Benefits

Canada offers some of the most generous R&D tax incentives in the world. However, many companies are not taking advantage of their entitlements.

The government of Canada recognizes that research and development is essential to a company's success, as well as to Canada's success in the global marketplace, and is committed to fostering innovation.

The Scientific Research and Experimental Development (SR&ED) program is designed to encourage R&D in Canada, and to support the development of new or technologically improved products, services and processes. All companies - whether they are large corporations or Canadian-controlled private corporations (CCPC's) - are eligible for certain investment tax credits (ITC's) if they conduct qualifying R&D.

What are the benefits?

  • A federal tax credit of up to 35% on qualifying expenditures for qualifying Canadian-controlled Private Corporations.
  • Credits are first applied against tax owing, and depending on your taxable income, these credits may be in the form of a refund - even if you paid no tax.
  • A federal tax credit of 20% on qualifying expenditures for non-CCPC's
  • Additional provincial credits, depending on taxable income, and province
  • An immediate deduction for all R&D related labour, material, capital and certain overhead costs.

Your rate of return is dependant on many factors, including your company's taxable income, ownership structure, and types of R&D expenditures (e.g. labour, materials, capital) incurred. Our R&D calculator can help you determine the potential tax credits which you may receive for your R&D investment.

Are you getting your share?

CCRA receives over 19,685 claims for SR&ED tax credits. About 80% are small companies whose claims generally range from $20,000 to $2,000,000.

Instead of taking advantage of this source of cash, many companies do not file claims due to lack of time, resources or expertise needed to identify eligible expenditures and comply with the complex criteria defined by CCRA. Even those who do file SR&ED claims often do not take full advantage because they only capture the obvious R&D activities and miss others, such as related activities conducted at the "shop-floor" level.

The bottom line ...

Whether your company is large or small, in the manufacturing, software, or high-tech industries, these tax incentives can apply to you.

Taking advantage of these credits means you could:

  • Obtain investment tax credits on qualifying expenditures through a cash refund, a reduction in taxes payable, or both
  • Apply these tax credits to previous or future years, if not consumed in the current year
  • Consider these financial benefits in longer-term R&D planning

Global R&D specialists have helped guide many Canadian business through the process of claiming SR&ED tax credits.

  • Our consultants have many years of experience, knowledge of the regulations, and extensive experience with the audit process.
  • Our goal is to de-mystify and simplify what can be a complex and time consuming process for many companies, allowing management to focus on what's most important - their core business.
  • Our job is to ensure that our clients get their share.

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