Canada Revenue Agency (CRA) commits to processing refundable claims which are filed jointly with the year-end T2 within 120 days. Non-refundable claims are processed within 360 days.
Amended refundable and non-refundable claims are processed within 240 and 360 days respectively. In our experience, most claims are approved within 2 to 6 months.
Canadian taxpayers can recover up to 68% of their expenditures, depending on their location (within Canada), ownership (Canadian vs. Foreign, Private vs. Public), taxable income (in the prior fiscal year), and size (amount of capital employed).
Scientific Research and Experimental Development 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. It is the largest single source of federal government support for industrial R&D.
Highlights:
- The SR&ED Program gives claimants cash refunds and / or tax credits for their R&D expenditures on eligible R&D work done in Canada.
- The SR&ED program is most generous program in G-8 nations that provide indirect support to conduct R&D in Canada. Any size business can make a claim and there is no cap.
- Canadian companies can recover up to 68% of the R&D costs.
- The SR&ED program accounts for about 25% of federal R&D grants and tax credits.
- The SR&ED program provide about $3.5billion in tax credits to 24,000 claimants every year.
- About 70% of the claimants are small and medium size business who are eligible for refundable tax credits.
Many of our current clients did not initially consider any of their work to be R&D. This is a common misconception. Through the SR&ED program common, everyday activities on the shop floor or in an industrial setting are eligible - as defined by the CRA guidelines. Additionally, work does not have to represent a breakthrough or a 'quantum leap' in your industry.
Small incremental improvements and advancement in the design or formulation, materials, quality, durability, or energy efficiency of your product or process are sufficient.
Reliance Consulting can conduct a free-of-charge assessment to determine whether your specific work qualifies for the SR&ED program.
All project-related expenditures can be submitted. These typically include: salaries and wages, materials destroyed or used to build prototypes, work subcontracted to other Canadian taxpayers.
