The Scientific Research and Experimental Development (SR&ED) program is a federal tax incentive program to encourage Canadian businesses of all sizes and in all sectors to conduct research and development (R&D) in Canada that will lead to new, improved, or technologically advanced products or processes.
Generally, a Canadian-controlled private corporation can earn an investment tax credit (ITC) of 35% up to the first $2 million of qualified expenditures for SR&ED carried out in Canada, and 20% on any excess amount.
Other Canadian corporations, proprietorships, partnerships, and trusts can earn an ITC of 20% of qualified expenditures for SR&ED carried out in Canada.
Claimants can apply for SR&ED investment tax credits for expenditures such as wages, materials, machinery, equipment, some overhead, and SR&ED contracts.
To qualify for the SR&ED program, a project must:
For a listing of eligible and ineligible projects, see the section entitled "What Work is Eligible" in CRA's brochure An Introduction to the Scientific Research and Experimental Development Program.
Businesses have to complete and submit these forms with the tax return for the year:
See also Application policies in the Publications Section.
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Quebec Contact(s):
See National Contact.