Newfoundland and Labrador – SR&ED Tax Credits

In Newfoundland and Labrador, the SR&ED tax credit is administered by the CRA (Canada Revenue Agency). It is fully refundable at the rate of 15% of eligible expenditures.

The SR&ED tax credit program is available to taxpayers, including corporations and individuals, beneficiaries of a trust and members of a partnership with a permanent establishment in the province for the SR&ED carried out. The details of the SR&ED tax credit program in Newfoundland and Labrador can be found in section 42 of the Income Tax Act or on their website.

Eligible expenditures in Newfoundland and Labrador are not reduced by the government and non-government assistance, including the Newfoundland and Labrador R&D tax credit, except with respect to Harmonized Sales Tax(HST) and goods and services tax (GST) input tax credits. The Newfoundland and Labrador R&D tax credit will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.

The filing deadline for claiming the R&D credit is 12 months after the filing due date. The carry forward or backward clause that is applicable in other provinces is absent here. When applying for the tax credits, the following forms can be used:

  • T2SCH301 Newfoundland and Labrador Research and Development Tax Credit (Corporations)
  • T1129 Newfoundland and Labrador Research and Development Tax Credit (Individuals)

Activities that may qualify for the SR&ED tax credit in this province include manufacturing, product development, product engineering, professional services and software or application development. Expenditures include wages or training, testing and external consulting services.

The SR&ED tax credit is used to boost corporations and individuals who are developing or improving products, services or processes that help the Canadian economy.