Understanding the CRA and its requirements

In recent years, the CRA has adopted a more rigorous approach to defining what can be claimed as SR & ED. As a result, there are more audits, disputes and objections. This increases the challenge of the claims process.

Here is an approach and a strategy that significantly increases the chances of success of your claims.

 Our philosophy and winning strategy

Our strategy is to demonstrate to the CRA auditors that your claim meets their requirements. This means your projects and related activities have been selected to meet the tax laws and optimal controls are in place.

The CRA auditors see your claims as more credible, leading to faster conclusion of your claim. More importantly, you improve your relationships with the tax authorities while increasing predictability of your file.

Our success is due to the quality and competence of our resources, of course, but also to our deep understanding of the changing requirements of the CRA.

The requirements of the Canada Revenue Agency (CRA)

The CRA has raised the bar regarding the interpretation of eligibility of SR & ED activities and increased its controls. Specifically we have seen significant developments regarding:

• Evolution of the basic definitions, which also often vary from one adviser to another and from one regional office to another. These new definitions include in particular:
  • Uncertainty and advancement,
  • The direct and support activities,
  • The systematic research by experimentation or analysis.
• The supporting documentation for each SR & ED project must:
  • Be detailed by highlighting the assumptions and conclusions drawn from each experiment,
  • Show a systematic approach,
  • Be contemporaneous and supportthe chronology of the SR & ED activities.

You usually claim credits on your technological developments and new requirements to satisfy the changing needs of your customers. Funding for these SR & ED activities is essential to :

• Maintain or even accelerate your development, and
• Ensure a smooth adaptation in your markets.

In conclusion, the CRA has evolved in its interpretation of the program criteria and you must adapt to it before being surprised.

What do you think ? Do you believe in this convergence approach with the CRA ? Or are you more in favor of the guerrilla ? Why ?