Federal SR&ED
Support and stimulate the research and technological innovation efforts of businesses.
The ITC for Scientific Research and Experimental Development (SR&ED) is the main tax incentive in Canada and is aimed at supporting and stimulating companies’ research and technological innovation initiatives. May be earned in the year on qualified SR&ED expenditures of a corporation, ranging from 35% for Canadian-controlled private corporations (CCPCs) to 15% for other companies.
Who can benefit from the SR&ED Investment Tax Credit?
Any industrial, commercial, or agricultural company subject to Canadian taxes and permanently established in Canada can benefit from the program. Around 75% of claimants are small and mid-sized businesses.
Calculation
- For Canadian-controlled private corporations (CCPCs): 35%, refundable, up to $3,000,000 of eligible yearly expenses, reduced to 15%, non-refundable, for any additional amount,
- The $3,000,000 limit depends on the taxable capital of the company and all associated companies for the previous fiscal year,
- For other companies: the tax credit is not refundable and is equal to 15% of SR&ED expenses.
