Everything you need to know about the SR&ED tax credit for the manufacturing industry

  • By Nicholas Garcia
    • 02 Nov, 2020
    • read
  • Twitter
  • Linkedin
Manufacturing

What is the SR&ED tax credit?

The Scientific Research and Experimental Development (SR&ED) tax credit is a government incentive available to a wide range of companies in the design and manufacturing sector. This tax credit enables qualifying companies to obtain a deduction based on income expenditures and costs associated with research and development activities.

How can you benefit?

SR&ED credits can reach a rate of 35% for Canadian Controlled Private Corporations (CCPCs) and 15% for other corporations. Provincial SR&ED tax credits are also available and rates and conditions vary by Province.

The credit is primarily used to offset Corporate Taxes, but for CCPCs, it is also reimbursable

Examples of qualifying SR&ED activities

  • Innovations in process design
  • Simulation of complex systems
  • Research on materials
  • Automation technology
  • Reducing process cycle times
  • Reducing waste and losses
  • Increasing energy efficiency
  • Process control technology

Examples of Qualifying expenses

  • Employee salaries for SR&ED activities
  • Materials consumed in SR&ED activities
  • Sub-contracting expenses related to SR&ED

To have your innovation project evaluated or further discuss the SR&ED tax credit, reach out to our experts today!

Author

Nicholas Garcia
Nicholas Garcia

Senior SR&ED Manager

Explore our latest insights

More arrow_forward
Feeding the growing population

The Role of Technology in Feeding the Global Population

The solution to feeding the growing population isn’t as simple as many people would think. Simply...

AgrInnovate grant

Know your grants – Episode 14: AgrInnovate Program

Discover the AgrInnovate Program with Leyton! For this episode, we explain how this grant can fin...

Federal Budget 2023 Highlights

Funding Opportunities for Canadian Businesses in 2023-4: Gover...

Here are the funding opportunities available for the upcoming year and updates on existing programs:

Data governance

What is Data Governance and Why is it Important for Canada?

Data governance is the establishment of decision rights and an accountability framework to ensure...