Scientific Research & Experimental Development
What is SR&ED and what's in it for you?
Scientific Research & Experimental Development (SR&ED) is defined as a systematic investigation or search in a recognized field of science or technology by means of experiment or analysis.
The SR&ED Program is a federal and provincial tax incentive program administered by Canada Revenue Agency (CRA). By refunding a substantial portion of development costs, the program encourages businesses of all sizes to conduct research & development; that is, to create new or improve upon existing products, processes, principles, methodologies or materials.
Any company operating in Canada, including private & public companies, foreign subsidiaries, partnerships and sole-proprietorships are eligible to make an SR&ED submission. Canadian Controlled Private Corporations receive the highest benefit through the program and can recover up to 64% of developmental costs. Eligible expenditures include salaries, sub-contractor fees, wasted materials and prototypes.
Eligibility Criteria - Section 248(1)
Scientific or Technological Advancement - The work you've done was performed by competent professionals and the resultant knowledge generated advanced your understanding of scientific relations or technology.
Scientific or Technological Uncertainty - Whether a given result can be achieved or how to achieve it is unknown or cannot be determined on the basis of generally available knowledge or experience.
Scientific or Technological Content - The work was conducted by qualified personnel in a field of science or technology by means of experiment or analysis.
You may qualify if you have…
- Been involved in design, engineering, data collection or other development and testing
- Developed, designed or tried to integrate existing software
- Changed a process to improve upon efficiency or save costs
- Built a prototype or improved upon an existing product
- Incurred costs while doing any of the aforementioned
These supporting activities are also recognized when performed in conjunction with the aforementioned activities: engineering, design, operations research, mathematical analysis, computer programming, data collection, testing & psychological research.
Commercial Projects vs Internal Projects
Just because you don't intend on directly profiting from your project or your project wasn't commercially viable, doesn't mean that it isn't eligible SR&ED activity. Commercial success or viability isn't a requirement of the program, which means your commercial project may have failed to meet your goal, or the work you've done is simply to improve your own business internally. These situations have both produced eligible SR&ED work and ought to be explored.
If any of these describe aspects of your business, reach out to us.
We'll provide a complimentary, no obligation informational session and assessment of your work.