What is the SR&ED Program?
The Scientific Research and Experimental Development (SR&ED) program is a federal tax incentive program to encourage Canadian businesses to conduct research and development (R&D) in Canada. You could receive a refund up to 57% of your qualifying salary expenditures. Contact us to discuss if you are eligible for this program.
The SR&ED program is a federal tax incentive program, administered by the Canada Revenue Agency (CRA), that encourages Canadian businesses of all sizes, and in all sectors to conduct research and development (R&D) in Canada. It is the largest single source of federal government support for industrial R&D.
The SR&ED program gives claimants cash refunds and/or tax credits for their expenditures on eligible R&D work done in Canada.
SR&ED stands for Scientific Research and Experimental Development. It is a tax incentive program created by the Canada Revenue Agency 20 years ago. The aim of the program was to encourage technical development among companies by offering tax credit incentives and refunds to businesses that perform any kind of Research and Development in Canada. In the most general sense, the program works by reimbursing eligible companies for money that has already been spent. In other words, the government compensates for developing and improving the products that the companies would have been working on anyway.
Every year, the Canadian government gives an average of $4 billion to businesses across the country. Through cash refunds and tax credits, Canadian government supports the businesses that are improving products they already manufacture, create new products, as well as supports the business that are changing processes and develop their own software.
Through the federal portion of the SR&ED program, small to medium sized businesses operating in Canada can receive up to 72.1% back on eligible labour expenses – or the time spent creating new or developing existing products and processes. On top of that, most provinces in Canada also offer a provincial tax credit, which ranges from 10% to 35%.
Related Questions
- Where can I find information about the Scientific Research and Experimental Development (SR&ED) Tax Incentive Program for Canadian Businesses?
- What is the Alberta scientific research and experimental development (SR&ED) tax credit program?
- Is the SR&ED program a kind of grant, repayable loan or equity investment?
