WHAT HAS CHANGED?
The most significant changes involve the way your project descriptions are to be presented. All claimants are now required to complete a five point description of their project.
The order of the questions in the project description section has also changed to reflect the way SR&ED is currently defined in the "Eligibility of Work for SR&ED Investment Tax Credits Policy".
TAX CREDIT IMPACT, AS OF JANUARY 1st, 2014
Form T661 (13) incorporates the following legislative changes announced in the 2012 and 2013 federal budgets:
- Basic tax credit rate for large and foreign owned companies will be reduced to 15% from 20%
- Capital expenditures will no longer be eligible
- Proxy overhead rate will be reduced to 55% from 60%
- Introduces new Part 9 that requires additional information on claim preparers
WHAT THESE CHANGES MEAN
Several companies are living their first experience with the 2012 application policy and have more questions than answers. Every claimant should be considering the impact of this revised policy on their claims and performing a review of their SR&ED strategy to ensure that their current and future projects are not at risk. Pinnacle is regularly called upon to review claims and provide an opinion on compliance to this policy and would welcome the opportunity to discuss such an analysis for your company as well.
Our team is fully versed on the latest policy updates and trends occurring with the SR&ED program. We remain proactive in providing the Canada Revenue Agency feedback on how to improve the delivery of the Tax Credits. We are proud to have successfully delivered over $500 million in SR&ED Tax Credits to our very deserving Canadian clients.