R&D Crédit d’impôt RS&DE RSDE Équité Salariale Comptable Fiscaliste Plan d’affaires Plan stratégique Exportation CDAE Avis au lecteur

Frequently asked questions related to R&D tax credits / SR&ED tax credits

 

Who endorses the SR&ED / R&D tax credit program?

Revenue Canada and Revenu Québec.

 

Who can benefit from R&D / SR&ED tax credits?

With few exceptions, almost all SMEs operating in Canada are able to benefit from the R&D tax credits / SR&ED tax credits.

 

Do we receive a credit or a check?

The majority of SMEs that produce an application for R&D tax credits / SR&ED tax credits received a check from Revenue Canada and Revenue Quebec. However, depending on the status of your business (INC. vs ENR), your income, the size of your property, and the structure of your business, it is possible that some of the reimbursements are paid by check and others by tax credits.

 

What is the distinction between R&D and SR&ED?

R&D (research and development) and SR&ED (Scientific Research and Experimental Development) are often confused. In the context of tax credits, SR&ED means that your research and development is aiming for technological advancement.

 

Who will analyze my SR&ED / R&D tax credit application and how?

Scientific advisors who specialize in your industry and / or a financial auditor from the Canada Revenue Agency (CRA) will first evaluate the eligibility of your application based on the R&D criteria / SR&ED criteria. If accepted, the CRA will send you a check and forward your file including their results to Revenu Québec who will also conduct a financial audit of the submitted R&D, where you would then receive a 2nd check.

 

What is the difference between the replacement amount method (proxy) and the traditional method?

Rather than list all your expenses (electricity, telephone, heating, etc.). And try to justify the proportion allotted to your research and development through the method known as the traditional method, Revenue Canada offers to use the replacement amount method (proxy). The replacement amount is designed to replace all of your overhead costs by an amount that depends on your SR&ED investment in salaries. To calculate, simply multiply the amount of wages that you invested in SR&ED by 65%. This proxy amount is then subject to a refund of 35%. The proxy amount method is used in most cases because it is often financially advantageous.

 

In case I am audited, do I have to open all my books?

If ever there was a scientific and / or financial Audit regarding your R&D tax credit application / SR&ED tax credits application, then only the R&D / SR&ED documentation would be subject to the audit.

 

I need financial help to start my R&D. Can the SR&ED tax incentive program help me financially?

The R&D / SR&ED tax credit program is not a subsidy. First you need to invest money in SR&ED (wages, subcontractors, materials, etc.) before producing and submitting an application for SR&ED / R&D tax credits, and only at the end of your fiscal year. Once eligibility is confirmed, you will receive a refund from Revenue Canada first, then a second reimbursement from Revenu Québec.

 

I have done some R&D but I have very little documentation to support my application. Can I file a R&D tax credit application?

You can file an application as long as we are able to trace evidence normally produced to show that the R&D / SR&ED has really taken place. We will simply estimate your time invested in R&D before completing your request. Then we can gradually implement a SR&ED / R&D documentation system that meets all the requirements of the SR&ED / R&D program.

 

My R&D project is a failure. Can I file a R&D / SR&ED claim?

Yes, the success or failure of a project is of no consequence.

 

My company does not pay or pays very little or no tax. Can I file a SR&ED / R&D claim?

Yes, this is of no consequence

 

My company is registered, can I file a SR&ED / R&D tax credit application?

Yes, although the refund rate of your SR&ED expenditures will be reduced by about 40% compared to an incorporated business.

 

Will you help me document and train for SR&ED?

Yes, we provide regular training in R&D tax credits / SR&ED tax credits. As a customer of Pro Gestion, you will also enjoy our documentation kit absolutely free.

 

What forms do I complete to generate R&D / SR&ED tax credits application?

You must complete at least the T661, T661 Part 2, RD222 and RD1029.7. Depending on your situation, it is possible that additional forms are required.

 

My accountant is not very comfortable with the R&D / SR&ED forms. Will you help me?

Yes, we work with our client’s accountants to complete and systematically check all the forms they produce. Our experts in scientific research and experimental development (SR&ED) are also able to complete all the forms for you if necessary.

 

How long is required to complete SR&ED / R&D claim?

You should expect a minimum of 120 days if it is produced with your original tax return and 240 days if it is produced with an amended statement. However, it is not unusual that our applications are processed within a few days or even weeks.

 

I'm outside the Montreal area. Are you able to serve us?

Our customers are all over Quebec. We travel everywhere and in 99% of cases, we do it for free.

 

I am very busy, is filing a R&D application / SR&ED application very demanding?

Our formula is very effective. We will take the minimum of your time to retrieve the required information and file your application. We adapt to your schedule and your availability.

 

Does staff require specialized academic training or a minimum number of years in work experience?

The R&D tax credits program / SR&ED tax credits program does require that personnel assigned to research and develop have pertinent training or work experience. In other words, the program is not a school; the level of knowledge of staff must be at or above the industry standard in which they work.

 

My application was accepted and I received my money. Is it possible to ask me to repay the money received?

In most cases, the decision of Revenue Canada and Revenu Québec are final. That is to say that once the check is issued, no one will ask you to repay in-part or in-whole.

 

You have other questions? Please contact us.

  

 

 


Pro Gestion inc. is an industry leader in the SR&ED tax credit program / R&D tax credit program since 1993, recognized for the superior quality of our work with SME’s in Quebec.

 

Français