Things you may not know about the SR&ED program.



Posted: Friday, April 24, 2009

by Courtney Wilson
Northbridge SR&ED Consultants

Have you heard about the SR & ED (Scientific Research and Experimental Development) program? There seems to be a lot of buzz about this program these days tax incentives like this are great when our economy is suffering like it currently. And it really is a great program: continue on your R & D work and the Canadian federal government will help you cover some of your costs in order to encourage technological development in Canada. The tax refunds and credits that you get can help you fund more R & D work, can help you expand your business, and can help you get an edge on the global market.

A lot of time when you look into the SR & ED program, most emphasis is put on how the SR & ED program benefits CCPC's (Canadian Controlled Private Corporation). As a result, there are some areas of the SR & ED program that are not always covered.

For example, did you know that if you are a foreign-owned corporation or a public company that you are still eligible to make a claim for the SR & ED program? You can receive a 20% tax credit on all sred activities done in Canada that can be carried back three years or forward ten years.

While that may not sound quite as attractive as what a CCPC gets, it can still make a huge difference to your business.

So what are some other facts that may not be as well known about claiming for SR & ED?

For one, most provinces have some sort of provincial incentive to do SR & ED work as well these provincial rates can range from 10% to 35%, depending on what province your company pays taxes in.

How about this one did you know that contractors that you hire can do work you can claim for SR & ED, as long as you can prove that the three criteria for the SR & ED program are met (technological uncertainty, technological advancement and technological content)? Sure thing.

Also, you can claim part of the work that your company has done out of the country. This includes any work that you may be outsourcing work to, say, China for example.

The thought of claiming SR & ED is starting to look more appealing when you consider that there are a number of different areas that you didn't think would be covered, isn't it? With all of these lesser-known areas where you can apply towards the SR & ED program, it's no surprise that there are a lot of companies that don't take advantage of this program, but that doesn't mean that you don't have to take advantage of it.

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