British Columbia Canada SR&ED
Tax Credit Programs
Receive Retroactive Research Tax Credits on R&D Projects.
The British Columbia (BC) Scientific Research and Experimental Development Tax Credit is the British Columbia provincial variant of the Canadian federal Scientific Research and Experimental Development (SR&ED) program.
Businesses eligible to apply for the federal SR&ED program may also be eligible to apply for funding through the British Columbia provincial SR&ED program. Funding through the federal and provincial programs can be stacked.
Tax Credit Amount
Depending on a corporation’s circumstances, they may be eligible for a refundable or non-refundable tax credit worth up to 10% of qualifying expenditures.
Eligible Applicants
Corporations or partnerships with a permanent establishment in British Columbia performing approved SR&ED activities in this province.
British Columbia SR&ED Tax Credit
Amount of Tax Credits
The British Columbia SR&ED tax credit follows the federal SR&ED rules for eligible expenses and activities.
- CCPC’s may earn a refundable Investment Tax Credit (ITC) at the rate of 10% on qualified SR&ED expenditures of up to $3 million per annum (expenditure limit);
- A 10% non-refundable tax credit may be claimed by CCPC’s for expenditures in excess of the expenditure limit; and
- The expenditure limit is determined on the same basis as the federal expenditure limit.
- Other corporations (non-CCPC’s) may claim a 10% non-refundable credit;
- The BC SR&ED tax credit is considered government assistance and will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures; and
- Any unused portion of the tax credit may be carried back 3 tax years and/or carried forward 10 tax years.
![Amount of Funding from the Canadian Government](https://www.mentorworks.ca/wp-content/uploads/2020/12/Amount-of-Funding.png)
British Columbia SR&ED Tax Credit
Eligible Applicants
The British Columbia SR&ED tax credit is available to corporations and partnerships that have a permanent establishment in British Columbia. The eligibility requirements for the program require that the business is eligible for tax credits through the Federal SR&ED funding program:
- Corporations and active members of partnerships (other than specified members), performing either basic research, applied research, or experimental development in British Columbia; and
- Applicants should be performing basic or applied research or developing new products, processes, or making incremental improvements to them.
Expenditures incurred by an individual or trust do not qualify.
![Eligible Applicants for Canadian Government Funding](https://www.mentorworks.ca/wp-content/uploads/2020/12/Eligible-Applicants.png)
British Columbia SR&ED Tax Credit
Eligible Expenditures
The British Columbia SR&ED tax credit follows the federal SR&ED rules for eligible expenses and activities. Many of the expenses shown here are similar to the expenses that the business can get funded through the Federal SR&ED funding program. The BC SR&ED Tax Credit can be stacked with the federal SR&ED program.
- Labour: Based on time spent on eligible activities in British Columbia.
- Contractors: Portion of contract related to SR&ED performed on the business’ behalf. Must be a Canadian contractor and work must be performed within the province of British Columbia.
- Third Party Payments: Payments (money or in-kind) to an entity to carry on SR&ED in the province of British Columbia.
- Materials: Materials can be purchased from outside British Columbia but must be used in the prosecution of SR&ED in British Columbia.
- Overhead: Calculated using the Proxy (Quick) or Traditional (Detailed) method.
![Eligible Expenses for Canadian Government Funding](https://www.mentorworks.ca/wp-content/uploads/2020/12/Eligible-Expenses.png)
British Columbia SR&ED Tax Credit
Program Deadlines
British Columbia offers a tax credit for basic or applied research and development of new or improved products or processes provided you submit a claim for SR&ED within 18 months of the taxation year end in which eligible expenditures were incurred.
To determine whether your business is eligible for benefitting through the Federal or BC provincial SR&ED tax credit program, consider speaking with the Mentor Works team of Canadian government funding experts.
![Program Deadline for Canadian Government Funding](https://www.mentorworks.ca/wp-content/uploads/2020/12/Program-Deadline.png)