SR&ED Program

It is the largest single source of federal government support for industrial R&D.

Canadian taxpayers can recover up to 82% of their expenditures under the SR&ED program.



The SR&ED program is a federal tax incentive program, administered by the Canada Revenue Agency (CRA) that encourages Canadian businesses of all sizes, and in all sectors, to conduct research and development (R&D) in Canada.



The SR&ED program gives claimants cash refunds and/or tax credits for their expenditures on eligible research and development work done in Canada.  Although the program is administered by the CRA, almost all Provincial governments participate in conjunction by adding to the federal credit.

The amount that companies can recover depends on the following criteria: 

1

Location within Canada.

Canada offers Research and Development tax incentives to corporations that conduct qualified SR&ED in the particular jurisdiction. Each province has its provincial and territorial R&D tax credit rates.  Territories such as Nunavut and North West Territories and the province of Prince Edward Islands do not have R&D tax incentives. 

2

Ownership

The SR&ED tax credit recovery level is dependant on both the ownership of company, and the company’s taxable income in the preceding year. Privately-owned Canadian Corporations can earn refundable or non-refundable investment tax credits between 20 – 35% of eligible SR&ED expenditures.  Foreign-owned Canadian companies and publicly-owned Canadian corporations can earn non-refundable investment tax credits at 20%.

3

Taxable Income of the Company

The taxable income is the excess capital a company has in its possession that exceeds its investment allowance for the year.  Taxable income includes its stock, earnings, debt, purchases, investments, inventory... etc.

4

Amount of the Taxable Capital

The size of the taxable capital may be detrimental to a company’s tax credits. We do the due diligence to assess and reduce taxable capital for the purpose of applying for SR&ED tax credits.

 

Salaries and wages, including a bump-up for overhead

 

Materials consumed and destroyed

 

Subcontractors

 

Capital equipment

 

Eligible expenditures include:

 
           

​Industries that Qualify for SR&ED Tax Credits
Consumer Products
  • Apparel

  • Footwear

  • Furniture

  • House Hold Hardware

  • Major Household Appliances

  • Printing

  • Recreational Boats

  • Sporting and Athletic Goods

Manufacturing
  • Aerospace and Defence

  • Automotive

  • Biopharmaceuticals 

  • Pharmaceuticals

  • Chemicals

  • Hydrogen and Fuel Cells

  • Medical Devices

  • Plastics

  • Primary Metals

  • Rubber

  • Shipbuilding

  • Textiles

Service
  • Logistics & Freight

  • Supply Chain Management

  • Product Design

  • Product Development

  • Retail Trade

  • Tourism

Technologies
  • Alternative Energy

  • Computer Software

  • Robotics

  • Hydrogen and Fuel Cells

  • Life Sciences

  • Nanotechnologies

  • Ocean Technologies

2750 14th Avenue, Suite 201
Markham, ON Canada

 

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© 2013-2020 by ARCK Innovative Consulting Corporation.  SR&ED Tax Credit Consultants.  SR&ED Toronto.