British Columbia Canada SR&EDTax 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.
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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.
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Tax Credit Amount
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.
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 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.
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 Ryan team of Canadian government funding consultants.
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