- Your business must be incorporated in Canada.
- SR&ED work underway must not be linked to a formal objection or litigation.
- You must not have more than one prior SR&ED claim under review at any point in the current year.
- You must have previously participated in a Pre-Claim Consultation, a First-Time Claimant Advisory Service, or an SR&ED review.
- You will not be claiming more than 20 projects for the current tax year.
- You must provide a Self-Assessment Learning Tool (SALT) report (Step 1 and Step 2) for each project that you plan to claim for the current year.
- You must be willing to participate in periodic review meetings with CRA reviewers
While the pilot program is only currently available in the western territories and provinces (British Columbia, Alberta, Saskatchewan, Manitoba, Yukon, Northwest Territories), it will launch in Ontario and Nunavut in October 2016. Finally, Quebec and the eastern provinces (New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland, and Labrador) can expect their launch in November 2016.
The full press release is below:
The Canada Revenue Agency (CRA) introduces the Pre-Claim Review. This is a free, on-demand review that lets businesses know whether their scientific research and experimental development (SR&ED) claim will be eligible before it is filed.
The Pre-Claim Review will give businesses a determination on how much research and development (R&D) work is eligible and what expenditures qualify for the SR&ED tax incentives. This provides claimants with the assurance that the CRA will accept their entire SR&ED claim when it is filed.
The CRA will launch the Pre-Claim Review, as a pilot, gradually across Canada. A limited number of participants will be accepted. This will enable the CRA to assess if the Pre-Claim Review meets claimants’ needs.
The Pre-Claim Review is one more way the CRA is listening to businesses and helping to improve the predictability of the SR&ED Program.
To find out how to participate, go to the Pre-Claim Review webpage.
Timing Is Everything… And Now May Not Be The Time
With the other review programs retired, the release dates’ slow crawl across Canada means that many taxpayers will not have access to external review services until November. Additionally, the stringent criteria may disqualify many organizations who are in need of additional guidance (ie, those who seem to be reviewed year-after-year and cannot determine why). The many changes inflicted upon the program in the last few years makes this a crucial time for claimants to know how much tax incentives they are
The many changes inflicted upon the program in the last few years make this a crucial time for claimants to know how much tax incentives they are entitled to receive. It is hard to imagine the CRA’s popularity increasing if many taxpayers have to wait until November to learn they no longer qualify for all or part of the SR&ED program.