Important reminder for businesses filing SR&ED claims
April 6, 2022
Canada Revenue Agency
The Canada Revenue Agency (CRA) has observed a recent increase in Scientific Research and Experimental Development (SR&ED) claims containing false and/or fraudulent information. While the vast majority of claims filed for SR&ED tax incentives are compliant with filing requirements, the CRA is reminding you to make sure the information provided in your claim, including information submitted on your behalf by a representative, is valid.
What is SR&ED?
The SR&ED Tax Incentive Program is the largest Government of Canada program supporting research and development in Canada, providing more than $3 billion in tax incentives to over 16,000 businesses annually. Depending on the size and type of business, SR&ED tax credits can be used in three ways:
- A non-refundable investment tax credit (ITC) that can be used to reduce taxes owing in the year;
- The remaining portion of a non-refundable ITC (after tax payable is reduced to $0 for the tax year) can be used in any of the three prior years to recover taxes paid, or it can be used to reduce tax owing in the future 20 tax years;
- A refundable ITC that can fund some of the cost of R&D expenditures.
We are here to help you with your SR&ED claim
The CRA is committed to making it easier for eligible businesses to claim SR&ED tax incentives. Whether you are a new or returning claimant, a large or a small business, we can help you determine if your work is eligible. Use our Self-Assessment and Learning Tool to find out, up-front, whether your work is likely to qualify for SR&ED tax credits and to calculate your potential SR&ED claim amount. You can also request a free telephone consultation with a SR&ED specialist if you have questions about whether your work is eligible or how to submit a claim.
Before you submit your claim:
- Review all the information you are sending to the CRA, including information being submitted by a third party representative on your behalf. You are responsible for any mistakes, omissions, or false information in the claim, including information your representative submits.
- Verify that all the required supporting documents are included with your claim.
Submitting false information may have serious consequences
If you apply for the SR&ED Tax Incentive Program using false and/or fraudulent information, you will have to repay the amount to which you were not entitled and you may face serious consequences, including interest and penalties. Third parties who knowingly file false or overstated SR&ED claims on your behalf can have civil penalties imposed on them.
Remember: It's your responsibility to verify the information being submitted on your behalf and to keep documentation to support any claim you make.
If you suspect someone of providing false or fraudulent information to the CRA, you can report it online at canada.ca/taxes-leads or by calling the National Leads Centre at 1-866-809-6841. The CRA will take steps to protect your identity or you can provide information anonymously.
Contact us if you have any questions or need assistance. We are here to help!
Canada Revenue Agency
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