think.SRED
Receive up to 65% of innovative related expenditures refunded through the SR&ED program
Reclaim salaries, sub-contractor’s costs, wasted & transformed materials
Any taxable company operating in Canada can qualify regardless of profitability and the nature of the commercial project
Applications to the SR&ED program are made annually
think.SRED has redefined strategic SRED partnership through our synergistic approach to best guide software developers, biotech & renewable energy companies, and manufacturers
Eligibility assessments, peer reviews and educational sessions are complementary for all interested companies
Fees for SRED service are success-based and only paid when you’ve realized the benefit
The Scientific Research & Experimental Development Program (SR&ED)
Canada supports innovation in a major way. You’ll be pleased to know that any company legally operating in Canada is entitled to receive the benefits of this very generous incentive program that pays out approximately $3 billion per year to eligible companies. But for those of you who have the CCPC status (Canadian Controlled Private Corporation) and who are considered a small business for tax purposes, you’ll be more pleased to hear that you’re entitled to the highest possible benefit the program offers.
Well, 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. It’s 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 and fosters innovation in Canada.
“Any taxable company performing work within our borders, including private & public companies, foreign subsidiaries, partnerships and sole-proprietorships are eligible to make an SR&ED submission. Eligible CCPCs can recover 65% of their dedicated payroll expenditures, 34% of related invoices from sub-contractors and 42% of the cost of wasted and transformed materials. ”
The eligibility criteria are defined in tax law, and simply put, it says that:
If in the midst of a commercial project individuals acting on behalf of your company were faced with a technological problem they couldn’t resolve, and the knowledgebase they possessed, and reasonably had access to, left a gap between them and the answer to that problem, you’ve experienced technological uncertainty. This is the first criteria of the SR&ED program.
If you then systematically tried to reduce or eliminate that technological uncertainty altogether through a systematic approach involving iterative steps including trials and experiments, you’ve satisfied the second criteria.
Lastly, whether or not you achieved your technological objective is inconsequential. More importantly and essential to the program is that you generated knowledge you didn’t possess prior to the work being done. The resultant knowledge achieved through a systematic investigation becomes technological advancement in the eyes of the SR&ED, and it the final criteria that needs to be met.
If you feel that this reflects your recent journey, we should talk. But to approach this with a broader brush, 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
The following supporting activities are also recognized when supporting technological advancement: 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.
Our SR&ED leadership team has led hundreds of companies of all sizes to access the benefits of this generous incentive program, so click here for a full description of our SR&ED related offerings, or just reach out to us and let’s talk.