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SR&ED For Software Development

What are SR&ED Tax Credits?

 

Scientific Research & Experimental Development (SR&ED) is a Canadian government tax credit program aimed at encouraging businesses of all sizes to conduct R&D to develop new — or improve existing — methods, processes, services and products

SR&ED Investment Tax Credits (ITCs) provide tax relief to eligible Canadian businesses to offset the cost of innovation.

Yearly

a

60,000 R&D
Projects

a

20,000
Claims

a

$3B

 

What Can You Recover?

Up to 69% of eligible R&D expenses (depending on your province) may be refunded from CRA. Eligible expenditures include salaries, sub-contractor fees and materials.

A lot of people think that SR&ED is carried out in laboratories by people in white coats but that is not the case. In 2020, Canada’s Information Communication Technology (ICT) sector spent $8B in business R&D spending, accounting for 42% of all R&D spending in the Economy.

Innovation Knows No Bounds

Businesses across many different fields of Software Development qualify for the SR&ED program, including the ones below. However, the nature of the R&D work you do is more relevant than your business sector when determining eligibility for the program.

- Artificial Intelligence

- Business and Finance

- Analytics

    Data mining

    Decision support systems

- Banking

- Commerce

   Cryptocurrency   

   Trading

   Payment processing

- Compilers, Parsers

- Communications and Networks

   Protocols

- Cyber-security
   Hacking
   Counter-measures
- Database
- Embedded systems
   Automotive software
   Avionics software
   Control Systems
   Medical device software
   Telephony
   Telemetry
- Computer Aided Design (CAD)
- Games
- Information systems
- Logistics

- Manufacturing
   Computer Aided Manufacturing (CAM)
   Distributed Control Systems (DCS)
- Office applications
   Word processors
   Spreadsheets
- Operating systems
- Robotics
- Signal processing
- Simulation
- Testing
- Vision recognition
- World wide web
   Client-side
   Server-side

+ Other applications

Are You SR&ED Eligible?

  1. Did you attempt to overcome scientific or technological uncertainties?
  2. Did you go through an iterative procedure to try to solve those problems or uncertainties?
  3. Did you achieve a technological advancement or increase technical knowledge?

You’re more eligible than you think! 

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  • Have you created a new product, made improvements or added new features to an existing product, or built a prototype? 
  • Have you designed or developed new software, or participated in software rewrites? The iterative nature of continuously making improvements or rewrites to your code to solve a previously unresolved technical uncertainty is considered experimentation. And that’s a key criterion for SR&ED.
  • Have you created prototypes of projects or processes that remain incomplete because of unresolved technical problems? Development is a lengthy process and may not always lead to the desired outcome, however, even unsuccessful prototypes may lead to technological advancement.

Financing innovation

Our processes help to ensure that the SR&ED program is a risk-mitigated, predictable and non-dilutive growth funding solution for our clients.

Your SR&ED claims grow & scale as you do

Unlike other government tax programs, you can apply for SR&ED ever year that eligible work took place in. Receive refunds for development costs, allowing you to grow your team & build
more products.

We have illustrated this concept in the infographic below.

SRED-CaseStudy
SRED-Scaling
SRED-Cycle

Find Out How Much Money You Can Recover From The CRA

Schedule a conversation with one of our SR&ED tax credit experts, where we can help identify:

  • What projects qualify and which R&D expenditures are eligible
  • An estimate of the total return you can expect
  • How to maximize the size of a claim & and to optimize for the success of that claim
  • Potential eligibility for additional Government funding programs
  • If you are already claiming, we will analyze your past claims to determine if anything was missed