Professional Documents
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Associated SR&ED Presentation
Associated SR&ED Presentation
Ltd.
Associated R&D 1
SR&ED Financial
Associated R&D 2
SR&ED Tax Incentive - What?
• SR&ED stands for
– Scientific Research & Experimental Development
• Tax Incentives
– A tax incentive is a vehicle to reduce the taxes paid by
a corporation
– Incentives are offered for both provincial and federal
taxation
– Samples include manufacturing equipment acquisition
and R&D
Associated R&D 3
SR&ED Tax Incentive
• Tax credits are earned on eligible expenditures
• 35% Refundable on expenditure limit of 2,000,000 if
you are a ccpc
• 20% nonrefundable for corporations other than a ccpc
• Applied against taxes owing
• Carry back or carry forward Options for Tax Planning
Associated R&D 4
Eligible Expenditures
• Expenditures are classified as current and
capital
• Current includes labour, materials, contracts,
lease costs and 3rd party payments
• Capital includes shared use and ASA
equipment
Associated R&D 5
Eligible Expenditures
• Labour Conducting SR&ED
• Materials includes six primary
costs. It is necessary
• Contracts
to document these
• 3rd Party Payments costs on an ongoing
• Lease Costs and consistent basis.
• Overhead
Associated R&D 6
Filing a Claim
• Filing a Complete Claim Requires
– A T661 Form
– A T2Sch31& Related Forms
– Technical Project Descriptions for Each Project
– Summary of Personnel’s Qualifications
– Patience and Perseverance
Associated R&D 7
When to File a Claim
• Claims are typically filed with a corporations
T2 return - due six months after the fiscal year
end
• Claims may be filed up to eighteen months
from a fiscal year end
• The program operates under the following
premise: Incur the Expenditure then file the
claim
Associated R&D 8
SR&ED Technical
Associated R&D 9
Science & Technology
Associated R&D 10
SR&ED Definition
• By Definition in 248(1) of the ITA,
SR&ED requires a systematic investigation or
search in a field of science or technology by
experiment or analysis and that is
– Applied Research
– Basis Research
– Experimental Development
• Including Supporting Work
Associated R&D 11
Basic Research
• Basic Research is work done to advance our knowledge
of Scientific Principles and relationships without a
specific application in mind
Associated R&D 12
Applied Research
• Applied Research is work done to advance our knowledge of Scientific
Principles and relationships with a specific application in mind
Associated R&D 13
Experimental Development
• Work done to achieve technological
advancement to create, or improve, materials
devices products or processes
• Key to the definition and eligibility is
technological advancement
• Proof of advancement is achieved through
documentation
Associated R&D 14
Supporting Activities
• Activities include: work in support of and
– Engineering commensurate with the needs
– Design of Applied or Basic Research
– Operations Research and Experimental
– Mathematical Analysis Development
– Computer Programming
– Data Collection
– Testing
– Psychological Research
Associated R&D 15
Technical Documentation
• Photographs of the prototypes and experiments conducted
• Dated documentation
• revision controlled drawings, reports and specifications
• e-mail and correspondence
• Plans…, preliminary project descriptions
• project files
• Documentation includes prototypes, drawings, test reports,
analysis, invoices, purchase orders, specifications,
calculations, log books, scrapped materials, test procedures…
Associated R&D 16
Teamwork
Associated R&D 17
Building a Claim
SR&ED Project
Personnel’s
Project Description Labour
Qualifications
Prototypes Contracts
Contract Documents,
Overheads
Purchase Orders
Associated R&D 18
R&D v/s Accounting
Accounting R&D
a) Labour a) Personnel & Activities
b) Materials b) What is the project
c) Contracts c) Who outside the company provides
services
d) Equipment (ASA & d) What items were purchased or
Shared Use) leased to build and test the project
Associated R&D 19
Educate Yourselves!
• Talk to Associated’s Personnel and request
information
• Use Associated’s Year-Round Support
services
• Build your knowledge
Associated R&D 20
Successful Claims
Associated R&D 21
How to Succeed
• File a complete claim on time
• Ensure your project descriptions reflect the
level of expenditures claimed
• Ensure your documentation is reflective of the
activities undertaken
• Proof of eligibility is in the work
Associated R&D 22
Associated R&D Tax
Services Ltd.
Associated R&D 23
Associated R&D Services
• SR&ED Claim Preparation and Training
• SR&ED Process Management
• Consultation on Program Requirements
• Participation During Audits
Associated R&D 24