Scientific Research and Experimental Development (SR&ED)

SR&ED is available to many business types in Canada, including:

• Canadian-Controlled Private Corporations (CCPCs): Eligible for a refundable credit of 35% on up to $3M in qualified expenses. Additional expenses receive a 15% non-refundable credit.
• Other Corporations, Individuals, and Trusts: Can access a 15% non-refundable credit.
• Partnerships: The tax credit is split among eligible partners (corporations, individuals, or trusts).

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Projects must involve experimental development or scientific research that deals with uncertainty and seeks solutions not publicly available.

Labour:

• Based on time spent on eligible R&D in Canada
• Minimal claim allowance for work done outside Canada

Contractors:

• Must be Canadian contractors performing R&D in Canada
• Portion of contracts must be directly tied to eligible work

Materials:

• Includes items consumed, scrapped, or transformed (e.g. prototypes)
• Can be sourced from Canadian or international suppliers

Overhead:

• Proxy method: 55% of adjusted labour costs
• Traditional method: Based on actual costs tied directly to SR&ED activities

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