March 20, 2020

CATA SR&ED Tax Credits Update – 2020 Tax Survey

Russ Roberts, PhD, Sr VP, Tax, Finance & Advocacy, CATAAlliance

CATA is a trusted industry alliance with a mandate to help Canadian innovation thrive. We focus on commercial capabilities and access for homegrown technology businesses. The alliance brings together industry and thought leaders with academe and policy makers to advocate for Canadian competitiveness and amplify a bold, confident podium culture.

Our ongoing Surveys on the Scientific Research and Experimental Development (SR&ED) Tax Incentive Program are part of our continuing advocacy messaging.

Specifically, in recent years, CATA has called for the Federal Government to make major improvements to the SR&ED program both through improved legislation, and the more consistent application of clearer, more transparent policy by the CRA. We have considered that a different administrative approach than the CRA may be needed.

We have shared your commentary about the program with both the Department of Finance and the CRA.

Over the last year, the Government and the CRA have made a considerable number of changes to the program, including:

  • eliminating the use of taxable income as a factor in determining a CCPC’s expenditure limit for the enhanced refundable SR&ED tax credit. As a result, small CCPCs with taxable capital of up to $10 million will benefit from unreduced access to the enhanced refundable investment tax credit regardless of their taxable income.
  • clearer policy on SR&ED claims by physicians and medical professional corporations (MPCs);
  • new training material, including guidance for software claims and new service standards; and
  • for the third time in the history of the SR&ED program, the CRA has turned to an outsider to help them with the program’s administration.

For details, go to
https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/whats-new-program.html and
https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/information-seminars-webinars.html .

Note: the Survey (e.g., for tablets & i-phone) can also be completed directly at: https://forms.gle/kASN1VqHKSSNrs616