Canada Proposes Changes to SR&ED Tax Incentive Program

The Government of Canada has announced proposed changes to the Scientific Research and Experimental Development (SR&ED) tax incentive program. These changes are outlined in the 2024 Fall Economic Statement and involve a planned investment of $1.9 billion over six years. Key proposed reforms include:

• Increasing the expenditure limit for the enhanced 35% tax credit from $3 million to $4.5 million, allowing Canadian-controlled private corporations (CCPCs) to claim up to $1.575 million annually.

• Raising the taxable capital phase-out thresholds from $10 million and $50 million to $15 million and $75 million, respectively.

• Extending eligibility for the enhanced 35% refundable tax credit to eligible Canadian public corporations for up to $4.5 million of qualifying SR&ED expenditures annually.

• Restoring eligibility of capital expenditures for both the deduction against income and investment tax credit components of the SR&ED program, with rules similar to those prior to 2014.

These reforms are set to take effect for taxation years beginning on or after December 16, 2024, unless stated otherwise. Further details are expected in the 2024 Fall Economic Statement.

Clarington Post is sponsored by...

Elsa's Ornaments

Beautiful Christmas and holiday ornaments, made custom for you in Newcastle. $5 each.

Email elsasornaments@gmail.com