SRED Tax Incentives by yu3413

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									SR&ED Tax Incentives

Life Sciences B.C.

28 January 2009
Agenda


►   Introductions

►   Overview of the SR&ED Tax Credit Program
    ►    Technical Criteria
    ►    Financial Criteria
    ►    Investment Tax Credits (ITC’s)


►   Recent Developments

►   Q&A



Page 2                  SR&ED Tax Incentives
Overview of the SR&ED Program


►Federal   tax incentive program;

►SR&ED    must be carried out in Canada by a company
carrying on a business in Canada;

►Taxpayers   can receive both federal and provincial ITC’s

►SR&ED    claim must be filed within 18 months of the year-
end in which the expenditures were incurred



Page 3            SR&ED Tax Incentives
Technical Criteria


There are 3 technical criteria to that need to satisfied in order
for activities to be considered eligible SR&ED.

►Uncertainty   - Technological or Scientific

►Advancement     - Technological or Scientific, and

►Content   - Scientific and Technical. SR&ED work was done
by qualified personnel and results were recorded and
available for review.


Page 4            SR&ED Tax Incentives
Financial Criteria


►Eligible    expenditures include:

         ►    Labour costs
         ►    Contractor costs
         ►    Materials costs
         ►    Overhead costs
         ►    Lease/rental costs
         ►    Third party payments
         ►    Capital equipment costs




Page 5                SR&ED Tax Incentives
Investment Tax Credits


►20%     Federal ITC

►Enhanced     35% refundable credit for CCPCs (with limits);

►Provincial   Credits – Additional 10% ITC in British Columbia

►ITC’s   can be carried back 3 years or forward 20 years




Page 6             SR&ED Tax Incentives
Enhanced ITCs for CCPCs


►Refundable    ITC of 35% for amounts up to the expenditure
limit;

►A  taxpayer’s expenditure limit is impacted by the taxpayer’s
taxable income and taxable capital in the prior year;

►Need    to consider associated group;

►Cont./




Page 7            SR&ED Tax Incentives
Enhanced ITCs for CCPCs Continued


The annual limits are:

►Expenditure  Limit - $3 million for taxation years ending
after February 25, 2008

►   Taxable Income (prior year’s) – Eliminated at $800,000,
    phased out between $500,000 and $800,000, effective
    January 1, 2009 (previously $400,000 and $700,000)

►   Taxable Capital (prior year’s) – Eliminated at $50m.


Page 8            SR&ED Tax Incentives
Recent Developments


►New      T661 & guide issued in November 2008;

►No      change to eligibility requirements;

►Key      Changes:

    ►    Technical questions to be answered within T661 for all projects,
         word limits apply;
    ►    Technical descriptions required for ALL projects (previously the top
         20 only);
    ►    Document checklist for each project;
    ►    Mandatory for taxation years ending after December 31, 2008.

Page 9                 SR&ED Tax Incentives
Questions?




Page 10      SR&ED Tax Incentives

								
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