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.
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
- Data mining
- Decision support systems
- Payment processing
- Compilers, Parsers
- Communications and Networks
- Embedded systems
- Automotive software
- Avionics software
- Control Systems
- Medical device software
- Computer Aided Design (CAD)
- Information systems
- Computer Aided Manufacturing (CAM)
- Distributed Control Systems (DCS)
- Office applications
- Word processors
- Operating systems
- Signal processing
- Vision recognition
- World wide web
- + Other applications
Are You SR&ED Eligible?
- Did you attempt to overcome scientific or technological uncertainties?
- Did you go through an iterative procedure to try to solve those problems or uncertainties?
- Did you achieve a technological advancement or increase technical knowledge?
You’re more eligible than you think!
- 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.
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.