If you have been, and will be, doing
leading-edge development and/or experiencing significant technical
problems, then you will likely qualify for the Research and Development Tax Credit!
Only the company that owns the intellectual property can apply.
The work must be performed in Canada by Canadians. The critical
qualifying technical issue is whether you generated new knowledge
to solve problems that were unresolvable using existing knowledge.
Research & Development tax credit eligible activities
are:
- experiments and analysis;
- design, analysis, data collection,
and research;
- technical support (but not for
customers);
- preparing technical documentation
for internal use;
- preparing equipment & materials
(but not maintenance);
- direct supervision of employees
Marketing and other non-technical
activities don't qualify:
- sales, promotion, marketing and
advertising
- business plan preparation
- customer support
- user documentation
- reporting to shareholders
- other non-technical functions
Most companies are mystified by the academic prism
that Canada Revenue Agency (CRA) uses to determine
eligibility, and intimidated by the paperwork. Not
all salaries, contract payments, leases, or capital expenditures
qualify! This is a grey area, particularly in software and
IT. Software Research and Development Tax Credit claims present unique challenges
to CRA because qualified experts may disagree over whether
work constitutes routine application software development.
Together we'll identify the technically-challenging
issues that their people faced to develop software and information
technologies. We'll then apportion time that your
employees and contractors have spent, and will spend in
the future, to resolve those technical challenges (referred
to as “SR&ED Projects”), and multiply the
compensation that they were paid by the proportion of time
that they spent working on their "SR&ED Projects".
These are your technical challenges to which your development
people devised solutons to discover "advancements"
in CRA's terminology. We'll describe these in section (C)
of your SR&ED Techncial Submission. To demonstrate
that you advanced your technical domain you will need to
describe the "KnowledgeBase" existing prior to
your systematically investigation of the issues. To understand
better, view the SRED in a Nutshell presentation.
 |
Home