SR&ED Investment Tax Credit Policy

In this example the claimant may carry back up to the lesser of:

• $3,000 (the portion of ITC from Year 2 that was not deductible against Part I tax in Year 2)
• $4,000 (Part I tax otherwise payable in year 1 in excess of ITC available in Year 1)

Thus, in this example, the claimant may carry back up to $3,000 from Year 2 to Year 1. The claimant may choose how they utilize the remaining $12,000 of ITC in Year 2 subject to any other applicable rules.

Legislative Reference Income Tax Act
Subsection 127(5) Investment tax credit

2.3.3 Carrying forward and expiry of investment tax credits

An ITC that is not applied, refunded, or carried back may be carried forward and applied to Part I tax otherwise payable in a subsequent year. Legislation applicable to 2008 and later tax years allow the ITC to be carried forward 20 tax years.

Legislative References Income Tax Act

Subsection 127(5) Investment tax credit
Subsection 127(9.01) Transitional application of investment tax credit definition
Subsection 127(9.02) Transitional application of investment tax credit definition
Section 127.1 Refundable investment tax credit
Subsection 127.1(1) Refundable investment tax credit
Subsection 127.1(3) Deemed deduction

3.0 Determining the enhanced rate – 35%

An investment tax credit (ITC) at an enhanced rate of 35% may be earned by Canadian-controlled private corporations (CCPCs) on their qualified SR&ED expenditures incurred in the year up to a maximum threshold of $3 million. This $3 million threshold is called the expenditure limit (see section 3.1). The current year qualified SR&ED expenditures in excess of the expenditure limit for the tax year earn ITC at the basic rate (see section 2.2.1). For more information on qualified SR&ED expenditures refer to the Total Qualified SR&ED Expenditures for Investment Tax Credit Purposes Policy.

Legislative References Income Tax Act
Subsection 127(10.1) Additions to investment tax credit
Subsection 127(10.2) Expenditure limit determined
Subsection 127(10.21) Expenditure limits – associated CCPCs

3.1 Determining the expenditure limit

An enhanced ITC rate of 35% may be earned by CCPCs on their qualified SR&ED expenditures up to their expenditure limit. The expenditure limit may be reduced (phased-out) depending on the amount of taxable capital employed in Canada of the CCPC for the previous tax year. For CCPCs associated with one or more corporations in a tax year, the expenditure limit may be reduced (phased-out) depending on the amount of taxable capital of the CCPC and the associated corporations employed in Canada for the previous calendar year (see section 3.1.1). Short tax years will also have an effect on calculating the expenditure limit (see section 3.1.2). A CCPC and its associated corporations (see section 3.2) must allocate the annual expenditure limit for the purposes of calculating their ITCs earned at the enhanced 35% rate (see section 3.1.3). Associated CCPCs that have multiple tax years in the same calendar year will have an effect on calculating the expenditure limit (see section 3.1.4).

The Income Tax Act provides a formula to determine the expenditure limit. For the expenditure limit formula for a corporation that is not associated with any other corporation, refer to Schedule T2SCH31, Investment Tax Credit – Corporations for the applicable year. For the expenditure limit formula for a corporation that is associated with one or more corporations refer to Schedule T2SCH49, Agreement Among Associated Canadian-Controlled Private Corporations to Allocate the Expenditure Limit for the applicable year.

For tax years ending prior to March 19, 2019, the formula to determine the expenditure limit also includes the taxable income of the previous tax year of the CCPC and where applicable the taxable incomes of the previous tax year of any associated corporations. The taxable income for the previous tax year or for the last tax year in the preceding calendar year is calculated before taking into consideration the specified future tax consequences (see section 3.3) for that previous year.

Legislative References Income Tax Act

Subsection 127(10.2) Expenditure limit determined
Subsection 127(10.21) Expenditure limits – associated CCPCs
Subsection 127(10.3) Associated corporations
Subsection 127(10.4) Failure to file agreement
Subsection 127(10.6) Expenditure limit determination in certain cases

3.1.1 Reductions to the expenditure limit

The expenditure limit begins to decrease when the taxable capital employed in Canada of the CCPC (with no associated corporations) for the previous tax year reaches $10 million and becomes nil starting at $50 million. For CCPCs with associated corporations, the expenditure limit also begins to decrease when the taxable capital employed in Canada of the CCPC and its associated corporations for their last tax years ending in the preceding calendar year reaches $10 million and becomes nil starting at $50 million.

Taxable capital employed in Canada by the corporation has the meaning provided in the Act. For more information on taxable capital refer to Interpretation Bulletin IT-532, Part I.3 – Tax on Large Corporations.

For tax years ending prior to March 19, 2019, the expenditure limit was also reduced by the taxable income of the previous year of the CCPC and where applicable the taxable incomes of the previous year of any associated corporations.

Legislative References Income Tax Act
Subsection 127(10.2) Expenditure limit determined
Subsection 127(10.21) Expenditure limits – associated CCPCs

3.1.2 Effect of short tax years on the expenditure limit

For tax years ending prior to March 19, 2019, when calculating the expenditure limit, if the previous tax year of the CCPC is less than 51 weeks, the taxable incomes must be grossed-up for those tax years by the ratio that 365 is to the number of days in those tax years.

Where the current tax year of a CCPC is less than 51 weeks, the expenditure limit for the tax year-end must be prorated based on the number of days in the tax year divided by 365.

Legislative Reference Income Tax Act
Subsection 127(10.6) Expenditure limit determination in certain cases

3.1.3 Allocation of the expenditure limit for associated Canadian-controlled private corporations

A CCPC and its associated corporations (see section 3.2) must allocate the annual expenditure limit for the purposes of calculating their ITCs earned at the enhanced 35% rate. The portion of the CCPC's expenditure limit that is not allocated to itself may be allocated to an associated corporation to the extent of the associated corporation's expenditure limit determined under the Act (see example below). Thus, the expenditure limit allocated to each particular corporation cannot exceed the expenditure limit determined for the associated group for the applicable tax year.

The expenditure limit otherwise determined is nil in a tax year that a corporation is associated with another corporation unless all of the CCPCs that are associated in the year file an agreement in prescribed form allocating the expenditure limit among themselves.

The expenditure limit for the applicable tax year may be allocated among the associated corporations by filing Schedule T2SCH49, Agreement Among Associated Canadian-Controlled Private Corporations to Allocate the Expenditure Limit. The Act allows the CRA to allocate the expenditure limit among the group of associated CCPCs if the group does not file the agreement allocating the expenditure limit within 30 days of when the CRA requested such information. For more information about the filing requirements refer to the SR&ED Filing Requirements Policy.

Example

Corporations X, Y, and Z are associated and there is no reduction to the expenditure limits due to the previous year's taxable income or taxable capital employed in Canada.

• The tax year-end of corporation X is January 31, 2019, which is a short taxation year. Its individual expenditure limit is $2,000,000.
• The tax year-end of corporation Y is April 30, 2019, and its individual expenditure limit is $3,000,000.
• The tax year-end of corporation Z is December 31, 2019, and its individual expenditure limit is $3,000,000.

If corporation Z allocates $500,000 to itself, the remaining $2,500,000 may be allocated to corporations X and Y. However, the allocation to corporation X cannot be more than its individual expenditure limit of $2,000,000.

Legislative References Income Tax Act
Subsection 127(10.3) Associated corporations
Subsection 127(10.4) Failure to file agreement

3.1.4 Determining the expenditure limit for associated corporations with multiple tax years in a calendar year

Special rules apply for determining the expenditure limit if:

• a CCPC has more than one tax year ending in a calendar year; and
• that CCPC is associated in two or more of those tax years with another CCPC, which has a tax year ending in the same calendar year.

In the foregoing situation, the expenditure limit of the first CCPC for each tax year ending in the calendar year is equal to the expenditure limit for the first tax year. However, if a tax year is less than 51 weeks, the limit is prorated based on the number of days in the year.

Example

Corporations P and Q are CCPCs. The expenditure limit for a CCPC and its associated corporations is $3,000,000 (see section 3.1)

Corporation P has a year-end of June 30. Corporation Q has a year-end of December 31. In 2019, corporation P changes its year-end to December 31. As a result, corporation P has two tax years in 2019: the 12-month period ending June 30, and the 6-month period ending December 31. From then on, the year-end of corporation P is December 31.

The two corporations have been allocated the expenditure limit equally ($1,500,000 to each corporation) for each year. The allocation of the expenditure limit for 2019 is between corporation P for its June 30, 2019 tax year-end and corporation Q for its December 31, 2019 tax year-end. The expenditure limit for corporation P's December 31, 2019 tax year-end is determined as follows:

*Where there are multiple tax years in a calendar year, the Act requires that the expenditure limit for corporation P for the tax year ending December 31, 2019 be equal to its expenditure limit for the tax year ending June 30, 2019 (in this instance, $1,500,000), subject to any proration for a short tax year. Since the tax year ending on December 31, 2019, is less than 51 weeks, the Act requires that the expenditure limit be prorated for the number of days in the year (see section 3.1.2).

Corporation P's expenditure limit for tax year ended December 31, 2019:

$1,500,000 x [184 days (from July 1 to December 31) ÷ 365 days] = $756,164

Legislative References Income Tax Act
Subsection 125(7) Definition of "Canadian-controlled private corporation"
Subsection 127(10.2) Expenditure limit determined
Subsection 127(10.21) Expenditure limits – associated CCPCs
Subsection 127(10.3) Associated corporations
Subsection 127(10.4) Failure to file agreement
Subsection 127(10.6) Expenditure limit determination in certain cases
Section 181.2 Taxable capital employed in Canada
Section 181.3 Taxable capital employed in Canada of financial institution
Section 181.4 Taxable capital employed in Canada of non-resident

3.2 Associated corporations

Determining whether a corporation is associated with another relies on determining the control of the corporation that is exercised directly or indirectly in any manner whatever. For more information on the concept of control refer to Interpretation Bulletin IT-64R4 (Consolidated Archived), Corporations: Association and Control.

For more information on situations where corporations are associated see "When is a corporation associated?" in the Guide T4012, T2 Corporation – Income Tax Guide.

Corporations deemed to be associated
If two otherwise unassociated corporations are associated with the same third corporation, the Act deems the two corporations to be associated with each other. There are exceptions but they only apply for the purposes of the small business deduction.

Two or more corporations are deemed associated with each other if one of the main reasons for the separate existence of those corporations is to reduce the amount of income tax otherwise payable or to increase the amount of refundable ITCs available (see section 4.0).

Corporations deemed not to be associated
As a result of the group of persons definition, CCPCs may be considered to be associated when the same group of otherwise unconnected investors, such as venture capital investors, have invested in each of them. To ensure the receipt of SR&ED tax incentives by small businesses is not hindered in these situations, the Act provides relieving provisions. The provisions deem that corporations will not be associated for the purposes of calculating the expenditure limit and refundable ITC, if the only reason one corporation is associated with another is because two or more investors own shares in each corporation. These relieving provisions are subject to the following conditions:

• the corporations must not be otherwise associated under the Act;
• there is at least one shareholder of one of the corporations who is not a shareholder of the other corporation; and
• the existence of one or more shareholders of one of the corporations who is not a shareholder of the other corporation, is not for the purpose of satisfying these relieving provisions.

This relief for the particular corporations is for SR&ED ITC purposes only and does not extend to shareholding structures intended to multiply the expenditure limit of corporations.

Legislative References Income Tax Act
Subsection 127(10.2) Expenditure limit determined
Subsection 127(10.21) Expenditure limits – associated CCPCs
Subsection 127(10.22) Deemed non-association of corporations
Subsection 127(10.23) Application of subsection 127(10.22)
Subsection 127.1(2.2) Refundable investment tax credit – associated CCPCs
Subsection 127.1(2.3) Application of subsection 127.1(2.2)
Subsection 256(1) Associated corporations
Paragraph 256(1.2)(a) Extended definition of "group of persons"
Subsection 256(2) Corporations associated through a third corporation
Subsection 256(2.1) Anti-avoidance

3.3 Specified future tax consequences

A specified future tax consequence is defined in the Act. The expression means the consequence of a deduction, exclusion, reduction, or adjustment under different provisions of the Act that are specified in the definition itself. The consequence that is relevant for the purposes of calculating taxable income in the case of a and qualifying corporation (see section 4.2) is an amount deducted in the current year in respect of a loss in a subsequent tax year (in other words, a loss carryback).

The consequence of a loss carryback to a particular year is that the taxable income for the year is reduced. 

Legislative References Income Tax Act
Section 111 Losses deductible
Paragraph 161(7)(a) Effect of carryback of loss, etc.
Subsection 248(1) Definition of "specified future tax consequences"

4.0 Refundable investment tax credit

The investment tax credit (ITC) of certain claimants (see section 4.1) that is not applied in the year to Part I tax, or carried back to a previous year and applied to Part I tax in the previous year, may be refundable. In this context, the term refundable goes beyond a reimbursement of Part I tax already paid and refers to the credit that is reimbursed to the claimant.

Any SR&ED ITC that is refunded in the year is deemed to be ITC applied to reduce Part I tax otherwise payable in the year. As a result, SR&ED ITC that is refunded in the year reduces the ITCs available to carry forward or carry back.

Generally, an SR&ED ITC refund may only be claimed in the year for an expenditure incurred that qualifies for an SR&ED ITC. Some circumstances (for example, the rules related to unpaid current expenditures) may deem the expenditure to have been made in a future year. An SR&ED ITC refund cannot be claimed in respect of repayments of assistance or a contract payment.

For more information on unpaid salaries or wages or unpaid amounts refer to the SR&ED Salary or Wages Policy and the Total Qualified SR&ED Expenditures for Investment Tax Credit Purposes Policy, respectively.

Legislative Reference Income Tax Act
Section 127.1 Refundable investment tax credit
Subsection 127.1(2) Definition of "refundable investment tax credit"
Subsection 127.1(2.01) Additions to refundable investment tax credit
Subsection 149(1) Miscellaneous exemptions

4.1 Refundable investment tax credit for various entities

According to the definition of refundable ITC in the Income Tax Act and other supporting provisions, the following types of claimants can earn a refundable ITC. For the definition of qualifying corporation see section 4.2 and for the definition of excluded corporation see section 4.3. The definition of Canadian-controlled private corporation (CCPC) is contained in the glossary. The amount of refundable ITC that can be earned is described below:

1) For a CCPC that is a qualifying corporation (see section 4.2), other than an excluded corporation (see section 4.3), the refundable ITC is:

• 100% of the unclaimed balance of the ITC earned in the year at the enhanced ITC rate of 35% for its qualified SR&ED expenditures of a current nature and its prescribed proxy amount (PPA),
• 40% of the unclaimed balance of the ITC earned in the year at the basic ITC rate of 15%, for its qualified SR&ED expenditures (see section 2.2.1).

2) For a CCPC, other than one that is a qualifying corporation or an excluded corporation, the refundable ITC is:

• 100% of the unclaimed balance of the ITC earned in the year at the enhanced ITC rate of 35% for qualified SR&ED expenditures of a current nature and its PPA

An ITC earned at the basic ITC rate by a CCPC, that is not a qualifying corporation or an excluded corporation, is not refundable.

3) For a CCPC that is a qualifying corporation, but is also an excluded corporation, the refundable ITC is 40% of the unclaimed balance of the ITC earned in the current year for qualified SR&ED expenditures.

4) Generally, for an individual (other than a trust), the refundable ITC is 40% of the unclaimed balance of ITC earned in the current year for qualified SR&ED expenditures.

5) Generally for a trust, each beneficiary of which is either a qualifying corporation or an individual (other than a trust), the refundable ITC is 40% of the unclaimed balance of ITC earned in the current year for qualified SR&ED expenditures.

For more information on refundable ITC for partners of a partnership refer to the SR&ED Claims for Partnerships Policy. For more information on qualified SR&ED expenditures refer to the Total Qualified SR&ED Expenditures for Investment Tax Credit Purposes Policy.

SR&ED claims made by large corporations that earn an ITC at the basic rate (see section 2.2.1) are for the non-refundable ITC. Any corporation that is not a CCPC also falls into this category.

The table in Appendix A contains the refundable ITC rates for various entities.

Legislative References Income Tax Act
Section 127.1 Refundable investment tax credit
Subsection 127.1(2) Definition of "refundable investment tax credit"
Subsection 127.1(2.01) Additions to refundable investment tax credit
Subsection 149(1) Miscellaneous exemptions

4.2 Qualifying corporation

Qualifying corporation is defined in the Act and means:

• a corporation that is a CCPC in a particular tax year, with taxable income in the previous tax year that is not more than the corporation's qualifying income limit (see section 4.2.1) for the particular tax year, or
• a corporation that is a CCPC in a particular tax year and is associated (see section 3.2) with one or more corporations, the total of the taxable incomes of the corporation and the associated corporations for their last tax year ending in the preceding calendar year that is not more than the corporation’s qualifying income limit for the particular tax year.

The taxable income in the previous tax year or in the last tax year ending in the preceding calendar year is calculated before taking into consideration the specified future tax consequences (see section 3.3) for that previous year.

Where a CCPC's qualifying income limit is reduced to zero because the CCPC's taxable capital is $50 million or greater in the immediately preceding year (see section 4.2.1), the CCPC is not a qualifying corporation and would not be entitled to any refundable ITC.

The definition of qualifying corporation relies upon the corporation's qualifying income limit. 

Legislative Reference Income Tax Act
Subsection 127.1(2) Definition of "qualifying corporation"

4.2.1 Qualifying income limit

The qualifying income limit of a corporation for a particular tax year is the amount determined in the Act by the formula:

$500,000 x [($40,000,000 – A) ÷ $40,000,000]

In this formula A is:

• nil if the taxable capital amount* is less than or equal to $10 million; or
• the lesser of $40 million and the amount by which the taxable capital amount exceeds $10 million, in any other case.

*The taxable capital amount is the total of the corporation's taxable capital employed in Canada for its immediately preceding tax year and the taxable capital employed in Canada of all associated corporations (if applicable) for the last tax year ending in the preceding calendar year that ended before the end of the particular tax year of the corporation. Taxable capital employed in Canada by the corporation has the meaning provided in the Act. For more information on taxable capital, refer to Interpretation Bulletin IT-532, Part I.3 – Tax on Large Corporations.

Legislative References Income Tax Act

Subsection 127.1(2) Definition of "qualifying income limit"
Section 181.2 Taxable capital employed in Canada
Section 181.3 Taxable capital employed in Canada of financial institution
Section 181.4 Taxable capital employed in Canada of non-resident

4.3 Excluded corporation

An excluded corporation is defined in the Act. An excluded corporation is a corporation that is, at any time in the year, either controlled by (directly or indirectly, in any manner whatever), or is related to:

• one or more persons exempt from tax under section 149;
• Her Majesty in right of a province, a Canadian municipality or any other public authority; or
• any combination of the above persons.

For more information on the concept of control refer to Interpretation Bulletin IT-64R4 (Consolidated Archived), Corporations: Association and Control. For more information on related persons refer to Income Tax Folio S1-F5-C1, Related persons and dealing at arm's length.

Legislative References Income Tax Act
Subsection 127.1(2) Definition of "excluded corporation"
Subsection 149(1) Miscellaneous exemptions

4.4 Assignment of a refundable SR&ED investment tax credit

The Income Tax Act states that a corporation may assign an amount payable to it under the Act. However, the Act also states that such assignments are not binding on the CRA. Where an assignment has been made, the CRA will continue to issue the refund cheque in the name of the claimant. Under no circumstances will CRA refund cheques be made payable to an assignee.

C/o address option

If the CRA receives a written request, a refund cheque can be sent to a "c/o address" (an address other than the regular mailing address of the claimant). A claimant who wants this service should forward such requests with their T2 return, or directly to their tax centre. The claimant should also clearly state that only this refund cheque is to be sent to the c/o address. Otherwise, the CRA will send all refunds, notices of assessment and any other correspondence to the c/o address.

Legislative References Income Tax Act
Subsection 220(6) Assignment by corporation
Subsection 220(7) Effect of assignment

5.0 Special situations

5.1 Acquisition of control – effect on investment tax credits

If control of a corporation has been acquired by a person or group of persons resulting in a loss restriction event, the availability of the corporation's investment tax credit (ITC) is restricted. When there is an acquisition of control of a corporation there is a deemed year-end.

ITCs earned by a business of a corporation before an acquisition of control may be carried forward to a tax year ending after control was acquired if:

• the ITC is applied to Part I tax on the income for the year where the income is from the same business carried on by the corporation before the acquisition of control; or
• the ITC is applied to Part I tax on the income from any other business of the corporation where substantially all the income of which is from activities (for example, the sale, leasing, rental, or development of properties or the rendering of services) similar to those of the particular business carried on by the corporation before the acquisition of control.

ITCs earned by a business of a corporation after an acquisition of control may be carried back to a tax year ending before control was acquired if:

• the ITC is applied to Part I tax on the income for the year where the income is from the same business carried on by the corporation; or
• the ITC is applied to Part I tax on the income from any other business of the corporation where substantially all the income of which is from activities (for example, the sale, leasing, rental, or development of properties or the rendering of services) similar to those of the business carried on by the corporation.

These rules also apply to trusts.

Legislative References Income Tax Act
Subsection 127(9) Definition of "investment tax credit", paragraph (j)
Subsection 127(9) Definition of "investment tax credit", paragraph (k)
Subsection 127(9.1) Loss restriction event before end of year
Subsection 127(9.2) Loss restriction event after end of year
Subsection 249(4) Year end on acquisition of control
Subsection 251.2(2) Loss restriction event

5.2 Amalgamation and windup – continuation of predecessor corporations

Where there has been an amalgamation of two or more corporations, as defined in the Income Tax Act, for the purposes of calculating the ITC of the newly amalgamated corporation at the end of any particular tax year, the corporation is deemed to be the same corporation as, and a continuation of, any predecessor corporation. This provision allows the amalgamated corporation to claim any carryforward of ITC of the predecessor corporations.

Similarly, when there has been a windup of a taxable Canadian corporation, the Act provides that the parent corporation is deemed, for SR&ED purposes, to be the same corporation as, and a continuation of, its subsidiary. These deeming provisions only apply for the purpose of calculating the parent's ITC at the end of any tax year ending after the subsidiary was wound up. Where a subsidiary is wound up into its parent, the parent cannot claim the subsidiary's ITC carried forward against the Part I tax otherwise payable by the parent for a tax year preceding the year in which the subsidiary was wound up.

Such claims are subject to the time limits described in the definition of ITC (see section 2.1).

For detailed information on amalgamations and windups refer to Income Tax Folio, S4-F7-C1: Amalgamations of Canadian Corporations and Interpretation Bulletin IT-126R2, Meaning of "Winding-up".

Legislative References Income Tax Act
Section 87 Amalgamations
Paragraph 87(2)(j.6) Continuing corporation
Paragraph 87(2)(l) Scientific research and experimental development
Paragraph 87(2)(qq) Continuation of a corporation
Section 88 Winding-up
Paragraph 88(1)(e.2) Winding-up – application of amalgamation provisions
Paragraph 88(1)(e.3) Winding-up – investment tax credit

Appendix A – SR&ED investment tax credit rates and SR&ED investment tax credit refund rates for various entities

Notes

a) Expenditure limit is a maximum threshold of $3 million per year. See sections 3.0 - 3.3.

b) It is possible that all of a CCPC's (other than for a qualifying or excluded corporation) investment tax credits (ITCs) will be earned at the basic rate.

c) Only partners that are qualifying corporations, individuals, and certain trusts may be refunded their allocated ITC at the rate of 40%. The ITC allocated to a member of a partnership that is a corporation, other than a qualifying corporation, cannot be refunded. For more information refer to the SR&ED Claims for Partnerships Policy.

Legislative References Income Tax Act
Subsection 127(9) Definition of "investment tax credit", paragraph (a.1)
Subsection 127(10.1) Additions to investment tax credit
Section 127.1 Refundable investment tax credit
Subsection 127.1(2) Definition of "excluded corporation"
Subsection 127.1(2) Definition of "qualifying corporation"
Subsection 127.1(2) Definition of "refundable investment tax credit"
Subsection 127.1(2.01) Additions to refundable investment tax credit

Appendix B – References

B.1 Legislative references

Appendix C – Revisions

C.1 Explanation of changes

The following are the explanation of changes to the SR&ED Investment Tax Credit Policy as part of the revision of April 28, 2022:

Throughout the document the reference to the basic ITC rate of 20% for tax years ending before 2014, and the reference that for tax years that include January 1, 2014, the reduction in the basic ITC rate is pro-rated based on the number of days in the tax year that are after 2013, have been removed. These were previously found in sections 1.1, 2.1, 2.2.1, 4.0, 4.1, and Appendix A.

Section 2.1 wording under the heading "ITC from a trust" has been revised to include that only graduated rate estates and communal organizations that are deemed to be inter vivos trusts can designate an ITC to their beneficiaries. A previous note at the end of this section has been removed as the 20% ITC no longer applies after 2013.

Section 2.3.3 has been revised to only include discussion on the ITC carry forward of 20 years based on legislation applicable to 2008 and later tax years. The ITC from older years can no longer be claimed.

Section 3.1 has been revised to reflect the legislative changes resulting from the 2019 federal budget enacted measures, specifically the change in the calculation of the expenditure limit. For tax years ending after March 18, 2019, the use of previous year taxable income is removed as a factor.

Section 3.3 now only discusses the effects of the specified future tax consequences on the previous year taxable income, when calculating the qualifying income limit for the purposes of the definition of qualifying corporation.

Section 4.2 has been revised to remove the explanation of what meets the definition of qualifying corporation before February 26, 2008, as this no longer applies.

Section 4.2.1 has been revised to remove the explanation of what is the qualifying income limit for 2009 and previous tax years, as this no longer applies.

Other minor formatting and editing corrections were made throughout the document.