Recent Changes to the Canada Revenue Agency (CRA) SR&ED Glossary

April 2015 eligibility of work for SREDUpdates to the CRA’s SR&ED Glossary

On the CRA’s website, the SR&ED glossary was quietly changed on March 30, 2017. The changes affect the glossary definitions for the terms “humanities” and “social sciences”.

What changed?

The changes were small, and so was the impact. Essentially, the same line was deleted from both glossary terms:

“Academicians generally categorize knowledge into four main areas: physical sciences, biological sciences (or natural sciences), humanities, and social sciences, although others recognize only two categories: natural sciences and social sciences.”

According to the CRA, both definitions were “simplified to improve understanding and clarity.” Work in the humanities and social sciences is largely excluded from SR&ED tax credits, with the exception of some psychological research. The removed line helps readers get to this point of what constitutes work in the “humanities” and “social sciences” much more quickly without the need for more background information on how knowledge is categorized.

The “humanities” definition now reads:

“The humanities are branches of knowledge that concern human beings and their culture or analytic and critical methods of inquiry derived from an appreciation of human values and the unique ability of the human spirit to express itself.

As a group of educational disciplines, the humanities are distinct in content and method from the physical and biological sciences and, somewhat less decisively, from the social sciences. The humanities include the study of all languages and literatures, the arts, history, and philosophy.

Work with respect to research in the humanities is specifically excluded from the definition of SR&ED.”

The “social sciences” definition reads:

“Social sciences are disciplines characterized by their concern with human beings, their culture, and their economic, political, and social relationships with the environment.

Generally, the social sciences include anthropology, economics, political science, psychology, sociology, and sometimes education, law, philosophy, religion, and history. Management is also considered a social science.

Work with respect to research in social sciences is specifically excluded from the definition of SR&ED . However, under certain circumstances, work with respect to psychological research may be eligible.”

The Conclusion

These changes should make determining what are “humanities” and “social sciences” much easier for those looking for a fast and easy definition for both, which is a very welcome change.

If you want to view the newly changed definitions, please consult the SR&ED glossary.

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