Frequently Asked Questions
Get answers to your most common questions.
Grant Consulting
SR&ED (or SRED) is short for Scientific Research and Experimental Development. It is a federal tax incentive program that comes in three forms: an income tax deduction, an investment tax credit (ITC), and, in certain circumstances, a refund.
The purpose of SR&ED is to encourage Canadian businesses of all sizes and in all industries to conduct research and development (R&D) in Canada. Eligible businesses can get a refund of up to 64% of eligible expenses. Over $3B tax incentives are disbursed to more than 20,000 applicants through SR&ED Program annually.Â
The SR&ED program is available to any business operating and carrying out R&D (Research and Development) in Canada. The qualified R&D work/project can be either basic research, applied research, or experimental development to meet the requirement of the SR&ED program. To start with, you can take a quick self-assessment to check your eligibility or get more information.Â
To apply for SR&ED tax incentives, file the applicable prescribed forms along with an income tax return are required:
-Form T661, Scientific Research, and Experimental Development (SR&ED) Expenditures Claim
-Form T2SCH31, Investment Tax Credit – Corporations, or Form T2038 (IND), Investment Tax Credits (Individuals)
-Supporting documentation, such as technical report
The reporting deadline for corporations is 18 months from the end of the tax year in which you incurred the expenditures.
Other support documents may be required during a review:
– Related records and documents to support financial transactions include financial statements, ledgers, journals, and vouchers, including electronic records.
– Source documents such as receipts, contracts, and general correspondence.
– Related documents and information that support the specific expenditures claimed on Form T661.
A professional advisor can make SR&ED easy and successful to claim.
Reach out to us today for a free consultation with an SR&ED specialist. Let’s Talk.Â
More information to guide you file your SR&ED application.Â
Generally, there are two calculation methods at your disposal and you can choose either of them to estimate and calculate your SR&ED claim:
Traditional Method:
The traditional method will require you to itemize your overhead and related expenditures.
Proxy Method:
This is a simplified method that allows you to claim around 60% of salaries and wages for employees who are directly involved in your SR&ED-qualified work.
However, most companies choose the second method to prepare and proceed with their application since it is easier to estimate and keep the record. Quickly calculate the amount that you can claim from the SR&ED project.Â
Generally, all kinds of businesses could apply for SR&ED with eligible projects. But there are three types of companies that are not recommended to apply:
1. Non-CCPCs (Non-Canadian-controlled private corporations)
2. Non-profit Organizations or companies not paying taxes to the Government of Canada
3. Public Companies
You might be able to apply for the SR&ED tax credit if your business belongs to the following business sectors:
– IT
– Logistics
– Catering
– Travel
– Manufacturing
– Agriculture
– Consulting
– Marketing
– Real estate
– ……
Not sure if you are eligible? Talk to us and check your eligibility.Â
Businesses that are substantially engaged in a qualifying activity, such as manufacturing and processing, development of clean technologies, destination tourism, advanced commercialization, development of an interactive digital media product and research and development of proprietary technologies are eligible to apply. Â
Generally, registration applications and requests for additional equity are processed within 10 business days once all required information has been provided.Â
Yes, however one of the conditions for registration is that a company must have a minimum of $25,000 in equity capital. A convertible right is excluded from the $25,000 in equity capital.Â
An individual or corporation that is required to file a B.C. tax return is eligible to claim a VCC or EBC tax credit.Â
An investor cannot receive tax credits if they own, either individually or collectively with associates and affiliates, 50% or more of the votes for the election of directors of the EBC.Â
A corporation cannot register for the IDMTC for a given tax year if it has or is:
- exempt from taxes, or has taxable income exemptions
- a labor-sponsored venture capital corporation
- a registered employee share ownership plan
- a registered employee venture capital corporation
- a registered small business venture capital corporation
- a registered eligible business corporation
- controlled directly or indirectly in any manner by one or more of the above corporations
- claimed a BC SR&ED tax credit for the given tax year
- a personal services business.Â
Interactive Digital Media products are the only products allowed to be claimed under the IDMTC. For the purposes of the IDMTC, it is a product developed in British Columbia, made for use by an individual, the primary purpose of which is to educate, entertain or inform. The product must include a combination of at least two methods of presenting information: text, sound, and images. This may include video games, educational software, edutainment products, simulators such as flight or driving etc.Â
Certain products are specifically excluded as per the IDMTC regulations:
- operating system software
- products designed to be used for interactive communication
- products classified as Adults Only
- products designed for marketing or promoting an entity, product or idea
- products which may be contrary to public policyÂ
Depending on your business size, $1000 to $5000. Requiti Capital provides peace of mind. If we determine that you are eligible for IDMTC, and your claim gets denied, Requiti Capital will pay for your application fee.Â
Marketing, human resource services, administrative support and management support expenditures are not eligible under the program.Â
The B.C. Launch Online Grant Program is funded by the B.C. government and administered by Alacrity Canada. The program has provided $42 Million to help businesses build an online presence and the grant funding is available for at least 5,250 eligible BC-based businesses.Â
Eligible businesses that qualify for this program will receive up to $7500 in funding.Â
Requiti Capital can help you qualify and apply for the Launch Online Grant Program of the B.C. provincial government. Moreover, successful applications are eligible for an added $2000 Requiti Capital Innovation Grant.Â
M&A
In general, Mergers and Acquisitions (M&A) are the processes by which two or more companies combine into one to expand a company’s reach or gain market share to maximize the business potential.Â
Mergers occur when two or more entities join together to create a new organization to have a larger market share and leverage both advantages for further development. In contrast, an acquisition occurs when one company takes over another business and brings it into its operations. And it usually happens between small businesses and medium/large businesses. The objective of the acquisition is also to find a better way for further development.Â
The M&A process varies from case to case. In other words, time can vary substantially according to the type/status of the business, the location of the company, and the objective/complexity of the deal. An estimation could be provided after consultation.Â
As a financial consulting company with solid technical backgrounds, Requiti Capital put clients’ confidentiality first. Therefore, we will start from our service with the non-disclosure agreements and will keep all the materials and documents in a secure data room to ensure safety and confidentiality.Â
As a full-stack financial consulting company, Requiti Capital’s professionals have solid experience and proven success in M&A. Apart from our standard M&A service, we also provide grant consulting, investment service, and other related services to maximize values for our clients.Â
Tech Consulting
Companies are always searching for new technologies to support and improve their businesses. And you may need professional suggestions for choosing a new platform, switching some traditional businesses to online businesses, or exploring new technical solutions. That’s tech consulting focusing on.Â
Requiti Capital can help pivot to new technologies while minimizing the negative impact on your business. We guide you through the journey of change and work out a roadmap covering your workforce and processes.Â
Get Requiti Capital working for you
Our team is ready to show how we can help your business get the tax credits it deserves.
