Are you one of the many Green Corps missing out on significant tax savings?
Many businesses develop innovative ways to overcome everyday problems, but did you know that some of your solutions could qualify as research and development (R&D)? The Scientific Research and Experimental Development (SR&ED) tax credit is available for business conducting qualified SR&ED work in Canada. Qualified projects can provide a tax credit against the SR&ED related expenditures incurred in the project (23.5% non-refundable for Large Corporations, 41.5% refundable for qualified Canadian Controlled Private Corporations).
Green Corporations are often challenged to develop solutions outside the box and use experimental development to create a new technology or to combine existing technologies all the time. What they may not realize is this novel approach to solve a specific technological problem may be eligible for the SR&ED investment tax credit.
With over $4 billion a year in funding, the SR&ED program is the largest single source of federal government funding for industrial research and development. To take full advantage of these funding opportunities and the multitude of available provincial incentives, it’s important that you work with professionals who have the knowledge and experience to help you get the most from the program. To access these tax credits, you’ll want to organize your approach to ensure you:
- State the problem (not Trial & Error)
- Document the work undertaken to resolve the problem
- Demonstrate that the resolution goes beyond employing “known Technology” in a “known manner” to achieve a “known outcome” (This shows your approach is contrasted against “standard practice” employed by your non-innovative competitors)
A successful claim could net significant credits to offset the cost of developing new or improved technology –and the potential savings through SR&ED tax credits can have a very have a measurable impact on your bottom line. If you think you might be eligible, it’s well worth investigating.
This article was submitted by BOMA member MNP LLP. To find out if your project may qualify and for more information on the SR&ED program, you may contact Dave Huston, P.Eng, SR&ED Technical Leader at 403.354.0141 or dave.huston@mnp.ca