The CRA has a video series that explains aspects of the SR&ED tax credits program. Video 2 goes through some more of the basics for someone who is new to the program.
In this video, I’ll tell you about what type of work qualifies for the tax credit. To qualify as SR&ED, your work must meet the definition of one of the following: basic research, applied research, or experimental development.
Let me explain.
One. Basic research. This is work carried out to advance scientific knowledge. It’s usually done in universities or research institutes.
So, this type of research is purely to gain scientific knowledge.
Two. Applied research. It’s also work carried out to advance scientific knowledge but, unlike basic research, it’s done with a specific practical application in view.
Three. Experimental development. This work is carried out to achieve technological advancement. It’s also by far the most common type of SR&ED work.
So, what does technological advancement mean? It means that you are generating information or knowledge to advance your technology base. This, in turn, will help you to develop new products or processes or improve existing ones.
A word of caution though! A new or improved product does not always mean that a technological advancement was achieved…”
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