Scientific Research and Experimental Development (SR&ED)
What is SR&ED
Science Research and Experimental Development (SR&ED) pronounced (SHRED) is a federal tax incentive program here in Canada. The Canadian government supports innovation in Canada by providing a tax incentive for innovative work performed in Canada. Research and Development work in Canada does not guarantee SR&ED eligibility as CRA has their own guidelines in relation to what constitutes SR&ED work. SR&ED is claimed at the end of each fiscal year and is administered by CRA.
As defined by CRA, this means there is a systematic investigation or search that is carried out in a field of science or technology by means of experiment or analysis and that is:
(a) basic research
(b) applied research
(c) experimental development
The method to establish this involves answering the following questions:
Was there a scientific or a technological uncertainty?
Did the effort involve formulating hypotheses specifically aimed at reducing or eliminating that uncertainty?
Was the overall approach adopted consistent with a systematic investigation or search, including formulating and testing the hypotheses by means of experiment or analysis?
Was the overall approach undertaken for the purpose of achieving a scientific or a technological advancement?
Was a record of the hypotheses tested and the results kept as the work progressed?
At Colum Consultants we can help you better understand if you meet the requirements for SR&ED as set out by CRA.