While government sponsored programs in Canada are mainly funding work done in Canada, some foreign based work may be funded also.
Sometimes a company will have project work done in another province than the one in which it is situated. If that is your company, make sure that any SRED claim is filed for the province in which the work was done.
What is the likelihood of changing a CRA reviewer’s mind after they have made a proposal about your claim? We have seen such a change occur, more than once, but such a result is a minority outcome.
The in-person review of your SRED claim involves determining whether you did eligible work, and then if it is decided that you did, a reviewer makes a decision as to what it cost, i.e.: what expenditure amounts are eligible.
Once the CRA reviewers have looked over your claim and received as much of the requested information that they think they are likely to get, they will either accept the claim as filed, or they will write a proposal to amend the claim.
Once your SR&ED claim is filed (within 18 months of the corporation’s year-end…..NO exceptions), CRA processes it. The initial review is a computer-assisted one that assigns a risk assessment score based on the wording and financial info provided.
SRED eligibility focuses on what the work is, how the work was done, why it was done, where it was done, and when it was done.
The purpose of the SR&ED legislation is to induce technological advancement within Canadian industry. This requires research and experimental development.
The case of Formadrain Inc. v. The Queen, 2017 CCI 42, recently determined that a new approach to making tubing used in repairing drains involved SR&ED. The Crown argued that the project’s technological uncertainty was “entirely in the chemical composition of the...