So as you saw on the previous page of this article, being involved in R&D activities has excellent tax benefits, and the SR&ED tax credit program is a particularly good tax incentive because it's open to all forms of businesses.
You Don't Have to be in High-Tech to be involved in R&D
R&D tax incentives aren't just for high-tech businesses; you may even already be doing something that will qualify for the SR&ED tax credits program. For instance:
- Are you in the process of developing a new product or making improvements to an existing product?
- Are you creating an improved manufacturing technique or process?
- Are you spending money to lessen the environmental impact of your manufacturing process?
- Has your business developed new software?
When thinking of R&D activities and wondering what qualifies for R&D tax benefits and what doesn't, remember that "generally, R&D occurs when a business's objective is technological advancement, development occurs in a systematic manner through the efforts of individuals who are skilled in the technologies involved and technological uncertainties are overcome." (The Tax Benefits of R&D; BDO Dunwoody Tax Bulletin).
Tips for Accessing Even More R&D Funding
The Industrial Research Assistance Program (IRAP), run by the National Research Council of Canada (NRC) offers two kinds of financial assistance for R&D activities, including “non-repayable contributions to Canadian SMEs interested in growing by using technology to commercialize services, products and processes in Canadian and international markets”. To find out more, contact an Industrial Technology Advisor (ITA) at the IRAP regional office nearest to you.
The BDC (Business Development Bank of Canada) can be of great help in accessing R&D programs and working through the process of applying for government grants and R&D tax credits.There are businesses who specialize in helping other companies maximize their R&D tax credits and work through the claim process (for a fee). Technology Incentives and Innovation Technology Consultants are two companies that specialize in SR&ED claims. (There are many others.)
For More Information on the SR&ED Tax Credit Program
See the CRA’s What is the SR&ED Program? for an outline of who qualifies for the program and the SR&ED claims procedure.
The Tax Benefits of R&D (BDO Dunwoody LLP) provides a very readable detailed explanation of the R&D tax benefits available and how to maximize your R&D claim.
