SR&ED Program Overview
The SR&ED program is administered by the Canada Revenue Agency (CRA) through legislation contained within the Income Tax Act.
The SR&ED program was created in order to encourage the growth of high technology jobs, knowledge and skills within Canada. As such the Federal Government and many Provincial Governments provide tax credits to businesses conducting eligible SR&ED activities and incurring eligible expenses.
Most private businesses could potentially be incurring eligible expenditures, provided the R&D project involves work related to one of the following three activities:
Work undertaken to advance scientific knowledge without a specific practical application in mind.
Work undertaken to advance scientific knowledge with a specific practical application in mind.
Work undertaken for the purpose of achieving a technological advancement (including incremental improvements) with the goal of creating new or improving existing materials, products, processes or devices,
There are a number of eligible supporting activities that, by themselves, are ineligible but will be considered part of the eligible expenditure base if they are commensurate with the needs, and directly in support of one of the three activities listed above .
In determining whether the nature of the work performed is eligible, all of the following criteria must be present in any project:
- The work results in information that produces Scientific or Technological Advancement.
- In achieving the advancement one or more Scientific or Technological Uncertainties must have been identified and worked on
- There must be Scientific or Technological content or process in the work undertaken during the project.