HAD AN UNPLEASANT SR&ED CLAIM REVIEW BY CRA?
June 26, 2018 | 9:40 pm BY Susan Mattice | SR&ED
THE FOLLOWING PIECE WAS ORIGINALLY PUBLISHED IN IT.Business.Ca
The SR&ED tax credit program is odd in that from a tax policy viewpoint it is an incentive program, nudging companies to carry out more R&D in Canada and develop innovative products and processes.
However, because the program is administered by CRA, one must deal with tax auditors, which is intrinsically a disincentive.
To be fair, CRA is tasked with administering the Act, including any incentives in the Act. This partly means protecting the integrity of tax collection. Those old enough to remember the SRTC program, forefather to SR&ED, know how such a program can be abused quickly.
Under the SRTC program, well over a $1 billion of tax credits flowed out before CRA could examine the underlying R&D projects, many of which were bogus. This program lasted for only a few years with significant damage inflicted on the R&D ecosystem. As the SR&ED program now has been around for over 30 years, CRA has seen its fair share of questionable SR&ED claims.
You can read this piece in its entirety here.