Government Policy for the SR&ED Tax Credit

Through the Scientific Research and Experimental Development tax incentive program, the government of Canada has constantly supported innovation, entrepreneurship and development. A look at 2014 alone shows that the program provided $3.1 billion in SR&ED investment tax to businesses performing R&D in Canada. The government has proven to be instrumental in the development and welfare of firms and startups.

After the introduction of the program and similar policies like the introduction of initiatives like the Innovation and Skills Plan by the government, much has changed in the business environment. Companies have been able to reduce costs by applying for the R&D incentive, as they end up being boosted by the government. It has allowed companies to be more forward-thinking by undertaking activities that are eligible for the SR&ED program benefits.

The government, in collaboration with the Canada Revenue Agency has allowed for the rolling out of the program to all firms who apply, irrespective of their size. The policies and programs by the Canadian government have truly proved to be one of the most unique, generous and accessible R&D tax programs in the world.

The SR&ED program is also available for foreign firms who have the interest of venturing into the Canadian market. From an international parent company, the established company can receive incentives from the program for eligible expenditures. Companies are offered a 15% tax incentive. Through the Canadian-controlled private corporations (CCPCs)  foreign companies are able to contribute to the Canadian economy.

The government policies overlooked by the Treasury have really improved industrialization and innovation in the Canadian market, leading to rampant growth. The government in turn has collaborated with provincial governments. However, each state has different rules concerning the SR&ED. To find out more about the SR&ED tax credit, contact Swanson Reed tax advisors today.