Tax credits — a way to recoup development costs
The Canadian Plastics Industry Association (CPIA) recently announced that as a result of a collaboration with the Canada Customs and Revenue Agency (CCRA), Dr. Martin Vines has been appointed to the p...
The Canadian Plastics Industry Association (CPIA) recently announced that as a result of a collaboration with the Canada Customs and Revenue Agency (CCRA), Dr. Martin Vines has been appointed to the position of National Technical Sector Specialist — Plastics. This new position within the CCRA is designed to help the plastics industry benefit from Scientific Research and Experimental Development (SR&ED) tax credits.
Vines will act as a liaison between CCRA and the industry, to help the industry better understand the SR&ED compliance requirements and the review process. He will also help CCRA personnel improve their understanding of plastics industry practices.
In general terms, to be eligible for the SR&ED credits, projects or work must have:
— technological advancement;
— technological uncertainty; and
— be approached in a systematic manner by qualified personnel.
Routine work, such as debugging a machine during start up, is not usually eligible; work to design a mold for a new material formulation, which uses a systematic process to resolve the uncertainty relating to the material and thus adds to understanding of the technology, could be eligible.
The federal tax credits can range from 20 to 35 percent of the cost of the project. Provincial credits vary but could almost double that, says Vines. He adds that 11,000 companies claim about $1.4 billion of SR&ED credits every year.
For more information call your local CCRA office, or check out the extensive documentation available at www.ccra-adrc.gc.ca/sred.