Scientific Research and Experimental Development (SR&ED) Tax Incentive Program

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This federal tax incentive program is the largest single source of federal government support for industrial R&D. It aims to encourage Canadian businesses in all sectors to conduct research and development (R&D) in Canada that will lead to new, improved, or technologically advanced products or processes.

What Kind of Projects Qualify?

To qualify for the SR&ED program, work must:
  • advance the understanding of scientific relations or technologies;
  • address scientific or technological uncertainty; and
  • incorporate a systematic investigation by qualified personnel.
The following projects are eligible for benefits under the program:
  • experimental development to achieve technological advancement to create new materials, devices, products, or processes, or improve existing ones;
  • applied research to advance scientific knowledge with a specific practical application in view;
  • basic research to advance scientific knowledge without a specific practical application in view; and
  • support work in engineering, design, operations research, mathematical analysis, computer programming, data collection, testing, or psychological research, but only if the work is commensurate with, and directly supports, the eligible experimental development, or applied or basic research.
The importance of maintaining evidence to support your SR&ED claim

It is important to maintain supporting evidence when you want to claim SR&ED tax incentives. According to Canada Revenue Agency, claimants must be able to present evidence that the SR&ED was performed as claimed. If your SR&ED claim is selected for review, you will be asked during the review to support your claim by providing evidence. Most often, supporting evidence is in the form of contemporaneous documents that is dated, signed and specific to the work performed, for example, time sheets, project progress reports, development plans, etc.

Keep your paper and electronic records for at least six years after the year to which they relate.

Visit the CRA website for more information about the requirements of your tax incentive assessment.

Our advisors master the requirements regarding the supporting evidence of SR&ED work and make the commitment to help and assist you with the organisation and presentation of the documents needed to support your claim. Contact one of our advisors to better understand and assist you in the establishment of a framework of good practices in documenting your R&D work.