On December 14, 2012, the Government of Canada passed Bill C-45 into law thereby enacting the SR&ED changes proposed in the 2012 Budget. As discussed in previous postings, these include:
- Reduced eligibility of SR&ED contracts and 3rd party payments from 100% to 80% as of January 1, 2013
- Gradual reduction of the Proxy Overhead Allowance from 65% to 60% starting January 1, 2013 and then to 55% starting January 1, 2014.
- Elimination of capital expenditures starting January 1, 2014 – although soft costs, for example wages for self-constructed assets, will be allowed.
- Reduction of the general ITC rate from 20% to 15% starting January 1, 2014
Non-CCPC businesses with high capital expenditure rates are expected to be those most impacted by the new laws. For further information please contact your TSGI representative or refer to:[sws_ui_icon ui_theme=”ui-smoothness” icon=”ui-icon-triangle-1-e”] [/sws_ui_icon] TSGI Analysis of the Impact of the 2012 Budget on the SR&ED Program [sws_ui_icon ui_theme=”ui-smoothness” icon=”ui-icon-triangle-1-e”] [/sws_ui_icon] Proposed Decreases to SR&ED Benefits for Contracting Research to Post-Secondary Institutions
Note: TSGI does not maintain this news article after its initial posting. Readers are further advised that the information presented here may not be sufficient for unassisted tax planning. Please contact a TSGI representative if you require clarification or other assistance regarding this topic.