Claim Review Manual for SR&ED Research and Technology Advisors

The CRA website has been updated with the complete Claim Review Manual (CRM) for Research and Technology Advisors. The new CRM cancels and replaces The Guide to Conducting a Scientific Research and Experimental Development (SR&ED) Review and Directive 2004-03 SR&ED Reports and is effective June 1, 2010.

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Revised Optional SR&ED Filing Measure for T661

As of January 1, 2014, Part 9 of the Form T661 (13) for SR&ED must be completed with details about the claim preparer(s) involved. If any of the prescribed claim preparer information is missing, incomplete or inaccurate, a penalty of $1,000 may be assessed.

An optional T661 (13) filing measure has been introduced by the CRA. There are now two options available:

  1. Complete T661 (13) Parts 1-10 in its entirety, or
  2. Use the optional filing measure to file details about the billing arrangements separately
    1. Check the appropriate box at line 935 attesting to whether a claim preparer was engaged in any aspect of the preparation of the claim;
    2. Provide the name of each claim preparer – line 940;
    3. Provide each claim preparer’s business number – line 945;
    4. Certify that the information provided in this part is complete and accurate – line 970;
    5. Sign and date Part 9 – line 975.
    6. Omit the billing arrangement code, billing rate, other billing arrangement(s) or the total fee paid, payable or expected to pay – lines 950, 955, 960 and 965 respectively.
    7. Submit a separate paper copy of the T661(13), completing only Part 1 – General Information, and Part 9 – Claim preparer information.   Do not resubmit Parts 2 through 8 or Part 10 of the T661(13).

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Toronto Best Place to Build Startups Due to Government Funding and Access to Talent

Toronto is the best place in Canada to build a startup, and the 8th-best place in the world, according to Genome’s Startup Ecosystem Report.

The Canadian and provincial (Ontario) governments provide startups with substantial R&D funding from IRAP and SR&ED.  In addition, FedDev Ontario and the Ontario Centers of Excellence also provide a wide range of stimulus programs for startups.

On an international scale, Canada has topped world rankings in the latest OECD study for the highest proportion of college-educated adult residents, and Toronto has a disproportionate number of these individuals working in the science, technology, education, mathematics and financial sectors.  University-based incubators and accelerators such as UTEST (University of Toronto), Communitech Hyperdrive (University of Waterloo), and Ryerson DMZ (Ryerson University) are great breeding grounds for tech entrepreneurs looking for mentorship, community and resources to bring their ideas to market.

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Ammendments to SR&ED

Bill C-4 was tabled on March 21, 2013, and proposed ammendments to the Income Tax Act.  This bill has received royal assent and has become law.

A summary of the new ammendments are as follows:

  • Undeducted SR&ED expenditures from before an acquisition of control may be carrieed forward for use in the current year only if the business to which the expenditures relate is carried on throughout the current year by the corporation for a reasonable expectation of profit and only to the extent of its income for the current year.
  • A penalty of $1,000 can be levied in the case of false or incomplete information disclosure of the identity of and the terms of any arrangement with the SR&ED claim preparer.

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British Columbia Extends SR&ED Tax Credit

Finance Minister Mike de Jong announced that British Columbia will extend the Scientific Research and Experimental Development (SR&ED) provincial tax credit for an additional three years until September 2017.  According to provincial Finance Ministry figures, the tax credit was worth $154 million to B.C. companies in 2013-14, with expectations it will represent about $99 million in 2014-15 and $180 million in 2015-16.

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