The Canada Revenue Agency (CRA) has announced that a revised Form T661, Scientific Research and Experimental Development (SR&ED) claim, will be released on October 2013. The new T661 form will accommodate the legislative changes coming into effect on January 1, 2014, and ensure that the form is consistent with the SR&ED policy documents released in December of 2012.
The revised version of Form T661 (13) (revision code 1301) will be effective as of its publication date. The T661(12) version of the form until December 31, 2013. As of January 1, 2014, only the T661(13) version of the form will be accepted for all tax years.
Ernst & Young has signed a letter of intent to acquire Saskatoon-based SRED Automation. This transaction comes on the heels of 2011 deals with RSM Richter in Toronto and Calgary, and OME Group Consultants in Toronto, Montreal and Calgary. All of these transactions underpin the firm’s growing focus on the middle market.
Ryan, LLC, a global tax services firm, announced that they have acquired SR&ED ONE, a full-service SR&ED consulting firm. The acquisition of SR&ED ONE represents a significant milestone in the continued development of Ryan’s integrated Canadian tax services. It also adds a new Ryan location in Vancouver, British Columbia, and supports Ryan’s expansion strategy to ensure a local presence in cities where their premier global clients operate. Danny Ladouceur, Principal and Founder of SR&ED ONE, will join the Ryan leadership team as Principal to lead the continued growth and expansion of Ryan’s SR&ED service offering.
A PwC Canada report found that 50% of Canadian startups took advantage of at least one government source. Among these companies, 35% said that they took advantage of Scientific Research and Experimental Development (SR&ED) tax credits, while 20% received funding from the Industrial Research Assistance Program (IRAP).
The survey also showed that the percentage of start-ups looking for a M&A exit has decreased to 44%, compared to 76% one year ago. This means that more Canadian startups are opting to remain within Canada, while Canada’s economy continues to grow at a slight, but steady pace.
“Emerging companies in Canada are in a good place, and the prospects for profit are high,” says Eugene Bomba, National Emerging Company Services Leader at PwC. “Larger businesses are more willing to work with, and give a chance to, startup ventures, and this friendly climate is helping CEOs to truly develop their businesses while growing their revenue on home soil.”
David Mason, partner at Deloitte Canada and leader of Deloitte’s Ontario private company services tax team, believes that Ontario is not as productive as USA competitors in ICT because of the lack of support for innovation. At the moment, Ontario is offering a 10% refundable tax credit on their first $3 million of SR&ED expenditures, and a 4.5% non-refundable tax credit for all companies. Mason suggested that the Ontario SR&ED top-up should be higher to boost the local technology industry, especially since the 4.5% non-refundable tax credit cannot be utilized by many SMEs and start-ups.
Mason also suggested that a tax credit for investors could further help to spur investment in ICT start-ups. Bristish Columbia currently provides the following tax incentives for venture capital: