British Columbia – SR&ED Tax Credits
The Scientific Research and Experimental Research tax credit in British Columbia is administered by the Canada Revenue Agency. The tax credit program is aimed at encouraging research and development in the province that will lead to new, improved and technologically advanced processes or products. It is refundable for CCPC’s up to 10% of the expenditure limit and non-refundable otherwise at a rate of 10% of SR&ED qualified British Columbia expenditures.
The program came into effect on September 1st, 1999 and is available to corporations and corporations that are members of partnerships. They must have a permanent establishment in the province for the SR&ED carried out there.
The rules in British Columbia regarding the SR&ED tax credit program parallel those of the federal government regarding qualifying expenditures and the expenditure limit. The SR&ED tax credit in this province has been extended so as to allow members of partnerships to claim their proportionate share of the partnership’s SR&ED undertaken in the province for qualifying expenditures after February 20th, 2007.
The filing deadline for claiming the credit is 18 months after the corporation’s tax year end. Non-refundable tax credits can be carried forward 10 years to reduce the income taxes payable. It can also be carried back 3 years. In the case of non-refundable tax credits, a corporation is given the ability of renouncing them.
Provincial qualified expenditures are reduced by government and non-government assistance, but not the British Columbia SR&ED tax credit. The province’s SR&ED tax credit will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.
To claim the credit, a British Columbia Scientific Research and Experimental Development Tax Credit (T666) form must be submitted along with the T2 Corporation Income Tax Return.