Both with significant changes of interest to technology business
> Higher cash refunds as Provinces match increase in federal SR&ED expenditure limits
> Multi-Media and e-business get increased tax credits
> Ontario Tax Holiday for companies that commercialize University R&D
Cuts to Canada's federal SR&ED tax credits make provincial credits more vital than ever
In Canada, R&D tax credits are offered by both federal and provincial governments. However, it's all too easy to lose sight of what comes from where.
President Obama introduced several new tax increases and incentives in a 2011 budget proposal that includes over a trillion dollars in tax changes. Most of the tax proposals are unchanged from those in last year’s budget proposal, but several important provisions were added that involve international taxes, worker classification, job creation and energy incentives.
CBIZ Manufacturing & Distribution Quarterly Newsletter – June 2021CBIZ, Inc.
This issue newsletter tackles two of the hottest topics for the Manufacturing & Distribution sectors – supply chain challenges and the newly supercharged employee retention tax credit (ERTC). The article on innovations in employee benefits informs another critical operational issue – that of staffing – as employee benefits are key to recruiting and retaining qualified employees. Articles on managing insurance costs (and links to a pre-renewal data checklist) and how to work with the U.S. Commercial Service to access global markets round out this packed issue. As an added bonus, News from the NAM provides cutting edge industry commentary.
Supply Chain Challenges Become Full Blown RisksCBIZ, Inc.
Companies are coming to grips with the fact that supply chain disruptions have become and may remain a consistent feature of doing business in the manufacturing and distribution sectors. Whereas risk mitigation strategies are often tightly tied to insurance and liability policies, managing supply chain risk must be a key organizational function requiring personnel, policies and preparation. Read more.
This document brings together a set of latest data points and publicly available information relevant for Technology Industry. We are very excited to share this content and believe that readers will benefit from this periodic publication immensely.
Cuts to Canada's federal SR&ED tax credits make provincial credits more vital than ever
In Canada, R&D tax credits are offered by both federal and provincial governments. However, it's all too easy to lose sight of what comes from where.
President Obama introduced several new tax increases and incentives in a 2011 budget proposal that includes over a trillion dollars in tax changes. Most of the tax proposals are unchanged from those in last year’s budget proposal, but several important provisions were added that involve international taxes, worker classification, job creation and energy incentives.
CBIZ Manufacturing & Distribution Quarterly Newsletter – June 2021CBIZ, Inc.
This issue newsletter tackles two of the hottest topics for the Manufacturing & Distribution sectors – supply chain challenges and the newly supercharged employee retention tax credit (ERTC). The article on innovations in employee benefits informs another critical operational issue – that of staffing – as employee benefits are key to recruiting and retaining qualified employees. Articles on managing insurance costs (and links to a pre-renewal data checklist) and how to work with the U.S. Commercial Service to access global markets round out this packed issue. As an added bonus, News from the NAM provides cutting edge industry commentary.
Supply Chain Challenges Become Full Blown RisksCBIZ, Inc.
Companies are coming to grips with the fact that supply chain disruptions have become and may remain a consistent feature of doing business in the manufacturing and distribution sectors. Whereas risk mitigation strategies are often tightly tied to insurance and liability policies, managing supply chain risk must be a key organizational function requiring personnel, policies and preparation. Read more.
This document brings together a set of latest data points and publicly available information relevant for Technology Industry. We are very excited to share this content and believe that readers will benefit from this periodic publication immensely.
As a lobbyist at the European Parliament at the ITRE committee I contribute with draft proposals.
Abstract: A corner stone of the incomes in research intensive companies rely on IP rights for products and services.
By creating conditions in the EU zone for these companies to get their products and services on the market
faster their customers can benefit from them sooner than in other parts of the world. Therefore, I propose a
designated tax that will give financial conditions to speed up the processing of IP applications and to resolve
IP disputes faster.
Analytical paper on the economic scale and growth of the collaborative econom...PwC España
Cinco negocios que prometen multiplicarse por 20 en Europa: Las finanzas colaborativas, el alojamiento compartido, el transporte compartido, los servicios profesionales bajo demanda y los servicios para el hogar bajo demanda. Estos cinco sectores, que se basan en plataformas online y que podríamos considerar son el núcleo duro de la economía colaborativa, generan actualmente unas transacciones por valor de 28.000 millones de euros anuales, pero según el informe elaborado por PwC en 2025 alcanzarán los 570.000 millones de euros, es decir, veinte veces más.
This document brings together a set
of latest data points and publicly
available information relevant for
Hybrid Cloud Infrastructure Industry. We are very excited to share
this content and believe that readers
will benefit from this periodic
publication immensely.
This document brings together a set of latest data points and publicly available information relevant for Business Services Industry. We are very excited to share this content and believe that readers will benefit immensely from this periodic publication immensely.
This document brings together a set of latest data points and publicly available information relevant for Utilities Industry. We are very excited to share this content and believe that readers will benefit from this periodic publication immensely.
As a lobbyist at the European Parliament at the ITRE committee I contribute with draft proposals.
Abstract: A corner stone of the incomes in research intensive companies rely on IP rights for products and services.
By creating conditions in the EU zone for these companies to get their products and services on the market
faster their customers can benefit from them sooner than in other parts of the world. Therefore, I propose a
designated tax that will give financial conditions to speed up the processing of IP applications and to resolve
IP disputes faster.
Analytical paper on the economic scale and growth of the collaborative econom...PwC España
Cinco negocios que prometen multiplicarse por 20 en Europa: Las finanzas colaborativas, el alojamiento compartido, el transporte compartido, los servicios profesionales bajo demanda y los servicios para el hogar bajo demanda. Estos cinco sectores, que se basan en plataformas online y que podríamos considerar son el núcleo duro de la economía colaborativa, generan actualmente unas transacciones por valor de 28.000 millones de euros anuales, pero según el informe elaborado por PwC en 2025 alcanzarán los 570.000 millones de euros, es decir, veinte veces más.
This document brings together a set
of latest data points and publicly
available information relevant for
Hybrid Cloud Infrastructure Industry. We are very excited to share
this content and believe that readers
will benefit from this periodic
publication immensely.
This document brings together a set of latest data points and publicly available information relevant for Business Services Industry. We are very excited to share this content and believe that readers will benefit immensely from this periodic publication immensely.
This document brings together a set of latest data points and publicly available information relevant for Utilities Industry. We are very excited to share this content and believe that readers will benefit from this periodic publication immensely.
No Strings Attached – 10% Cash Refund Benefit to all Companies
Most Canadian provinces have their own R&D tax credit schemes that augment the federal SR&ED benefit. Despite its booming economy, Alberta has been one of the few Canadian provinces – along with tiny Prince Edward Island – that didn't.
CBIZ Commercial Real Estate Quarterly Newsletter – June 2021CBIZ, Inc.
This issue tackles two of the hottest topics for the CRE sector - what you can do to reduce the cost of property insurance and how to take advantage of the newly supercharged employee retention tax credit. Rounding out the issue is coverage of Biden’s tax plan and short takes on Q1 and Q2 CRE sector news. As an added bonus, links are provided to COVID-19 resources, on-demand webinars and additional content & business aids. Learn more.
Substantial changes to SR&ED tax credits on the horizon . . . . . .
(17-Oct-2011) A six-member panel, appointed by the Canadian Federal Government, released its report on the efficacy of various economic-stimulus programs intended to increase private sector R&D and technological innovation.
In Canada, tax is paid at both federal and provincial (i.e. state) levels of government.
Both the federal government and most provincial governments provide funding for scientific and technological R&D through a system of tax credits.
The official title of this system of R&D tax credits is the Scientific Research & Experimental Development tax credit abbreviated SR&ED.
The SR&ED program is administrated by the Canada Revenue Agency abbreviated CRA.
All taxpayers anywhere in Canada are eligible to receive R&D tax credits at the federal level. Eligibility for R&D tax credits at the provincial level is predicated on two considerations; First the province must have an R&D credit and second, you must be a taxpayer in that province.
In addition to being done by a Canadian taxpayer, the R&D work must be done in Canada.
Ontario and U.S. Programs offer different approaches to help fund innovation in medical technology
In this bulletin, we highlight two new government funding incentive programs for private
companies in the biotech / medical-device sectors.
This document brings together a set
of latest data points and publicly
available information relevant for
Hybrid Cloud Infrastructure
Technology. We are very excited to
share this content and believe that
readers will benefit from this
periodic publication immensely.
The presentation touches on various tax refund programs and grants for companies dealing with technology: SR&ED, OIDMTC, IRAP, Youth IRAP, SBIP and others.
Business Predictions for The Autumn Budget 2021The IMCs Ltd
The second Budget in will be announced alongside a spending review on October 27. With the UK still recovering, what could be in this announcement for small businesses? The government will be looking at where to spend and invest – and also where to plug its financial gaps. The Chancellor has already announced a £500 million Plan for Jobs extension to help people back into work.
Impact on TMT industry from Union Budget 2020aakash malhotra
The budget inter-alia aims to focus on three important aspects: ease of living, ease of doing business, and ease of transactions. Several policy measures are proposed for harnessing the potential of disruptive technologies such as Artificial intelligence, Internet of things (IOT), 3D printing, drones, etc. See More https://www2.deloitte.com/in/en/pages/pages/tax/articles/in-tmt-budget-expectations-noexp.html
Our team of R&D tax credit specialists has developed a comprehensive guide that serves as a vital resource for businesses aiming to capitalise on the potential of research and development tax relief. By delving into the intricacies of these credits, the guide offers valuable insights to diverse audiences, including entrepreneurs, business leaders, and decision makers. The eBook covers essential aspects such as eligibility criteria, qualifying R&D activities and costs, navigating the claim process, and more. It unravels complex tax incentives and empowers you with actionable insights to make well-informed decisions regarding your R&D tax claims.
Filing requirements bolstered, loopholes closed
On September 16, 2016 the Canadian Department of Finance released a package of draft technical amendments to the Income Tax Act (ITA).
Included in the 33 pages of technical changes are four amendments to existing legislation governing SR&ED tax deductions and credits.
Software developer had contract for health records system in Belize
The Tax Court of Canada has awarded generous (95%) legal costs to a software developer who successfully appealed a denied SR&ED claim to the Tax Court of Canada and subsequently filed a motion to the court for increased costs. Such cost awards are often less than 50%; awards in the range of 80% are seen if there have been settlement offers; 95% is almost unheard of.
In Canada R&D tax credits are provided at both the federal and provincial (state) levels.
Today the Canadian province of Ontario tabled its 2016 – 2017 budget which included cuts in two of the province’s three R&D tax credits...
If CRA has entirely or partially denied your SR&ED claim, there are two steps you can take to have their decision reviewed and potentially overturned. These two steps are the same whether the issue is "technical" or "expenditure" related, i.e. CRA has ruled that an R&D activity does not qualify as SR&ED, or that an amount claimed in respect of such activity does not attract an SR&ED benefit.
Latest ruling could curtail oral testimony as alternative to documentation...
On June 8, 2015, Justice Randall S. Bocock of the Tax Court of Canada in Edmonton upheld CRA assessments whereby software as service provider Highweb & Page Group Inc. was denied SR&ED ITCs on R&D expenditures of $25K in TY2007 and $38K in TY2008.
Court seeks impartiality of CRA staff who act as expert witnesses
In January 2015 the Tax Court of Canada in Ottawa began to hear an appeal by HLP Solutions Inc. concerning CRA’s denial of SR&ED ITCs on two software development projects.
Bad News for SR&ED Claimers with Government Loans
In November 2014 Immunovaccine Technologies Inc. made application to the Supreme Court of Canada for leave to appeal decisions against it by the Tax Court of Canada and the Federal Court of Appeal...
Taxpayer win highlights value of expert testimony on technological advancement and uncertainty …
A new ruling by the Tax Court of Canada shows that with the aid of properly presented evidence on facts, taxpayers can win back SR&ED claims that CRA has rejected on scientific grounds.
New Minimum Claim Threshold | Accelerated Benefits Eliminated on Some Transaction Types
In Canada R&D tax credits are provided at both the national (Canada) level and by the individual provinces (states).
SR&ED-Related Notice of Objection Filings Increased by Factor of 25 Since 2007
Government statistics obtained by Scitax via Canada’s “Access to Information” process indicate that the number of Notice of Objection filings taxpayers made to the Canada Revenue Agency on SR&ED tax credits has skyrocketed over the last seven years.
As a result of changes to the Income Tax Act and Tax Court Canada Act being introduced through the 2013 federal budget process, the limit on tax court appeals of income tax matters made under the informal procedure will shortly increase from $12,000 to $25,000.
The SR&ED units located in Toronto West (Mississauga) and Hamilton will be amalgamated and both will report to an Assistant Director located in Hamilton, who will in turn report to the Director of the Hamilton TSO.
Cuts to SR&ED program less than expected . . . . .
Canada’s 2012 Federal budget tabled on March 29th 2012 proposes the following changes to Canada’s SR&ED tax credit program.
The Mowat Institute at the University of Toronto’s School of Public Policy has issued a new economic policy report entitled Canada’s Innovation Underperformance: Whose Policy Problem Is It? authored by Tijs Creutzberg.
Deadline 18-Feb-2011
Back in October 2010 the Canadian Federal Government announced the formation of an “Expert Panel” headed by Open Text Chairman Tom Jenkins. Deadline for industry input to this panel is 18-Feb-2011
> 2009 Ontario Budget Delivers a Substantial Increase
> Maximum Benefit Rate Increased to 40%
> Good News for Game Developers, Electronic Publishers and Makers of PDA Software
In the US …
> US federal R&E credit lapses again – will it be renewed?
> Presidential candidates acknowledge need for a better federal-level program
> California, Wisconsin and Indiana increase their state-level tax credits
In Canada …
> Ottawa hints at “SR&ED Overhaul” in 2008 budget
Unveiling the Secrets How Does Generative AI Work.pdfSam H
At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
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The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
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It is a sample of an interview for a business english class for pre-intermediate and intermediate english students with emphasis on the speking ability.
What is the TDS Return Filing Due Date for FY 2024-25.pdfseoforlegalpillers
It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
Digital Transformation and IT Strategy Toolkit and TemplatesAurelien Domont, MBA
This Digital Transformation and IT Strategy Toolkit was created by ex-McKinsey, Deloitte and BCG Management Consultants, after more than 5,000 hours of work. It is considered the world's best & most comprehensive Digital Transformation and IT Strategy Toolkit. It includes all the Frameworks, Best Practices & Templates required to successfully undertake the Digital Transformation of your organization and define a robust IT Strategy.
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Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
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Bulletin #35 - R&D Features in 2008 Quebec and Ontario Budgets
1. Scitax Advisory Partners LP
TM
R&D Features in 2008 Quebec
and Ontario Budgets
Both with significant changes of interest to technology business
> Higher cash refunds as Provinces match increase in federal SR&ED expenditure limits
> Multi-Media and e-business get increased tax credits
> Ontario Tax Holiday for companies that commercialize University R&D
Ontario and Quebec tabled their 2008 budgets in March. Both offered up important tax credit
benefits for technology business. While only Ontario – with its “Tax Holiday” concept - had
something truly new, there were significant “tweaks” to boost existing tax credit benefits.
While at first glance some of these changes may appear minor, both Ontario and Quebec have
tabled measures that could well boost your next provincial SR&ED refund cheque by as much
as $100K. This is particularly significant because many small- and medium-sized companies
that are non-CCPCs; and hence not eligible for a federal refund; can still receive a cash refund
from their province. Furthermore, companies that pay for R&D done in Quebec, may qualify for
a refundable benefit from that province, even if they do not have a permanent establishment
there.
While these budget speeches represent the intentions of the government at the time presented,
the measures proposed are subject to a parliamentary vote. Generally, this occurs within a few
weeks of the budget speech. This bulletin is reporting on the budget speech.
You will see the term “refundable” used throughout this text. Refundable refers to a benefit
that is paid in cash, i.e. you get a cheque, even if you have no taxable income. This is distinct
from a “deduction” or a “tax credit” which is only useful to the extent that you have taxable
income or taxes payable, against which to apply it. This “refundable” benefit, distinguishes the
Canadian taxation system from those in most other countries. Refundable benefits are an
important source of growth money for early stage companies. We will look at Ontario first, with
Quebec following.
DIRECTORS:
David R. Hearn, Managing Director
Michael C. Cadesky, BSc, MBA, FCA
R&D Tax Credit Specialists, Canada & Abroad
BulletinNUMBER 35 | MARCH 31, 2008
2. PART 1
Ontario
Ontario Innovation Tax Credit (OITC)
OITC is Ontario’s “add-on” to the federal government’s SR&ED tax credit. In almost all cases, an
R&D expenditure that attracts the SR&ED benefit will also automatically attract an additional 10%
OITC benefit. While the OITC pays a lower rate than the federal SR&ED, its benefits are refundable
to a far broader range of companies. So while many larger companies cannot monetize their federal
SR&ED benefits and get ITC’s only, they can get up to $200K, soon to be $300K, in cash from
Ontario.
This budget proposes to adjust the OITC rules to maintain alignment with changes implemented in
the 2008 Canadian Federal Budget (see our Bulletin #34 for details). Essentially this means
increasing the maximum amount of cash refund a company can get by increasing the maximum
amount that can be claimed. This will be done by increasing the expenditure limit from the current
$2 million to $3 million and thus increasing the maximum OITC benefit from $200K to $300K.
Furthermore, the expenditure limit discussed above is reduced, “ground down”, as a function of
the taxable income in the prior fiscal year. This means that the maximum OITC is subjected to a
graduated phase-out where taxable income exceeds $400,000 and is fully eliminated at $600,000
of taxable income. The budget proposes to increase the upper threshold to $700,000 of taxable
income. It is intended that the effective date of these changes parallel that of the Federal
amendments, which are proposed to come into effect for taxation years ending on or after February
26, 2008 with pro-rations for taxation years that straddle that date.
Ontario Interactive Digital Media Tax Credit (OIDMTC)
The OIDMTC tax credit applies to companies producing interactive multi-media products such as
computer games or information kiosks. It generally applies to expenditures incurred in the creation
of multi-media content; (i.e. art costs) which are not SR&ED eligible, versus development of
foundation technology (i.e. computer science, software engineering) which are more typically
covered by SR&ED.
The OIDMTC credit has three “categories” of benefit:
> 30% of qualifying expenditures for smaller corporations that develop their own eligible multi-
media products and market them to end users either directly or through retail distribution.
> 20% of qualifying expenditures for corporations as above, but that is too large to qualify for the
30% category.
> 20% of qualifying expenditures for smaller corporations who develop complete multi-media
works for others on a fee-for-service basis.
“Qualifying expenditures” are T4 paid labour (100% eligible), sub-contracted labour (50% eligible)
and up to $100K marketing costs. Presently, eligible labour expenditures must be incurred within a
two-year period ending with completion of product development. The Budget proposes to extend
NUMBER 35 | MARCH 31, 2008 SCITAX BULLETIN | PAGE 2
3. this to a three-year period for products completed after March 25, 2008. The 30% rate for smaller
corporations was to end on December 31, 2009. The Budget proposes to extend the smaller
corporation 30% rate to qualifying expenditures incurred before January 1, 2012. For larger
corporations, the credit rate will be increased to 25% for fee-for-service work qualifying
expenditures incurred after March 25, 2008 and before January 1, 2012.
Ontario Tax Exemption for Commercialization (OTEC)
Ontario has a lengthy legacy of highly targeted, specialized tax credit programs. Many of these have
been aimed at fostering increased cooperation between universities and private industry. The Ontario
Business-Research Institute Tax Credit (OBRI) – first introduced in 1999 – is a good example.
This Budget has introduced another highly novel incentive for private industry to work with univer-
sities and other public research institutes: the Ontario Tax Exemption for Commercialization (OTEC).
Under OTEC, any new company formed between March 24, 2008 and March 25, 2012 to
commercialize the results of research done at qualifying Canadian universities, colleges or research
institutes, would be exempt from paying Ontario Corporate Income Tax and Corporate Minimum Tax
for its first ten taxation years. To qualify for OTEC, the corporation must be incorporated in Canada
and derive all or substantially all of its income from eligible commercialization activities carried on in
Ontario.
These “eligible commercialization activities” would encompass the development of prototypes and
the marketing and manufacturing of products related to the intellectual property.
The exemption would generally apply to corporations that commercialize intellectual property in
priority areas such as, but not limited to, bio-economy/clean technologies, advanced health
technologies, and telecommunications, computer and digital technologies.
The one caveat here is that forming a “new” company may not be as straight forward as it seems.
Although the legislative definitions and regulations are not yet fully formed, extrapolating from
definitions and principles in other areas of taxation, suggest that it would require new and unrelated
shareholders. This could pose a significant practical barrier for a private corporation that is already
in some aligned business e.g. a biotech company seeking to commercialize a gene –based
diagnostic.
Another uncertainty is the relationship; if any; between OTEC, OBRI, OITC and SR&ED. In theory all
of these could be combined; i.e. “stacked-up”; to substantially reduce the tax burden of a new
company purposefully established to undertake commercialization of university generated
intellectual property on an ongoing basis. However, in this scenario, would the OTEC and OBRI act
to reduce the federal SR&ED, as would OITC?
If correctly administered OTEC might well prompt the release of some interesting intellectual
property not only from universities but also from places like the National Research Council.
NUMBER 35 | MARCH 31, 2008 SCITAX BULLETIN | PAGE 3
4. NUMBER 35 | MARCH 31, 2008 SCITAX BULLETIN | PAGE 4
PART 2
Quebec
Quebec R&D Wage Tax Credit (QRDWTC) – Increased Expenditure Limit
Quebec has two “add-ons” to the federal government’s SR&ED tax credit. One is the Quebec R&D
Wage Tax Credit -- which applies to T4 wages paid by Canadian companies to R&D performing workers
in Quebec. The other is the Quebec Credit for ContractPayments – which applies to R&D services
purchased on a sub-contracted basis from certain specified qualifying entities located in Quebec.
The QRDWTC has two rates 37.5% for Canadian Controlled Private Corporations (CCPCs) and 17.5%
for others. At present, eligibility for the 37.5% rate is subject to a ceiling limit of $2 million.
This budget proposes to increase that limit to $3 million which essentially means increasing the
maximum amount of cash refund a company can get under QRDWTC from $750K to $1.125M.
Although not specifically mentioned in Quebec’s budget documents, this measure was most likely
taken to maintain alignment with changes implemented in the 2008 Canadian Federal Budget (see
our Bulletin #34 for details).
Tax Credits for Pre-Competitive R&D Undertaken in Public / Private Partnerships
At present, a refundable tax credit for private partnership pre-competitive research is offered to
partnerships consisting solely of private partners. However, a favourable advance ruling must be
obtained from Revenue Québec before all or part of any expense that would be eligible for this credit
is incurred.
The Budget proposes that businesses in a pre-competitive research partnership in which at
least one of the partner entities is a public organization and the others are private corporations, will
now have access to the 37.5% QRDWTC on wage amounts paid to researchers.
Additional related proposals would further amend existing rules such that: the portion of the
R&D expenditure contributed or borne by the public entity would no longer act to reduce the
tax credit eligible expenditures of the private partners – see details below under the topic R&D
Subcontracted to Universities. In addition, the requirement to obtain a favourable advance ruling
from Revenue Québec would be abolished for purposes of this credit. Instead, taxpayers who claim
this tax credit would be required to attach to their tax returns, the information prescribed by Revenue
Québec; and an eligibility certificate issued by the Quebec Department of Economic Development,
Innovation and Export (MDEIE); which will replace the MDEIE opinion.
This Budget measure is intended to foster pre-competitive R&D partnerships between
private enterprise and public research organizations; e.g. universities, government labs, etc
R&D Subcontracted to Universities and Other Public Institutions
At present, private entities that purchase R&D services from a university or other public research
institute suffer reduced tax credit eligibility on any portion of the total expenditures that is contributed
or borne by the public entity.
5. NUMBER 35 | MARCH 31, 2008 SCITAX BULLETIN | PAGE 5
The Budget proposes to change this such that the expenditure contributed or borne by the
university or other public research institute, does not act to reduce the tax credit eligible
expenditures of the private sector entity. This change will apply to R&D expenditures so incurred
after March 13, 2008.
New Refundable Tax Credit for e-Business
The Budget proposes a temporary new refundable 30% tax credit for eligible corporations that
undertake certain defined “information technology” activities in Quebec.
To be eligible to apply for the credit, the corporation must have a permanent establishment in
Quebec where it carries on a business relating to information technology where at least 75% of its
activities constitute “eligible activities” involving at minimum six full-time employees.
“Eligible activities” are described to include, IT consulting services, the development, integration,
maintenance and evolution of information systems, the design and development of e-commerce
solutions, and the development of security and identification services.
This credit applies to salaries paid from March 14, 2008 to December 31, 2015 and is subject to
maximum cap of $20,000 per full-time employee per year.
Learn More...
> Full text of the 2008 Ontario Budget http://ontariobudget.ca/english/papers_all.html
> Full text of the 2008 Quebec Budget
http://www.budget.finances.gouv.qc.ca/budget/2007-2008/index_en.asp#documents
> Scitax Bulletin #34 SR&ED Features in the 2008 Canadian Federal Budget
http://www.scitax.com/pdf/scitax/bul-034.pdf
> Ontario Interactive Digital Media Tax Credit (Ontario Media Development Corporation)
http://www.omdc.on.ca/PageFactory.aspx?PageID=3640
> Ontario Business-Research Institute Tax Credit
http://www.rev.gov.on.ca/english/bulletins/ct/obitc_frost_0002.html]
For more information on this topic, contact:
David R. Hearn, Managing Director, Scitax Advisory Partners
(416) 350-1214 or dhearn@scitax.com