The Scientific Research and Experimental Development (SR&ED) program is a federal tax incentive program to encourage Canadian businesses of all sizes and in all sectors to conduct research and development (R&D) in Canada that will lead to new, improved, or technologically advanced products or processes.

Claimants can apply for SR&ED investment tax credits for expenditures such as wages, materials, machinery, equipment, some overhead, and SR&ED contracts.

Who qualifies?

Any Canadian company that is involved in developing new or improving existing products, processes, or services, and/or resolving challenges encountered during the development process. In essence, you are eligible if you have developed or created a new process, product, or improved an existing process or product.

Examples of industries that qualify:

Manufacturing, Information Technology, Dental, Pharmaceutical, Chemical Processing, Computer Sciences, Design & Construction, Electronics & Optics, Engineering, Food Processing, Life & Health Sciences, Machinery & Equipment, Pattern, Tool & Design, Plastics & Textiles, Printing & Packaging, Transportation, and more!

Benefits of SR&ED

  • Receive money back for eligible R&D expenditures incurred
  • Amount returned depends on previous year’s taxable revenue
  • 20% tax credit on eligible SR&ED expenses OR 41.5% cash on eligible SR&ED expenses

SR&ED Qualifications

Many companies are not aware that they engage in any SRED activities. In most cases, Prime Consultants has been able to identify qualifying activities, and subsequently file successful SRED claims on behalf of our clients.

To qualify for the SRED program, the work done must involve the advancement of scientific understanding, the resolution of scientific or technological uncertainty, and the presence of qualified personnel, performing systematic research, using accepted protocols.

Work that qualifies for SRED Tax Credit includes:

  • Basic Research: Research done to advance scientific and technological knowledge without a specific goal in mind.
  • Applied Research: Research done to advance specific research & development goals. The research must follow accepted scientific protocols and must be performed by qualified personnel. Its goal must include the resolution of non-standard technical problems.
  • Experimental Development: Work that is done to develop new processes, materials, or products, or improve existing ones, including work done in the pursuit of technological advancement. This work must be done in a systematic manner and follow accepted scientific protocols.
  • Support Work: Work done in the areas of engineering, design, computer programming, operations methodology, statistical analysis, testing, or psychological research. The work in question must directly support the primary research and development activities.

The following activities do not qualify:

  • market research and sales promotion, routine data collection
  • style changes, development and research pertaining solely to design or routine engineering practices
  • research in the area of social science and the humanities
  • prospecting, exploring or drilling for minerals, petroleum or natural gas
  • routine testing of materials & processes, routine quality control measures

Contact Prime Consultants for a free, no obligation consultation, and we’ll help you see the untapped revenue potential in your company.