AboutOther Tax Credits

Beyond SR&ED – Claiming Marketing Expenses

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SR&ED Marketing Costs

Moving beyond SR&ED to claim your marketing expenses.

Successfully marketing a product you have designed, developed and built is difficult and can be one of your biggest costs. It is, therefore, important to recognize which funding sources include marketing as an eligible expense.

Are Marketing Costs Eligible for Funding?

If your company creates educational software applications for mobile platforms and your product is innovative, it may qualify for SR&ED. However, if you hired a designer for the front end development and a marketer to help push it out to potential customers, none of the marketer’s time is eligible for SR&ED. These costs, however, may be eligible under other programs.

Here are some of the major sources of funding for the software industry, along with relevant breakdowns of eligible costs:

Funding ProgramEligible CostsReturn Percentage
Ontario Interactive Digital Media Tax Credit (OIDMTC)Production and development, marketing and distribution, some administrative overhead.40%
Scientific Research and Experimental Development (SR&ED) Tax Incentive ProgramProduction, development, and research, some equipment, materials.35%
Canada Media FundProduction and development, marketing and distribution, equipment, administrative overhead.Various
National Research Council – Industrial Research Assistance Program (NRC-IRAP)Salaries for production and development, marketing and distribution, administrative. (All Salaries which contribute to “develop technologies” and “successfully commercialize” them.)75% - 100%

Know Your Options Before You Spend

Notice that SR&ED does not include any marketing expenses; however, educational and promotional websites may be included in the other programs listed above as a marketing expense.

Knowing where you can recover your costs can help determine how to allocate resources and ideally should be taken into consideration before incurring expenses to ensure that eligibility criterion is met.

The Importance of Creating a Plan

The question is whether the program is still worthwhile applying to, once the eligible expenses have been isolated. Questions like this are easy to miss. Even if you don’t have many marketing expenses, it’s important to find funding where your major costs are eligible.

Have you applied for government funding to cover your marketing costs? Is the program you applied through on this list?

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