How to benefit SR&ED as a foreign company?
The SR & ED tax credit program was created for Canadians who innovate in Canada, but what about foreign companies that do research and development on Canadian soil?
They can enjoy it too.
SR & ED is one of the best innovation tax credit programs in the world. Canada and Quebec both support research activities by foreign companies.
Partagez ce Tweet SVPA foreign company can benefit from the SR & ED tax credit in two ways: if it claims through a Canadian subsidiary or into a Canadian-controlled private corporation (CCPC) that it does not does not have control of.
Canadian subsidiary
If it files through a Canadian subsidiary, the corporation must perform all SR & ED activities in Canada and pay Canadian taxable employees and suppliers. In this context, she is claiming a 20% non-refundable tax credit on her Canadian federal income tax and is eligible for the 15% refundable additional credits in Quebec.
CCPC – Canadian-controlled private corporation
Using a CCPC is one of the best ways to qualify for SR & ED credits. The minority interest of a foreign investor in a CCPC may allow him to claim up to 35% of the first $ 3 million of eligible expenses, plus additional refundable credits of up to 30% in Quebec.
Canadians Abroad
Canadian companies doing R & D abroad can still apply for SR & ED in Canada. Claimants who perform the SR & ED must be Canadian residents. A maximum of 10% of the wages and salaries of the SR & ED claim may come from eligible activities outside Canada.
To learn more about foreign companies and SR & ED, visit Invest in Canada.
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