|
Many startups don't realize that
they'll recover ~half of the costs in either SR&ED or R&D tax credit they've already incurred.
Others are mystified by the academic prism that Canada Customs
and Revenue Agency (CRA) uses to determine eligibility.
Most are intimidated by the paperwork involved. This is
surely why one quarter of Canada's technology companies
do not take advantage of the financial benefits of SR&ED!
Use Scientific
Research and Experimental Development (SR&ED) incentives
to expand your research and development budget!
SR&ED will improve your balance sheet significantly! SR&ED delivers ~ten times the amount available
through the National Research Council! The Canadian federal government
pays 3/4 of your SR&ED cheques; provinces pay the
remaining $1B of the ~ $4 Billion that Canadian companies receive
annually.
Canadian Controlled Private
Corporations recover
a significant portion of their research and development
costs:
- 68% of salaries;
- 42% of contract payments,
scrap, and equipment lease;
- 23% of capital equipment
used exclusively for R&D.
R&D Tax Credit Claims must be submitted within 18 months
after the end of each fiscal period. If your company's
fiscal year ends on June 30, then December 31, 2005 is your
deadling for filing your 2004 SR&ED claim. You may
be fortunate enough to file two SR&ED claims immediately!
This is more efficient for everyone involved..., you'll receive
a government cheque for both fiscal periods at the same time!!!
Two simultaneous SR&ED Claims is the limit.
CCPCs receive their cheques within ~3-4 months,
assuming T2 Corporate Income Tax returns are filed simultaneously.
But if you file your T2 and SR&ED / R&D Tax Credit claim separately, you'll
probably receive your cheque in ~6-8 months.
Public, and foreign, companies qualify for only ~one-half
the size of SR&ED / R&D Tax Credit cheques that CCPCs receive, in the form of tax credits
valuable only if your company owes taxes (i.e., when it becomes profitable)
, Such "non-refundable"
ITCs apply only to income taxes that you owe, so the non-Canadian
entity must be profitable. But after a CCPC goes public, it
can file for a "stub" fiscal period (less-than-12-months)
which finishes one day before going public!
SR&ED is the largest source of financial assistance
available to Canadian companies! Use our Templates
so SR&ED becomes easy and reliable, an essential
component of cash flow planning.
These percentages are not well known.
CRA does not publish them because the underlying
calculations are so complex, and many variables are involved.
Reduce the sum by 42% of other government financial assistance
such as NRC/IRAP, Western Diversification, Canarie, Technology
Partnerships Canada or any other government financial assistance.
|
Home