2012 Federal Budget Changes to SR&ED Program
In March, the 2012 Canadian Federal budget was released, which included various changes to its Scientific Research and Experimental Development (SR&ED) tax incentive program. The SR&ED Canadian government funding program helps compensate corporate tax paying companies of any size for conducting research and development activities in Canada. The new SR&ED policies and documents will be made available at a single portal by December 2012.
Upcoming Changes to Scientific Research and Experimental Development Tax Credit
| Changes | 2012 | 2013 | 2014 |
| Proxy rate used to calculate overhead costs as percentage of SR&ED eligible salaries adjusted in 2013 and 2014 | 65% | 60% | 55% |
| Capital expenditures for SR&ED activities excluded from base of eligible expenditures as of January 1, 2014 (includes expenditures of capital nature included in contract fees) | 100% | 100% | 0 |
| General rate for federal SR&ED Investment Tax Credit adjusted as of January 1, 2014 | 20% | 20% | 15% |
| SR&ED contract payments limited to 80% as of January, 1 2013 | 100% | 80% | 80% |
| The refundable federal SR&ED Investment Tax Credit rate remains unchanged for small to medium-sized, private Canadian-controlled corporations on their first $3 million of eligible SR&ED expenditures annually | 35% | 35% | 35% |
Additional Canadian Government Funding Support
If you have any further questions or concerns, visit the Canadian Revenue Agency (CRA) SR&ED program. It is important to note that there are also various other tax credits and Research & Development Funding programs available to your company. If you need additional support on Canadian Government funding mechanisms available to you, be sure to contact one of our Canadian Government Funding Experts. You can also receive updates on various funding programs available by following us on Twitter or Facebook.