Sunday, November 07, 2010

The SR&ED Tax Incentive Program

Research and development is expensive, and as an innovative entrepreneur you need all the financial help you can get. 

One of the best things you can do for your startup financially is to apply for the Scientific Research and Experimental Development (SR&ED) Tax Incentive Program. 

What is it?
The SR&ED is a tax incentive program to encourage Canadian businesses to conduct research and development in Canada.  You can use SR&ED investment tax credits for expenses such as wages, materials, and equipment.

Who qualifies for it?
Generally, a Canadian-controlled private corporation (CCPC) can earn an investment tax credit of 35% up to the first $3 million of qualified expenditures for scientific research and experimental development carried out in Canada, and 20% on any excess amount.

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.

For more information about the SR&ED, including how to apply for the SR&ED, visit the CRA's web site at http://www.cra-arc.gc.ca/txcrdt/sred-rsde/bts-eng.html.

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