The Globe and Mail has a great article by Susan Smith on SR&ED funding.
The company featured in the article, Integrity Testing Laboratory Inc., employs seven people in R&D and develops tests to see how materials hold up in space. It tested materials for the Canadarm, which plays a large part in NASA’s space shuttle program.
The research and development tax incentive is described as a “holistic financing exercise”, according to Gabriel Baron, partner at Ernst & Young in Toronto.
David Hean, managing director at Scitax Advisory Partners LP in Toronto, talks about the numbers involved: he estimates Canada paid more than $4 billion in tax credits last year alone.
He has three bits of advice for those who want to apply. First, file your taxes on a timely basis. Second, keep detailed records that provide documentation of what work was done, when it was done and who did it. He estimates that SR&ED recipients are audited by Canada Revenue Agency on average once every two to four years. Third, he advises close monitoring of taxable income. More than $500,000 in a given year will diminish the percentage of reimbursement you can receive the following year.”
To read the entire article in the Globe and Mail click here.