How Your Business Could Immediately Benefit From the SR & ED Credit?
Staying innovative in your field is essential to compete in the today’s world. It is important for businesses to develop new ideas so that they can compete with other businesses. Running a business in Canada gives you a new world of tax deductions that you can use to reduce the income tax you have to pay at the end of the tax year and get a tax refund. Developed by the Canadian Government, SR&ED Credit program is one of the lucrative tax-incentive programs for businesses conductive research and development.
The SR&ED Credit program is one of the lucrative tax-incentive programs for businesses conductive research and development. Approximately 20,000 businesses benefit from the SR&ED Credit every year and more than 2/3rd of those are small businesses. SR&ED does not include work with respect to market research, quality control, style changes, routine data collection and the commercial production of a new or improved product or material. This tax credit program is more technical than financial.
If your answer is yes to the following questions, you are eligible for the SR&ED tax credit.
- Did you attempt to develop a product or process?
- Was there a scientific or a technological uncertainty or obstacle that you have overcome?
- Did you look for strategies to lower your production costs?
- Are you required by the government to perform tests in your business?
- Has your business developed new software?
Canadian controlled private corporations, individuals and trusts and members of a partnership are eligible businesses. The SR&ED credit can provide financial incentives by letting you deduct SR&ED expenditures from your income for tax purposes, offering SR&ED investment tax credit that you can use to reduce your income tax.
Here are a few benefits of the SR&ED tax credit for businesses:
- Businesses that Engage in Qualifying Research & Development
If you operate a business qualifying R&D, you can get a full tax deduction for expenses. Getting a tax credit can improve the return in your small businesses research investment.
- Businesses Can Pool Qualifying Expenses Used for Research & Development
Businesses can pool their qualifying expenses and you carry over any deductions you don’t need. It offers the flexibility of choosing between an immediate tax credit or carry over that tax credit over to later years.
- Generous Investment Tax Credit
One of the top benefits to small business is the generous investment tax credits (ITC). ITCs can reduce the income tax, lowering the cost of your qualifying research and development expenses. The ITC rate is also generous for taxpayers. In most cases, the ITC rate is 20 percent which is great for businesses.
Looking for a Vancouver based firm for tax credits and incentives? Vancouver R&D Services Inc. provides consulting, claim preparation and government audit support to maximize government tax credits for your innovation activities, competitiveness, and growth. The SR&ED tax credit program is open to businesses of all sizes and from all sectors of the economy operating in Canada.