Scientific Research and Experimental Development Tax Incentive

Companies investing in R&D activities internally or in collaboration with designated research providers are eligible to apply for Scientific Research and Experimental Development (SR&ED) federal tax credits and provincial/territorial R&D tax credits. In addition to deducting expenditures for the purposes of computing taxable income, companies may also be eligible for a cash refund or a reduction of taxes owing; these benefits can range from 15 per cent to 35 per cent of qualifying operating expenditures and up to 40 per cent for capital expenditures.

In order to qualify for these tax incentives, R&D expenditures must be related to:

  • Basic research – work carried out to advance scientific knowledge;
  • Applied research – work carried out to advance scientific knowledge with practical applications; or
  • Experimental development – work carried out to achieve technological advancement

Qualifying companies may be eligible to take advantage of the following incentives:

  • Canadian controlled private corporations can earn a refundable input tax credit (ITC) at a rate of 35 per cent (40 per cent for capital) on qualified SR&ED expenditures up to $3 million and a non-refundable credit of 15 per cent over $3 million
  • Other corporations can earn a non-refundable ITC at a rate of 15 per cent on qualified SR&ED expenditures
  • Individuals, proprietorships and trusts can earn a refundable ITC at a rate of 15 per cent on qualified SR&ED expenditures (for partnerships, ITC is calculated and then allocated to eligible members)

Vineland has been designated as an eligible Research Institute by the Canada Revenue Agency, and as such, expenditures made by Canadian companies at Vineland for collaborative projects or service work may be eligible for SR&ED tax credits. Please consult with a tax professional to determine if your expenditures are eligible for the federal SR&ED tax incentives and/or any provincial and territorial R&D tax credits.