A draft of upcoming legislative proposals by the Canadian Finance Department, released August 14th, has revealed changes to the SR&ED program as detailed in the 2012 federal budget:
- Removal of capital from the expenditure base (for capital expenditures incurred in 2014)
- Reduction of the proxy to calculate overhead costs from 65 percent to 60 percent for 2013 and to 55 percent after 2013 (to be fully phased in as of January 1, 2014)
- Reduction of contract payment eligibility to 80 percent of the payment (effective January 1, 2013)
- Reduction in the General Investment Tax Credit rate from 20 percent to 15 percent (effective January 1, 2014). This will not affect organizations that qualify for the enhanced rate of 35 percent.
