SR&ED Tax Credit: Need for Contemporaneous R&D Documentation (Views: 4477)

Mon, 24 Jan 2011

      As we mentioned in an earlier blog, the SR&ED tax credit incentive is one of the most generous funding programs in the world. In order to be able to benefit from it, companies have to make sure they consistently keep contemporaneous (on an on-going basis) documentation about the R&D activities they undertake. There has been a noticeably stronger emphasis placed on documentation by the Canada Revenue Agency over the last two years.

      On the technical side, the contemporaneous documentation process should start with the outlining of the technological objectives at the start of a project, continue with the experimental development work undertaken and related findings, and conclude with the final conclusions on the project.

      On the financial side, the time spent, related expenses and supporting documentation should be tracked throughout the fiscal year. If done properly, the CRA Research and Technology Advisors should be able to quickly and efficiently accept the proof for an SR&ED claim and this should strongly improve the likelihood of a claim being accepted as filed.

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