Yearly Archives

2014

Clarification of SR&ED Policy: Companies Receiving a FTCAS Visit May Also Be Audited. (posted November 20, 2014)

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Background
The First-Time Claimant Advisory Service (FTCAS) is an education program introduced by the Canada Revenue Agency (CRA) as a result of commitments made by the Federal Government in the 2013 Budget. The purpose of the FTCAS is to provide a personalized, face-to-face, information session to companies who are new to SR&ED. Early details of the FTCAS were explained in TSGI’s web post of February 27, 2014.

 

Update on FTCAS Procedures
When the FTCAS was first publicized, the CRA indicated that companies that received a FTCAS visit would not be audited for that year. Recently, however, a TSGI client was informed that they will receive a FTCAS visit as well as a detailed SR&ED review (audit) of their claim. In response to TSGI inquiries the CRA has clarified that some SR&ED claims will receive “a detailed review with a FTCAS component”.

 

Key Learning
Prior to the release of this information, companies that received a FTCAS notice had assumed that their SR&ED claim would not be audited (i.e. that they would receive the full amount of their claim without the possibility of a downward adjustment). In light of the information above taxpayers should not make this assumption.

 

Further Information
Specific inquiries regarding this topic may be directed to:
Graham Smith
VP-Business Development
TSGI Chartered Accountants
403-451-3376

 

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.

2014 List of Canada’s Top 100 Corporate R&D Spenders (posted November 11, 2014)

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Research Infosource Inc. has released its annual list of Canada’s Top 100 R&D Spenders. The study compares the R&D expenditures for the highest-spending corporations in Canada for the 2012 and 2013 fiscal years. In 2013, the top 100 Canadian firms invested over $12.5 billion in R&D, up 4.1% from 2012. For the full list and further information please refer to: www.researchinfosource.com/pdf/2014Top100List.pdf.
 
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.

CRA Prairie Region to Experiment with Changing Reviewers on Files More Frequently (posted November 10, 2014)

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In the past the CRA has maintained reasonable consistency in assigning Research Technology Advisors (RTA’s) and Financial Reviewers (FR’s) to SR&ED files: if a company had a particular RTA or FR on their file in a given year, the chances were good that the same individual would be assigned in the subsequent year. This informal method benefited both the CRA and taxpayers since it reduced the time required to bring new reviewers up to speed on a file. The benefits were particularly apparent in cases where a large number of complex projects were carried forward from year to year.

TSGI has been informed recently that the CRA Prairie Region will be experimenting with increasing the reassignment rate of RTA’s and FR’s on SR&ED files. The purpose is to achieve a higher degree of segregation of duties among CRA personnel and greater objectivity during detailed reviews (audits). The CRA does not plan to deliberately change reviewers each year but taxpayers should not expect to see the same reviewers assigned for many years in a row.

Key Learning:
Taxpayers should expect a higher turnover in CRA review personnel than they experienced in the past. In response, TSGI recommends that taxpayers should budget additional time and resources towards educating new RTA’s and FR’s on the background of their claims. We also recommend that companies review their recordkeeping policies to ensure that information from previous fiscal years has been retained and is easily accessible for future use.

Specific inquiries regarding this topic may be directed to:
Graham Smith
VP-Business Development
TSGI-Chartered Accountants
403-451-3376

 

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.

TSGI Contributing as Panelist to the “TakeStock! AB” Event November 5, 2014 (posted November 3, 2014)

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Graham Smith, VP – Business Development for TSGI Chartered Accountants, will be participating on a panel for the “TakeStock! AB” event planned for November 5, 2014. “TakeStock! AB” is an investor forum specifically designed to showcase some of Alberta’s most promising high-growth companies, both public and private. The forum is open to the public.

Further information and registration details are available at www.takestockalberta.com.

 

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.

 

TSGI Sponsoring Upcoming 2015 PROPEL Conference (posted October 31, 2014)

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For the second year in a row, TSGI Chartered Accountants is proud to be a sponsor of the PROPEL Energy Tech Forum. The aim of this two day conference is to connect new energy-technology firms with partners, funders, support organizations, suppliers, and customers. As such, it fills a critical niche in the ecosystem needed for innovative energy companies to survive and thrive in western Canada. We encourage any organizations with a stake in the Canadian energy industry to attend.

This year’s event is being held at the Westin Hotel in Calgary on January 27th and 28th, 2015. Further information is available at  www.propelenergytech.com.

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

Information Released About CRA’s FTCAS Program (posted Feb 27, 2014)

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At the February 5, 2014 External Stakeholders Working Session in Calgary, the CRA Prairie Region presented important information about the newly launched First-Time Claimant Advisory Service (FTCAS). The FTCAS is an educational effort that was promised through a $5 million funding initiative in the 2013 Federal Budget. Key features are:

  • The FTCAS is intended to provide first-time SR&ED claimants with an opportunity to meet face-to-face with CRA personnel in order discuss important aspects of the program such as eligibility requirements, supporting documentation, and claimant obligations.
  • For the purposes of the FTCAS, first time claimants will be defined as businesses that have not filed a SR&ED claim in the previous 3 years.
  • If selected for the FTCAS program, participation by the taxpayer is obligatory.
  • A FTCAS meeting will consist of a site visit by CRA staff members with an expected duration of 2-3 hours.
  • Meetings are anticipated to be relatively unstructured: while the CRA is expected to cover certain points, at least some of the meeting will be designated to cover topics of interest to the claimant.
  • The CRA has indicated that they are targeting to conduct FTCAS meetings with a high proportion of new SR&ED claimants in 2014.
  • In particular, the CRA Prairie Region Office (serving AB, SK, MB and the NWT) is targeting to visit all first-time claimants processed before April 1, 2014.
  • First-time claimants during this period can expect to have either a FTCAS site visit or a detailed review (SR&ED audit) according to the following decision tree:

FTCAS Process Flow

  • Note that no adjustments will be made to a claim through the FTCAS process.
  • The end product of each FTCAS meeting will be a CRA report that is mailed to the claimant. The report will be brief and will include recommendations for the taxpayer regarding their future claims. CRA has made it clear that they expect taxpayers to act upon the recommendations made through the FTCAS process.
  • Furthermore, CRA has indicated that FTCAS results will be factored into the statistical risk assessment for claims made in subsequent years.

 

TSGI Observations

Taxpayers may be tempted to downplay the significance of the FTCAS, regarding it as simply another mode of outreach and promotion for the SR&ED program. This is clearly not the case. The CRA is devoting considerable financial and human resources to the FTCAS project with the expectation that positive and measureable results will be achieved in terms of claimant self-assessment and future compliance. First-time SR&ED claimants in 2014 should expect and prepare for a FTCAS visit, bearing uppermost in mind that their chances of being audited in subsequent years will be directly affected by the meeting outcome. It also appears likely that the CRA will be unsympathetic towards taxpayers that fail to remedy deficiencies identified during the FTCAS process.

 

Specific inquiries regarding this topic may be directed to:

Graham Smith
VP-Business Development
TSGI-Chartered Accountants
403-451-3376

graham.smith@tsgi.ca

 

 

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.

TSGI-Chartered Accountants Presenting at the upcoming Oil and Gas Taxation Course March 12 and 13, 2014 (posted January 28, 2014)

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Graham Smith, VP-Business Development for TSGI-Chartered Accountants, will be presenting at the Oil and Gas Taxation Course being held on March 12th and 13th, 2014 in Calgary. This conference is aimed at VPs, Directors of Corporate Tax, Controllers, Tax Counsel and Tax Accountants who want to expand their knowledge of  tax matters within the oil and gas sector. This presentation, “SR&ED Tax Credits for Oil and Gas”, will explore the following topics:

– The increasing importance of R&D in the oil and gas industry and how the SR&ED program can accelerate innovation
– Recent evolution in the eligibility criteria
– Computation of SR&ED eligible expenditures
– Recommendations for best practices, including the use of documentation tools and the need for full team participation

 

Registration and conference details are available at:  Oil and Gas Taxation Course.

A 15% promotional discount is available to registrants referred through TSGI. Please contact Graham Smith at 403-451-3376 for information on how to benefit from this offer.

 

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.

TSGI Sponsoring Upcoming 2014 PROPEL Conference (posted January 16, 2014)

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TSGI-Chartered Accountants is pleased to announce our sponsorship of the inaugural PROPEL Conference being held in Calgary on January 22 and 23, 2014. The purpose of this exciting event is to connect energy technology companies with partners, funders, support organizations and customers. PROPEL anticipated to be the most important energy tech event in Canada and TSGI is proud to be associated with this initiative.

Further information and registration details are available at:  www.propelenergytech.com

 

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