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Summary of SR&ED Changes |

The general 20% SR&ED tax credit rate will be reduced to 15% effective January 1, 2014, prorated for taxation years which straddle this date. The enhanced 35% SR&ED tax credit rate for eligible CCPCs will still be eligible on the first $3 million of qualified expenditures annually. Effective January 1, 2014, capital expenditures will be excluded for property acquired, and to amounts paid or payable for the use, or the right to use, property, during any period after 2013. This measure will also apply to otherwise eligible contract payments to the extent that the payment is in respect of a capital expenditure.The prescribed proxy amount, which is in lieu of itemizing overhead expenditures, will be reduced from 65% to 60% for 2013, and to 55% after 2013, prorated for taxation years which straddle the applicable calendar years.With respect to expenditures incurred on or after January 1, 2013, only 80% of payments made to arm’s length contractors will qualify as SR&ED, down from 100%. The intent of this proposal is to parallel the tax rules with respect to payments to non-arm’s length contractors by excluding the profit portion where the contractor is at arm’s length.Any capital expenditures included in the SR&ED contracted out will be excluded prior to the reduction to 80%. Consequently, SR&ED contractors will be required to inform the contract payers of these amounts.


SR&ED Eligibility

SR&ED Project program criteria

Summary of SR&ED Changes

Do You Qualify For SR&ED?



CTAP – Your Virtual SR&ED Team