Would you like to have certainty that your research and development (R&D) projects will qualify for scientific research and experimental development (SR&ED) tax incentives? Do you want to make sure that your entire claim will be accepted as filed when you submit it to the Canada Revenue Agency (CRA)? If so, the CRA invites you to take part in the Pre-Claim Review pilot.
The CRA will gradually introduce the Pre-Claim Review across Canada and will accept a limited number of participants. The Pre-Claim Review will be offered in the western provinces and territories beginning in August 2016; in Ontario and Nunavut in October 2016; and in Quebec and eastern provinces in November 2016.
The following table provides information on the expected start time for the pilot for each province and territory.
|Province / Territory||Implementation schedule|
|British Columbia||August 2016|
|Northwest Territories||August 2016|
|New Brunswick||November 2016|
|Nova Scotia||November 2016|
|Prince Edward Island||November 2016|
|Newfoundland and Labrador||November 2016|
What are the benefits of the Pre-Claim Review?
The Pre-Claim Review will give you the certainty that your claim will be accepted as filed when it is received by the CRA. You will get a determination on the eligibility of your R&D work, and how much of your work and associated expenditures qualify for the SR&ED tax incentives before submitting your claim.
The review of an SR&ED claim is conducted after the CRA has received a complete claim, which can be up to 18 months after the fiscal year end. This may create a significant delay between the performance of SR&ED work and the CRA’s review of the work. Because of this, one of the biggest challenges for claimants is to demonstrate how the work that is claimed is SR&ED. By participating in the Pre-Claim Review pilot, you allow the CRA to conduct a review when the work is taking place, while information and people are more readily available. This will make it easier to establish the scientific or technological knowledge base in a specific business context, and to evaluate whether the work performed is SR&ED.
Who can participate in the Pre-Claim Review?
You must meet the following criteria to participate in the Pre-Claim Review:
- Your business must be incorporated in Canada.
- SR&ED work underway must not be linked to a formal objection or litigation.
- You must not have more than one prior SR&ED claim under review at any point in the current year.
- You must have previously participated in a Pre-Claim Consultation, a First-Time Claimant Advisory Service, or an SR&ED review.
- You will not be claiming more than 20 projects for the current tax year.
- You must provide a Self-Assessment Learning Tool (SALT) report (Step 1 and Step 2) for each project that you plan to claim for the current year.
- You must be willing to participate in periodic review meetings with CRA reviewers.
How can you request a Pre-Claim Review?
If you meet all of the above conditions and want to take advantage of the Pre-Claim Review, you must complete and submit the Request for a Pre-Claim Review form.
If you would like more information about the Pre-Claim Review, please call your local SR&ED contact.
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