Scientific Research and Experimental Development Tax Incentive Program (SRED or SR&ED)

SR&ED was created in 1986 by Canada Revenue Agency (CRA) and it is a federal Tax Credit Ontario incentive program to encourage Canadian companies to take technological risk and invest in the creation of the new knowledge. It is the largest single source of federal Government Grant Ontario support for industrial R&D.

Benefits of SR&ED

It is a refundable tax credit which means that the claimants can receive a refund for their expenses on Research and development projects. It's aim was to stimulate the economy and advance technology. For SR&ED, you don't need to succeed to qualify and also you don't need to be the first to develop the technology in order to qualify, as long as the information was not publicly available to you during the development. CRA follow a transparent procedure to select the companies for SR&ED program. The SR&ED contributes to over $4 billion dollars to Canada. You need to qualify some basic criteria to get benefit from SR&ED.

SR&ED Filing

To qualify you need to meet three specific criteria which are Advancement, Uncertainty and Content advancement is the creation of new knowledge in the field of Scientific Research Toronto, Knowledge which is not available within the public domain. For uncertainty, In this set the technological level, the claimant needs to demonstrate that there was uncertainty or doubt that the technological objective could be achieved and the solution to the technological problem found or an advancement made and lastly, Content, It's about showing that you attempted to solve the technological obstacles in a systematic way and that your work was performed by qualified personnel. You also need to show that you have authentic documents of the work and experiments. It's important to have document evidence for SR&ED Filing. Just because you do research and development doesn't mean you are eligible for SR&ED. You need to be very diligent and uncover which portion of your R&D efforts meets the criteria. Many companies don't realize that they are qualified because they are unaware of the criteria and they need expert assistance to file for SR&ED.

To apply for SR&ED tax incentives one needs to file an income tax return along with FORM T661, with one of the following forms: Schedule T2SCH31 Investment Tax Credit – Corporations; or Form T2038 (IND) Investment Tax Credits (Individuals).

SR&ED Tax Consulting Firms

There are numerous benefits of Toronto SR&ED program and you need to know about every pre-requisite information for Filing the SR&ED Program. If you are aware of all the formalities and you have the information about the filing process then you can do it yourself, if not, There are many Tax consulting firms who provide these services. For ensuring that the company gets selected for the program, they consult with the tax consultants who have expertise in SRED Filing Toronto. Some of them claim to refund the money and some offer their services free if your proposal gets rejected. There are some Good tax consulting firms in Toronto and Ontario who specialize in SR&ED services.

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