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January 2013

Budget 2012 Enacted (posted: Jan 15, 2013)

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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.