Facts About Canada’s SRED Program

According to multiple studies conducted by the Conference Board of Canada, of all the G-7 nations, it is Canada that offers more in the way of R&D tax credits than any other. This is mainly due to the large success of their SR&ED Program, which sees billions of dollars go to thousands of eligible Canadian companies each and every year. Moreover, the country also has many provincial R&D tax credits that can be taken advantage of as well.

Canada’s many R&D tax credits offer a great number of Canadian companies, both large and small, the opportunity to fully write off, or at least reduce, many of the costs involved with Scientific Research and Experimental Development (SRED).  Here is a look at some cold hard facts in regards to Canada’s SR&ED tax incentives:

•  Ongoing: Canada has an SR & ED tax credit program that is indeed ongoing.
• Discretion Over Deductions: The SR&ED program allows for the taxpayer to have total control over the qualifying deductions. Qualified expenditures are accumulated in a pool that is known as the SR&ED expenditure pool. Since the pool doesn’t expire, the timing of any deductions is left to the discretion of the individual tax payer who is eligible to take them.
•  Expanded Tax Credits Available: SR & ED tax credits are typically calculated at 20 percent of qualified expenditures however, for Canadian-controlled private corporations, or CCPCs, that rate is enhanced to 35 percent. That enhancement is subject to an annual limit of $3 million.
• Unused Credits Aren’t Lost: Any unused credits are allowed to be applied against taxes that are payable for 20 subsequent taxation years or three preceding taxation years.
• Arms Length R&D Cost Eligible: Complete cost of any arms length R&D conducted is eligible for a tax credit.
• Capital Items Eligible: Eligible tax credits are also available for capital items.
• Overhead Costs Eligible: Some overhead costs that are associated with SRED are eligible for a tax credit.

When Thinking SR&ED Tax Credits, Think EVAMAX SRED Consultants

Anytime that a company can get eligible tax credits to help offset the cost of R&D it is a wonderful thing. With the many R&D tax credits available through the SR&ED Program, combined with the possible provincial R&D tax credits, it stands to reason that when a company is thinking R&D tax credits, they should think EVAMAX SR&ED consultants .