:
930:
928:
925:
923:
920:
918:
915:
913:
910:
908:
905:
903:
902:CRA Form T661
900:
898:
895:
893:
890:
888:
885:
884:
871:
865:
857:
851:
843:
837:
829:
823:
815:
809:
792:
786:
772:
766:
749:
743:
726:
720:
706:
700:
686:
680:
665:
661:
655:
641:
635:
621:
615:
607:
601:
586:
580:
566:
560:
558:
543:
537:
535:
533:
518:
512:
498:
492:
478:
472:
468:
458:
455:
453:
450:
449:
440:
437:
434:
431:
428:
425:
422:
419:
416:
413:
410:
407:
404:
401:
398:
395:
392:
389:
388:
387:
383:
379:
375:
366:
357:
354:
351:
339:
336:
333:
332:
331:
323:
321:
318:
317:
313:
311:
308:
307:
303:
301:
298:
297:
293:
291:
288:
287:
283:
281:
278:
277:
273:
271:
268:
267:
263:
261:
258:
257:
253:
251:
248:
247:
243:
241:
238:
237:
233:
231:
230:New Brunswick
228:
227:
223:
221:
218:
217:
213:
211:
208:
207:
203:
201:
198:
197:
193:
190:
189:
186:
181:
174:
170:
166:
162:
158:
155:
154:
153:
151:
141:
139:
135:
127:
124:
120:
117:
113:
110:
109:
108:
105:
98:
95:
92:
89:
88:
87:
84:
79:
76:
74:
72:
68:
61:
57:
53:
50:
47:
46:
45:
37:
35:
31:
27:
23:
19:
16:The Canadian
1090:
864:
850:
836:
822:
808:
797:. Retrieved
785:
774:. Retrieved
765:
754:. Retrieved
742:
731:. Retrieved
719:
708:. Retrieved
699:
688:. Retrieved
679:
668:. Retrieved
664:the original
654:
643:. Retrieved
634:
623:. Retrieved
614:
600:
589:. Retrieved
587:. 1994-05-24
579:
568:. Retrieved
545:. Retrieved
520:. Retrieved
511:
500:. Retrieved
491:
480:. Retrieved
471:
384:
380:
376:
372:
363:
355:
352:
348:
329:
310:Saskatchewan
184:
178:
169:partnerships
161:corporations
149:
147:
131:
125:
118:
111:
106:
102:
83:income taxes
80:
77:
75:
64:
43:
25:
21:
17:
15:
1093:(SR&ED)
260:Nova Scotia
73:countries.
1198:Categories
1101:Eliminated
1006:Age amount
799:2006-09-03
776:2006-09-03
756:2006-09-03
733:2015-02-22
710:2009-03-16
690:2013-06-20
670:2006-09-03
645:2013-06-20
625:2009-03-02
591:2007-08-14
570:2009-06-23
547:2009-07-08
522:2012-01-04
502:2012-01-04
482:2012-01-04
463:References
40:Background
1108:Childcare
26:SR&ED
446:See also
220:Manitoba
978:General
294:
280:Ontario
274:
270:Nunavut
254:
200:Alberta
1180:(WITB)
1168:(PTTC)
1153:Others
1139:(UCCB)
1117:(CCTB)
300:Quebec
173:trusts
171:, and
115:field.
34:Canada
1174:(TTC)
1162:(ETC)
1145:(WIS)
1123:(CTB)
1082:(CCA)
1060:(ITC)
1054:(DTC)
1048:(CAI)
1042:(CDB)
1036:(CTC)
1030:(CWB)
1024:(CEC)
1018:(CCB)
794:(PDF)
751:(PDF)
728:(PDF)
194:Rate
927:ESAT
324:20%
314:15%
304:30%
284:10%
264:15%
244:15%
234:15%
224:20%
214:10%
204:10%
132:The
71:OECD
55:2010
22:SRED
32:in
24:or
1200::
556:^
531:^
167:,
163:,
36:.
965:e
958:t
951:v
802:.
779:.
759:.
736:.
713:.
693:.
673:.
648:.
628:.
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