SR & ED
Canadian Tax incentives within the business sector are highly encouraged by the government, both on the federal and provincial platform. The incentive is available to all sizes of business, and in all sectors of business. The purpose is to further conduct research and development (R&D).
SR & ED financial incentives branch into three categories;
Income Tax Deduction
Investment Tax Credit
Historically, the SR & ED programs provide more than $3 billion in tax incentives to over 20,000 claimants annually, making it the single largest federal program that supports business R&D in Canada. The Canada Revenue Agency (CRA) is responsible for administering SR & ED programs.
There are two main benefits of the SR&ED tax incentives:
Combine your SR & ED expenditures and subtract them from current year income, or subtract for another year
Obtain the SR & ED tax credit to reduce income tax