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Exploring the Types of SR&ED Funding in Canada

A tax incentive program called SR&ED was created in Canada to incentivize companies to engage in research and development (R&D) activities. This is a quick summary of the various SR&ED funding options. SR&ED funding, through a combination of federal and provincial incentives, plays a crucial role in fostering innovation and R&D in Canada. Businesses should explore both federal ITCs and provincial incentives to maximize their funding potential, driving growth and technological advancement in the Canadian economy. Visit us at https://canadiansred.ca/sred-funding

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Exploring the Types of SR&ED Funding in Canada

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  1. Exploring the Types of SR&ED Funding in Canada

  2. Introduction A tax incentive program called Scientific Research and Experimental Development (SR&ED) was created in Canada to incentivize companies to engage in research and development (R&D) activities. This is a quick summary of the various SR&ED funding options.

  3. Investment Tax Credits (ITCs) • Basic Rate ITCs: • The SR&ED program offers ITCs that allow businesses to claim a percentage of their R&D expenditures. For Canadian-controlled private corporations (CCPCs), the refundable ITC rate is 35% on qualified SR&ED expenses up to a certain threshold, and 15% on any excess.

  4. Refundable ITCs are available primarily to CCPCs, enabling them to receive a cash refund if the credit exceeds their tax liability. Non-refundable ITCs, on the other hand, can be carried forward for up to 20 years or back three years to offset future or past tax liabilities. • Refundable and Non-Refundable ITCs:

  5. 2. Provincial and Territorial Incentives • Enhanced ITCs: • Provinces like Quebec and Ontario provide enhanced SR&ED credits, offering additional percentages on top of the federal ITCs. These enhancements can significantly boost the overall benefit.

  6. Grants and Loans: • Some regions offer grants, loans, and other forms of financial support to complement the SR&ED tax credits. These may come from provincial innovation funds or development programs aimed at fostering regional technological advancement.

  7. CONCLUSION • SR&ED funding, through a combination of federal and provincial incentives, plays a crucial role in fostering innovation and R&D in Canada. Businesses should explore both federal ITCs and provincial incentives to maximize their funding potential, driving growth and technological advancement in the Canadian economy.

  8. CONTACT US 587-200-4163 • www.canadiansred.ca • info@canadiansred.ca • Suite # 2010 - First Alberta Place, 777 - 8 Avenue SW, Calgary, AB, T2P 3R5, Canada

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