Leave a commentThe 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. It is the largest single source of federal government support for industrial R&D.
- Reduce the general SR&ED investment tax credit
rate from 20% to 15%, effective January 1, 2014
- Remove capital expenditures from the base of eligible expenditures, effective for expenditures incurred in 2014 and subsequent years
- Gradually reduce the “prescribed proxy amount” for computing overhead expenditures, from 65% to 55% of direct labour costs. The 55% rate will be fully phased in as of January 1, 2014.
- Allow only 80% of arm’s length contract payments to be used for calculating the SR&ED tax credits, effective January 1, 2013
- Canada Revenue Agency (CRA) will conduct a pilot project to determine the feasibility of a formal pre-approval process.
- Administrative improvements to the SR&ED tax incentive program
For other business tax credit information visit Tax Tips