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ARTICLE · 04 MARCH 2025

SR&ED Tax Incentives: What's Changed And What To Know

Gowling WLG
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The Canadian federal tax system provides two incentives for scientific research and experimental development ("SR&ED").

CanadaTax
Xin Jiang
Xin Jiang
Laura Gheorghiu
Laura Gheorghiu
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The Canadian federal tax system provides two incentives for scientific research and experimental development ("SR&ED").

  1. Deduction of SR&ED expenditures: Eligible taxpayers can deduct qualifying expenses in the year in which these expenses are incurred, or to add them to a pool that can be used on a discretionary basis in future years.
  2. Investment tax credit (ITC): Earned on qualifying SR&ED expenditures, with enhanced refundable ITCs available to Canadian-controlled private corporations (CCPCs) that meet certain income and taxable capital criteria.

The Fall Economic Statement 2024 ("FES 2024"), released on December 16, 2024, provided significant updates to the SR&ED regime. This article outlines the key changes.

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