SR&ED pilot project for pre-approval service—we welcome your contribution

Date: January 24, 2013

Would you like to contribute to improving the Canada Revenue Agency’s (CRA’s) process for reviewing the eligibility of scientific research and experimental development (SR&ED) claims? Would you like to find out sooner whether the research and development (R&D) work you are doing or plan on doing qualifies for SR&ED tax incentives? If so, please consider taking part in the CRA’s pilot project to test a proposed pre-approval service.

The 2012 Federal Budget announced several administrative measures to enhance the predictability of the SR&ED program. One of the measures was for the CRA to conduct a pilot project to determine the feasibility of a formal pre-approval process for SR&ED claims. The CRA is now ready to test a proposed service through a pilot project. We need businesses to participate in the pilot project to see if the proposed service would meet their needs, and to establish whether it is feasible from the CRA’s perspective.

What would the proposed pre-approval service provide?

The pre-approval service would be an option that would help businesses plan, budget, and make better investment decisions about SR&ED projects in Canada. The service would allow for more certainty about the eligibility of an SR&ED claim or project. Also, the service would help you to determine what R&D work and expenditures are eligible for SR&ED tax incentives and what supporting evidence you should keep.

In addition, the service would:

  • provide advisory services on the SR&ED program;

  • provide information and advice on preparing and submitting your SR&ED claim;

  • enable your business to get the SR&ED tax incentives faster;

  • give you all the information needed to complete your Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim;

  • minimize the effort to prepare your SR&ED claim at year end; and

  • ensure that you will not be subjected to a post-filing onsite review of your SR&ED claim.

The pre-approval service would give you eligibility determinations on your R&D work and expenditures as your work progresses. You would then receive a determination about the eligibility of your proposed SR&ED claim before you file it. This would simplify the processing of a claim, as well as, reduce the time and cost to prepare it.

Who can participate in the pilot project? *(See note below)

To participate in the pilot project, you have to meet the following conditions:

  • you are not a partnership or an individual;

  • your business can claim SR&ED tax incentives (see Who can claim SR&ED tax incentives and what are the benefits?);

  • your fiscal year ends between August 31, 2013, and December 31, 2013;

  • you will start at least one new SR&ED project during your fiscal year referenced above;

  • you are seeking pre-approval of:

    • your whole SR&ED claim and you expect to claim 20 or less projects; or

    • only one new project that is expected to end within three years and the estimated SR&ED expenditures for each fiscal year will be between $50,000 and $1,000,000;

  • you do not have any SR&ED claims under objection with the CRA or in litigation for projects or issues continuing into the time frame of the pilot project; and

  • you are up-to-date with the filing of your SR&ED claims and you do not have more than one year under our review.

Contact us

If you meet all of the above conditions and are interested in participating in the pilot project, or if you want more information about the pre-approval service, please send us a contact name and telephone number to the following email address: CP-PO_SRED_FPAP-POAP_RSDE@cra-arc.gc.ca. To indicate your interest in participating in the pilot project, please send your email message by February 14, 2013.

Note: *If you do not meet all the above conditions but are interested in participating in the pilot project, we can discuss this with you. Please use the above email address to send us a contact name and telephone number.