Scientific Research and Experimental Development Tax Credit Program
The Scientific Research and Experimental Development Tax Incentive Program (often referred to as simply SR&ED or SRED) provides tax incentives (in the form of tax credits and/or refund) to Canadian businesses to support applied research and experimental development conducted in
Introduced in the 1980s, the SR&ED program is intended to encourage businesses of all sizes -- particularly small and start-up firms -- to conduct SR&ED that will lead to new, improved, or technologically advanced products or processes. As Canada's largest federal program in support of industrial R&D, SR&ED receives more than 11,000 claims annually for approximately $1.8 billion in tax credits. [cite web|url=http://www.cra-arc.gc.ca/E/pub/tg/rc4382/rc4382-e.html|title=Strategic Business Plan 2005|accessdate=2006-09-02]
SR&ED expenditures (already deducted against revenue) may qualify for investment tax credits (i.e., a reduction in
income taxespayable), cash refunds, or both. Qualified expenditures may include wages, materials, machinery, equipment, some overhead, and SR&ED contracts from the following activities:cite web|url=http://www.cra-arc.gc.ca/taxcredit/sred/aboutus-e.html|title=About Our Program|accessdate=2006-09-02]
* experimental development
* applied research
* basic research
* support work
In order to claim such expenditures, an assessment on scientific or technological eligibility of the claimed activities need to be performed, according to three criteria: [cite web|url=http://www.cra-arc.gc.ca/E/pub/tp/ic86-4r3/ic86-4r3-e.html#P58_3054|title=IC86-4R3, Scientific Research and Experimental Development Information Circular|date=1994-05-24|accessdate=2007-08-14] :
* Scientific or technological advancement
* Scientific or technological uncertainty
* Scientific and technical content
The Ministry of Finance is responsible for the legislation that governs the SR&ED program, while the
Canada Revenue Agencyis responsible for its administration.
Investment Tax Credit
Federally, the maximum Investment Tax Credit (ITC) depends on the company's legal status and amount of qualified expenditures for SR&ED carried out in Canada.
* Canadian-controlled private corporation (CCPC): the ITC is 35% of the first $2 million in qualified expenditures, and 20% on any excess amount.
* Other Canadian
corporations, proprietorships, partnerships, and trusts: the ITC is 20% of all qualified expenditures.
In addition, each province or territory may also provide provincial or territorial tax credits (subject to a cap) to qualifying corporations carrying out SR&ED in their respective province or territory:
Provinces and territories may offer alternative or supplemental investment programs. Examples:
* Ontario small businesses may also claim the 10% Ontario Innovation Tax Credit.
* Alberta offers funding through its science and research investments grant program. [cite web|url=http://www.innovation.gov.ab.ca/inv/sec/ursi/pro/asrip_001_1.cfm|title=Alberta Science and Research Investments Program (ASRIP)|accessdate=2006-09-03]
* Prince Edward Island offers grants (non-repayable contributions) under various funds. [cite web|url=http://www.techpei.com/photos/original/techpei_rd_back.pdf|title=TechPEI - Research and Development Initiative|accessdate=2006-09-03]
* Northwest Territories and Nunavut provide a 15% tax credit under the
Risk Capital Investment Tax Credits Act. [cite web|url=http://www.cbsc.org/servlet/ContentServer?cid=1089652659441&pagename=CBSC_FE%2Fdisplay&lang=en&c=GuideInfoGuide|title=The Risk Capital Investment Tax Credits Act|accessdate=2006-09-03]
Industrial Research Assistance Program
Western Economic Diversification Canada
* [http://www.cra-arc.gc.ca/taxcredit/sred/menu-e.html Scientific Research and Experimental Development Tax Incentive Program]
* [http://www.cra-arc.gc.ca/taxcredit/sred/prov-e.html Provincial and Territorial Government R&D Programs]
* [http://laws.justice.gc.ca/en/I-3.3/index.html Income Tax Act]
Wikimedia Foundation. 2010.
Look at other dictionaries:
Business and Industry Review — ▪ 1999 Introduction Overview Annual Average Rates of Growth of Manufacturing Output, 1980 97, Table Pattern of Output, 1994 97, Table Index Numbers of Production, Employment, and Productivity in Manufacturing Industries, Table (For Annual… … Universalium
Computers and Information Systems — ▪ 2009 Introduction Smartphone: The New Computer. The market for the smartphone in reality a handheld computer for Web browsing, e mail, music, and video that was integrated with a cellular telephone continued to grow in 2008. According to… … Universalium
Agriculture and Food Supplies — ▪ 2007 Introduction Bird flu reached Europe and Africa, and concerns over BSE continued to disrupt trade in beef. An international vault for seeds was under construction on an Arctic island. Stocks of important food fish species were reported… … Universalium
Media and Publishing — ▪ 2007 Introduction The Frankfurt Book Fair enjoyed a record number of exhibitors, and the distribution of free newspapers surged. TV broadcasters experimented with ways of engaging their audience via the Internet; mobile TV grew; magazine… … Universalium
Social development theory — In sociology, social development theory attempts to explain qualitative changes in the structure and framework of society, that help the society to better realize its aims and objectives. Development can be broadly defined in a manner applicable… … Wikipedia
Climate change and agriculture — are interrelated processes, both of which take place on a global scale. Global warming is projected to have significant impacts on conditions affecting agriculture, including temperature, carbon dioxide, glacial run off, precipitation and the… … Wikipedia
Canada Revenue Agency — The Canada Revenue Agency (CRA) (Revenue Canada under the Federal Identity Program) a federal agency that administers tax laws for the Government of Canada and for most provinces and territories, international trade legislation, and various… … Wikipedia
Information Technology Association of Canada — (or Association canadienne de la technolgie de l information) is a lobby group representing members (companies) of Canada s information and communications technologies (ICT) industry.ITAC is the voice of the Canadian information and… … Wikipedia
Venture capital — (also known as VC or Venture) is a type of private equity capital typically provided to immature, high potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the… … Wikipedia
international relations — a branch of political science dealing with the relations between nations. [1970 75] * * * Study of the relations of states with each other and with international organizations and certain subnational entities (e.g., bureaucracies and political… … Universalium