SR&ED Tax Credit Capture Made Easy

Canadian technology companies can utilize the Scientific Research and Experimental Development (SR&ED) investment tax credit program to reap substantial savings.

What is the SR&ED Tax Credit?

According to the Canada Revenue Agency (CRA), with the SR&ED Tax Credit program, a Canadian controlled private corporation (CCPC) can capture an investment tax credit of 35% up to the the first $3 million of SR&ED qualified expenditures, carried out in Canada. Other Canadian corporations, proprietorships, partnerships, and trusts can earn an ITC of 20% of qualified expenditures for SR&ED carried out in Canada.

Only certain projects and activities qualify for the SR&ED tax credit. According the the CRA, projects qualified for the tax credit:

"... must advance the understanding of scientific relations or technologies, address scientific or technological uncertainty, and incorporate a systematic investigation by qualified personnel."

How Does TrackerSuite.Net Facilitate SR&ED Tax Credit Capture?

The difficulty organizations face in attempting to capture SR&ED tax credits is separating the expenditures that qualify for the tax credit from those that do not. Only certain work activities are applicable to the tax credit, including:

• Basic research, without a specific application in mind.
• Applied research, with a specific application planned.
• Experimental development.
• Support work that is in line with, and directly supports, the eligible experimental development, or applied or basic research.

Other work, such as sales and marketing, routine activities such as data collection, and quality control or testing of materials, devices, products, or processes does not qualify for the tax credit.

TrackerSuite.Net is a suite of Web based, modular applications for project management that allow organizations to easily tie account codes to every activity and financial item involved, vastly simplifying the identification of activities and expenditures that qualify for the the SR&ED tax credit.

Project Tracker.Net offers an end-to-end project lifecycle for managing projects from beginning to end. As well as providing a central location for project materials including tasks, documents, status reports, milestones, budgets and personnel:

• Organizations can track all of their scientific research and experimental development programs and project portfolios.
• Account codes can be assigned to qualifying tasks identifying these that qualify as research or experimental development.
• Documentation and files supporting the SR&ED qualification of the project's activities, including narratives, meeting minutes, emails and IP agreements with contractors, can be stored in a central location, with features including document check-in/check-out and version control.

Project Tracker.Net integrates with Time Tracker.Net, Expense Tracker.Net and Purchase Tracker.Net, allowing users to charge time and expenditures against projects, utilizing account codes for SR&ED items. Purchase Tracker.Net includes a General Ledger section for segregating items used in SR&ED.

Generating Reports on SR&ED Tax Credits

The Tracker Data Warehouse, a Web based reporting engine, receives data from all of the TrackerSuite.Net modules, and serves as the organization's single point of access to business intelligence.

Using the Tracker Data Warehouse, organizations can quickly develop reports on the work that qualifies for the SR&ED tax credit, as well as review real-time reports on the status and cost reports for their scientific research and experimental development programs and project portfolios.

Experience TrackerSuite.Net

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TrackerSuite.Net Advantages

• 100% Web based with extremely fast, highly scalable applications.
• Source code included in licensing.
• Modular structure allows organizations to select the applications they need to assemble the solution they want.