SR & ED

The SR&ED government refunds / tax credits incentive program
The Scientific Research and Experimental Development (SR&ED) program aims to support the Canadian companies in all sectors and sizes by rewarding their Research and Development (R&D) activities. It is the largest single source of federal government support designed to encourage research and development (R&D) in Canada.
Each year, the SR&ED program provides over $4 billion in investment tax credits (ITCs) to over 18,000 claimants. Of these, about 75% are small businesses.
SR&ED is the Canadian government incentive program and has been administered by the Canada Revenue Agency (CRA) since the 1980’s. The Canadian companies can receive a 35% cash refund and/or tax credit on funds spent on R&D from federal government. While additional amount is also paid by provincial government to boost total amount of credit. For example, those incorporations that are operated in Ontario can get an additional 10% refund from government of Ontario to get 45% of total R&D expenditure.
Major expenditures include your time, employee labor, materials and equipment that were involved directly for R&D activities, regardless of if you have paid any tax.

Your company must be incorporated in Canada.
Your company must have expenditures incurred mainly within Canada (some conditions may apply for abroad expenditures).
Qualified expenditures must be done for technical and technological improvement and development. e.g., for innovation, creation or modification, products or processes by following an experimental approach and/or scientific investigation.
If your experimentations resulted in success, it's great. However, your failed activities are also compensated in SR&ED program. Each stage of product/process modification is also qualified in this program too.

Am I eligible to apply for the SR&ED program?
If your corporation is privately owned, and it has a payroll (employees), so might have some qualified expenditures that can be rewarded by government of Canada. However, you need to describe that some works have been done to create or modify a material, device, product, or process inside of your company. All activities within the last two fiscal years can be accepted if applied on time, even you might had failure in your activities.

Have you tried to improve the efficiency, performance or quality of your existing products or services?
Have you ever designed new tools or modified your existing equipments, or machinery to do your works faster, more reliable, with less waste, or other similar technical criterion?
Have you ever tried to solve a complicated order or experienced unexpected technical problems for your productions or service?
Have you ever built any samples, prototypes, conducted trials, or created custom or unique products for clients?

If you answered ‘YES’ to any of the questions call Optimal Solution Inc now to set a free meeting with a SR&ED expert consultant to evaluate amount of money that your company is deserved to get from CRA.

Business types that qualify for the SR&ED cash refund / tax credits
Any privately owned and incorporated company, which has a payroll and performs experimentation. The success or failure of experimentation is not a factor. And since most companies do conduct experimentation, you will most likely qualify!

Qualified expenses for the SR&ED claims
Employee wages, sub-contracts and owner’s labor represent the bulk of the claims expenses Materials and capital expenses are also allowed in claims if these materials and expenses were used only in eligible projects.

The SR&ED refunds/tax credits incentive program submission process
For submitting a SR&ED claim, our technical consultants will prepare a detailed technical report describing your project, and the development or experimentation performed.
Our financial consultants will also prepare all the tax schedules and accounting reports detailing the costs associated with the project. A properly prepared report is essential for your submission to be accepted. Optimal Solution Inc carefully considers every detail of your SR&ED claim for accuracy and effectiveness. You are asked for final review of your application prior to submission.