Do you spend money on purchasing capital equipment for your R&D program? Then this announcement by the federal government should interest you.
Capital expenditures were first disallowed from SR&ED claims as part of the 2012 federal budget, which proposed eliminating the eligibility of capital costs under the SR&ED program. This change officially took effect on January 1, 2014.
Before this, businesses could claim capital expenditures on equipment and property used for SR&ED activities. However, the 2012 budget aimed to streamline the program and shift support toward direct funding mechanisms instead of tax incentives for capital costs. Now, with the recent policy reversal, capital expenditures are once again eligible for SR&ED claims starting December 13, 2024.
In a significant policy shift, the Canada Revenue Agency (CRA) has reinstated the eligibility of capital expenditures under the Scientific Research and Experimental Development (SR&ED) tax incentive program. This change, announced in the 2024 Fall Economic Statement, reverses the 2014 decision. The updated policy aims to bolster innovation by providing financial support for businesses investing in research and development infrastructure.
Key Highlights of the Updated SR&ED Policy:
