Federal Grant - Ontario Scientific Research and Experimental Development (SR&ED) tax incentives
The Scientific Research and Experimental Development (SR&ED) Tax Incentive Program is a federal tax incentive program administered by the Canada Revenue Agency (CRA), designed to encourage businesses of all sizes and in all sectors to conduct research and development (R&D) in Canada. It offers tax credits and refunds to eligible businesses that engage in qualifying research and development activities.
If your business is involved in Scientific Research and Experimental Development (SR&ED), you might be eligible for tax incentives that can reduce your income tax payable.
Corporations, individuals, trusts, and partnerships engaged in SR&ED work in Canada can:
Claim a deduction against income for their allowable SR&ED expenditures incurred within the year.
Earn an Investment Tax Credit (ITC) to offset against their income tax payable. Partnerships can distribute the earned ITC to their eligible partners.
Eligibility Criteria:
For work to qualify for SR&ED tax incentives, it must be conducted within Canada and satisfy two key criteria: it must aim to advance scientific knowledge or technology, and it must involve systematic investigation through experiment or analysis. This means exploring new knowledge or solving technological uncertainties that weren't previously addressable with existing knowledge.
Advancements in SR&ED:
An advancement refers to new scientific or technological knowledge gained, regardless of whether the initial goal was achieved. Discovering that a certain approach doesn't work also contributes to scientific or technological advancement.
Systematic Investigation:
This involves a methodical approach that includes defining a problem, hypothesizing solutions, testing those hypotheses, and drawing conclusions based on the results.
Eligible Work Types:
Basic Research: Aims to advance scientific knowledge without a specific practical application.
Applied Research: Focuses on gaining knowledge to achieve a specific practical aim.
Experimental Development: Seeks to create new, or improve existing, materials, devices, products, or processes.
Support Work:
Certain support activities are eligible if they directly contribute to and are necessary for the basic, applied, or experimental development work. This includes engineering, design, operations research, computer programming, and similar activities.
Ineligible Work:
Activities excluded from SR&ED incentives include market research, quality control, social sciences and humanities research, mineral or natural resource exploration, commercial production, style changes, and routine data collection. Additionally, activities that simply apply existing knowledge or involve routine learning and training do not qualify.
For legal definitions and further details on SR&ED, consult the Income Tax Act and the CRA's guidelines on SR&ED tax incentives.
In summary:
Type of Work: The program supports work that advances scientific knowledge or achieves technological improvements. Eligible activities include experimental development to create new materials, devices, products, or processes, or to improve existing ones; applied research aimed at advancing scientific knowledge with a specific practical application in view; and basic research carried out to advance general scientific knowledge without a specific practical application in mind.
Expenditures: Eligible expenditures for SR&ED tax incentives include salaries and wages, materials, machinery, equipment used for R&D, and some overhead costs directly related to R&D activities. Third-party payments to entities performing R&D on behalf of the claimant may also qualify.
Documentation and Support: Businesses must maintain detailed records and documentation to support their SR&ED claims. This includes technical reports, financial records, project notes, and any other documents that can prove the R&D work was carried out and the expenses incurred.
Process:
Businesses must identify eligible SR&ED projects and expenditures, document their R&D activities and associated costs, and file an SR&ED claim with their income tax return using prescribed forms.
The CRA reviews the claim to determine eligibility and the amount of tax incentives that can be awarded.
Benefits:
The SR&ED program can significantly reduce the cost of R&D through income tax deductions, investment tax credits, and, in some cases, cash refunds. The specific benefits depend on the size of the company, the type of expenditures, and whether the R&D is conducted in Canada.
Claiming a Deduction Against Income
To claim a deduction against income, calculate the allowable SR&ED expenditures for the year. This calculation helps determine your pool of deductible expenditures, which can be used to reduce your net income for the current or a future year.
Earning an Investment Tax Credit (ITC)
You can earn an ITC to decrease your income tax payable for the year. The basic rate for earning this credit is 15%, but some corporations may qualify for an enhanced rate of 35%. Additionally, some businesses may receive a refundable ITC.
Other Government Funding for R&D
Receiving other government R&D funding and assistance does not disqualify your work from being eligible for SR&ED tax incentives. However, it will reduce the amount of ITC you can earn. For instance, receiving NRC IRAP funding will lower the ITC amount you're eligible for.
Provincial and territorial R&D tax credits may also be available to your business, but they will decrease the expenditures you can claim for SR&ED. Any funding or assistance received must be reported in your SR&ED claim.
Ontario Innovation Tax Credit (OITC)
Administered by: Canada Revenue Agency (CRA) post-December 31, 2008.
Rates: 10% before June 1, 2016, and 8% thereafter, with proration for transitional periods.
Eligibility: Corporations with a permanent establishment in Ontario conducting SR&ED.
Limitations: An annual expenditure limit of $3 million, phased out for corporations with taxable paid-up capital over $25 million up to $50 million, and taxable income over $500,000 but not exceeding $800,000.
Expenditure Reduction: Reduced by other assistance but not by OITC, OBRITC, ORDTC, or federal SR&ED ITC.
Ontario Business-Research Institute Tax Credit (OBRITC)
Administered by: CRA post-December 31, 2008.
Rate: Fully refundable at 20% of qualified expenditures, with a $20 million annual cap for associated corporate groups.
Eligibility: Corporations and partnerships with a permanent establishment in Ontario, engaging in SR&ED under eligible contracts with Eligible Research Institutes (ERIs).
Special Provisions: No need for advanced ruling for contracts post-August 9, 2007.
Ontario Research and Development Tax Credit (ORDTC)
Administered by: CRA post-December 31, 2008.
Rates: 4.5% before June 1, 2016, and 3.5% thereafter.
Eligibility: Corporations with a permanent establishment in Ontario conducting eligible SR&ED activities.
Carryover: Back 3 years and forward 20 years to adjust Ontario corporate income tax payable.
Expenditure Reduction: Similar to the other credits, reduced by other assistance except for specific exemptions.
Ontario Transitional Tax Debits and Credits
Related to the harmonization of federal and Ontario income tax laws.
Eligibility: Specified corporations affected by the transition.
Purpose: Adjust tax pools to align Ontario's definitions with federal ones, potentially causing tax gains or losses.
Forms Required: T2SCH506 and T2SCH507, related to transitional tax debits and credits calculation.
Each credit has its specific forms and legislative references for claiming and calculation.
科学研究和实验开发 (SR&ED) 税收激励计划是一项由加拿大税务局 (CRA) 管理的联邦税收激励计划，旨在鼓励各种规模和各个行业的企业在加拿大进行研究和开发 (R&D)。 它为从事合格研发活动的合格企业提供税收抵免和退款。
资格标准：
工作类型：该计划支持推进科学知识或实现技术改进的工作。 合格的活动包括实验开发以创造新材料、设备、产品或工艺，或改进现有材料、设备、产品或工艺； 应用研究旨在推进科学知识并着眼于具体的实际应用； 为推进一般科学知识而进行的基础研究，而不考虑具体的实际应用。
支出：符合SR&ED税收优惠的支出包括用于研发的工资、材料、机械、设备以及一些与研发活动直接相关的管理费用。 第三方向代表索赔人进行研发的实体付款也可能符合资格。
文件和支持：企业必须保存详细的记录和文件以支持其 SR&ED 声明。 这包括技术报告、财务记录、项目说明以及任何其他能够证明研发工作已进行以及所发生费用的文件。
过程：
企业必须确定符合条件的 SR&ED 项目和支出，记录其研发活动和相关成本，并使用规定的表格将 SR&ED 索赔与所得税申报表一起提交。
CRA 审查申请以确定资格和可授予的税收优惠金额。
优势：
SR&ED 计划可以通过所得税减免、投资税收抵免以及（在某些情况下）现金退款来显着降低研发成本。 具体优惠取决于公司规模、支出类型以及研发是否在加拿大进行。
如果您的企业涉及科学研究和实验开发 (SR&ED)，您可能有资格获得税收优惠，从而减少您的应缴所得税。
在加拿大从事 SR&ED 工作的公司、个人、信托机构和合伙企业可以：
申请从收入中扣除当年发生的允许的 SR&ED 支出。
赚取投资税收抵免 (ITC) 以抵消应缴所得税。 合作伙伴可以将赚取的 ITC 分配给符合条件的合作伙伴。
申请收入扣除
要申请收入扣除，请计算当年允许的 SR&ED 支出。 此计算有助于确定您的可扣除支出池，可用于减少您当前或未来一年的净收入。
获得投资税收抵免 (ITC)
您可以获得 ITC 以减少当年的应缴所得税。 获得此信用的基本税率为 15%，但某些公司可能有资格获得 35% 的提高税率。 此外，一些企业可能会收到可退还的 ITC。
其他政府研发资助
获得其他政府研发资金和援助并不会使您的工作失去获得 SR&ED 税收优惠的资格。 但是，这会减少您可以获得的 ITC 金额。 例如，接受 NRC IRAP 资金将降低您有资格获得的 ITC 金额。
您的企业也可能可以获得省和地区的研发税收抵免，但它们会减少您可以申请 SR&ED 的支出。 收到的任何资金或援助必须在您的 SR&ED 索赔中报告。
安大略省创新税收抵免 (OITC)
2008 年 12 月 31 日后由加拿大税务局 (CRA) 管理。
费率：2016 年 6 月 1 日之前为 10%，此后为 8%，过渡期按比例分配。
资格： 在安大略省设有常设机构进行 SR&ED 的公司。
限制：年度支出上限为300万美元，对于应税实收资本超过2500万美元至5000万美元、应税收入超过50万美元但不超过80万美元的公司，逐步取消。
支出减少：通过其他援助减少，但不通过 OITC、OBRITC、ORDTC 或联邦 SR&ED ITC 减少。
安大略省商业研究所税收抵免 (OBRITC)
管理机构：CRA，2008 年 12 月 31 日后。
费率：按合格支出的 20% 全额退还，相关企业集团的年度上限为 2000 万美元。
资格：在安大略省设有常设机构、根据与合格研究机构 (ERI) 签订的合格合同从事 SR&ED 的公司和合作伙伴。
特别规定：2007年8月9日之后的合同无需预先裁定。
安大略省研究与开发税收抵免 (ORDTC)
管理机构：CRA，2008 年 12 月 31 日后。
费率：2016 年 6 月 1 日之前为 4.5%，此后为 3.5%。
资格： 在安大略省设有常设机构、开展符合条件的 SR&ED 活动的公司。
结转：回溯 3 年并向前 20 年调整安大略省应缴企业所得税。
支出减少：与其他抵免类似，除特定豁免外，通过其他援助减少。
安大略省过渡税借项和抵免
与联邦和安大略省所得税法的统一有关。
资格：受转型影响的特定公司。
目的：调整税池以使安大略省的定义与联邦定义保持一致，从而可能导致税收收益或损失。
所需表格：T2SCH506 和 T2SCH507，与过渡税借项和贷项计算相关。