[Infographic] About The SR&ED Program - Canada’s most popular R&D funding program

SR&ED PROGRAM About The Scientific Research & Experimental Development (SR&ED) is a Canadian government tax credit program aimed at encouraging SMES, startups, corporations, partnerships and individuals to conduct R&D that leads to new, improved, or technologically advanced products, processes, devices, and materials. SR&ED credits come in the form of refundable and non-refundable tax credits on expenditures for scientific R&D. Wh Can You Recover? Up to 69% of eligible R&D expenses (depending on your province) may be refunded from CRA. Eligible expenditures include salaries, sub-contractor fees and materials. SR&ED TAX CREDITS THE SR&ED PROGRAM AT A GLANCE The SR&ED Program provides more than $3 billion in tax incentives to over 20,000 claimants annually, making it the single largest federal program that supports business R&D in Canada. Yearly 60,000 R&D Projects 20,000 Claimants $3B In tax incentives Estimated returns, How much can you receive? MAXIMUM ELIGIBLE RETURN RATES SALARIES 69% SUB-CONTRACTOR FEES 36% MATERIALS CONSUMED 42% OR TRANSFORMED REFUNDABLE ITC'S Amounts vary from province to province Pre-revenue or not yet profitable business are eligible for refundable tax credits. Case Study Tech firm based 5 Developers Salaries are $85k per year in Waterloo, Ontario and 70% of their time is SR&ED related Total Salaries: = $425,000 ($85k x 5) Estimated Refund Eligible expenses: = $297,500 ($425k x 0.7) $195,000 Your SR&ED claims grow & scale as you do Unlike other government tax programs, you can apply for SR&ED ever year that eligible work took place in. Receive refunds for development costs, allowing you to grow your team & build more products Yearly Tax Returns 1st Year 2nd Year 5th Year 3 Year Total Total Refunds $195,000 $234,000 $653,000 $1,082,000 & Credits Innovation knows no bounds Businesses across many industries qualify for the SR&ED program as the nature of the R&D work you do is more relevant than your business sector when determining eligibility for the program. Examples of eligible industries • Information Technology • Manufacturing & Engineering • Agriculture and Agri-food • Biotech, Life Sciences & Medical Technology • Clean Tech & Sustainable Technologies • Oil & Gas, Energy & Mining • Media & Communication + Other Industries Eligible SR&ED work EXPERIMENTAL RESEARCH Any work that's done to help you develop new products, materials, devices or processes - or improve existing ones - would fall into this category. Approximately 95% of SR&ED claims fall under experimental research. For example if you are working on software development, researching clean tech materials, or experimenting in life sciences you most likely fall into this category of work. BASIC RESEARCH APPLIED RESEARCH Scientific knowledge / advancement without specific practical application. Typically, this kind of work is carried out by universities or research institutes – it gets published in peer-reviewed science journals. Scientific knowledge / advancement with specific practical application. For example, where you're figuring out the properties of semiconductors with a goal to develop a semiconductor amplifier. You're more eligible than you think Did you attempt to overcome scientific or technological uncertainties? Did you go through an iterative procedure to try to solve those problems or uncertainties? Did you achieve a technological advancement or increase technical knowledge? Talk to us! Supporting Innovation Across Canada Since 2006 The SR&ED consultancy firm built by founders, for founders. "The SR&ED program has provided us with an invaluable source of non-debt & non-dilutive capital to support innovation and the growth of our portfolio companies. FLOW VENTURES $250MM +2k The Flow team helped us navigate through complex challenges with ease and their support team was made available to us at an instant." Received for our clients Projects Written 15+ 18+ In house SR&ED Experts Years of SR&ED Writing Experience Marko Jelavic, Principal, Ferst Capital Partners Ready to unlock the resources that you need to innovate & grow? Schedule a free consultation with one of our SR&ED experts today. www.FlowVentures.com Phone. :1 866 322 3569 Email : [email protected]