What are SR&ED Tax Credits?

SR&ED stands for Scientific Research and Experimental Development. SR&ED tax credits are a type of tax incentive offered by the Canadian government to encourage businesses to invest in research and development activities.

Under the Canadian Income Tax Act, eligible Canadian companies can claim a refundable tax credit for qualified expenditures incurred in the conduct of scientific research and experimental development activities. The SR&ED program is administered by the Canada Revenue Agency (CRA) and is designed to support innovation and stimulate economic growth in Canada.

SR&ED History

The initiative was introduced in 1944 and was the first of its kind in the world. In its current form, SR&ED has been in place since 1986 and is a matured scheme that is being leveraged by thousands of companies in various industries across the country. On average, and based on which province your company operates, you can potentially claim up to 40% or more of project costs!

What are the Objectives of the SR&ED Program?

The objectives of the SR&ED program are to encourage Canadian businesses to conduct R&D activities and to support the growth of Canada’s economy through innovation. The specific objectives of the program are:

To stimulate technological advancement: The SR&ED program aims to encourage Canadian businesses to develop new technologies, products, and processes that will lead to technological advancement and improve the competitiveness of Canadian companies in the global marketplace.

To increase competitiveness: By supporting research and development, the SR&ED program aims to help Canadian companies stay competitive by developing innovative products and processes, reducing costs, and improving efficiency.

To generate economic growth: Through increased innovation, the SR&ED program aims to help create new jobs, attract foreign investment, and contribute to overall economic growth in Canada.

To promote collaboration: The SR&ED program encourages collaboration between businesses, academic institutions, and other organizations to promote knowledge sharing and to leverage expertise to support innovation. 

How can SR&ED Credits Benefit my Company?

SR&ED tax credits can provide several benefits to companies that invest in eligible research and development activities. If your company is investing in eligible research and development activities, SR&ED credits can help offset the costs of innovation, boost cash flow (companies can receive their benefit in the form of a cash refund), increase competitiveness, and gain a strategic advantage by accessing more funding than competitors in your space.

Companies who successfully claim SR&ED credits against their eligible projects stand to reap substantial benefits from the program.

Is my Company Eligible?

Your company may be eligible to claim SR&ED tax credits if; your business is conducting eligible R&D activities, can demonstrate technological uncertainty prior to undertaking the project, and has incurred eligible expenditures.

What’s Next?

Need help making your SR&ED claim? That’s where we come in. At Catax Canada, we bring over 15 years of experience writing claims for our clients, identifying over $729m in tax benefits for our clients to date.

The process to start your claim is easy. Contact us today, or call us at 604 629 8863.

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