Scientific Research and Experimental Development .
If your business is developing, improving, testing, or experimenting with products,
software, processes, equipment, or technology, you may be eligible for valuable tax
incentives through Canada’s Scientific Research and Experimental Development program,
commonly known as SR&ED.
Recent changes to the SR&ED program have expanded potential opportunities for
Canadian businesses. For companies already investing in research and development, or
planning new innovation projects, now is a good time to review whether your activities and
expenditures could qualify.
At Lohn Caulder LLP, we help businesses identify eligible SR&ED activities, assess
qualifying expenditures, and prepare well-supported claims.
What is SR&ED?
SR&ED is Canada’s main federal tax incentive program for businesses carrying out eligible research and development work in Canada. The program is designed to support innovation by providing tax incentives for businesses that undertake scientific research or
experimental development.
For qualifying Canadian-controlled private corporations, SR&ED credits may be refundable, which can provide cash back to the business even when there is no tax payable. This can make SR&ED especially valuable for growing businesses that are reinvesting in technology, equipment, people, or product development. SR&ED is not limited to breakthrough inventions. Businesses may qualify when they face technological uncertainty and use a systematic process of experimentation to try to resolve it.
What types of work may qualify?
Eligible SR&ED work may include basic research, applied research, and experimental development. In practical terms, this could include work where your business is trying to:
- Develop a new product, process, material, device, or software system
- Improve an existing product, process, or technology
- Solve a technical problem where the outcome is uncertain
- Test different approaches to overcome technological limitations
- Build or modify equipment, systems, or processes for experimental purposes
The key question is not simply whether the project was successful. A project may still be relevant for SR&ED if the business encountered technological uncertainty, tested possible solutions, and maintained evidence of the work performed.
Our SR&ED services:
A strong SR&ED claim requires more than identifying expenses. Businesses need to demonstrate the technological challenges encountered, the work performed, the experiments or analysis completed, and the results achieved.
Our team can help you:
Identify potential SR&ED projects and qualifying activities
Review eligible expenditures
Assess whether capital expenditures may be relevant
Improve documentation and evidence practices
Prepare a well-supported SR&ED claim
Coordinate the SR&ED claim with your corporate tax filing
Discuss whether CRA’s pre-claim approval process may be useful for future projects
