Scientific Research and Experimental Development Tax Incentive Program (SR&ED)

By mmuise
Description:

The Scientific Research and Experimental Development (SR&ED) program uses tax incentives to encourage Canadian businesses of all sizes and in all sectors to conduct research and development in Canada.


Comments on Funding:

These tax incentives come in three forms: an income tax deduction, an investment tax credit (ITC), and, in certain circumstances, a refund.
The SR&ED investment tax credit (ITC) ranges from 15% to 35% of the applicant's qualified SR&ED expenditures.
Canadian-controlled private corporations (CCPC), generally, can earn a refundable ITC (investment tax credit) at the enhanced rate of 35% on qualified SR&ED expenditures of $3 million. They can also earn a non-refundable ITC at the basic rate of 15% on an amount over $3 million. However, if the applicant is a CCPC that also meets the definition of a qualifying corporation, it also earn a refundable ITC at the basic rate of 15% on an amount over $3 million and 40% of the ITC can be refunded.
Other corporations can earn a non-refundable ITC at the basic rate of 15% on qualified SR&ED expenditures. They can use the ITC to reduce tax payable.
Individuals (proprietorships) and trusts can earn a refundable ITC at the basic rate of 15% on qualified SR&ED expenditures. They first must apply the ITC against tax payable before the Canada Revenue Agency can refund 40% of the unclaimed balance of ITCs earned in the year.

Deadline: Rolling deadline
Eligibility:

Applicants must be:

  • Canadian-controlled private corporations,
  • other corporations,
  • individuals (proprietorships) and trusts,
  • members of a partnership,
  • doing research and development conducted, for the most part, in Canada and must be either basic research, applied research or experimental development.
Application Steps:

No specific steps have been identified.

Documentation Needed:

No specific documentation has been identified.

Other Things to Note:

Date modified: 2023-06-22

About the author
mmuise