Tag Archives: r&d tax credits

R&D Tax Credits in Real Estate & Construction

Conducting R&D usually creates an image for most people of scientists conducting experiments in SRED in real estate and construction 2015laboratories.  For the purposes of the Scientific Research & Experimental Development (SR&ED) tax credit, however, this couldn’t be farther from the truth.  It is true that to qualify for R&D tax credits, the R&D work must meet certain standards that show application of the scientific method, yet, the definition is not limited by industry or the type of research or experimentation.

In this article we’ll explore opportunities for Real Estate and Construction companies in Canada to qualify for R&D tax credits which doles out $3 Billion dollars annually.

Real estate companies are often paying for and taking the financial risks associated with engineering work focused on development. As with other industries, it is easy to overlook the validity of this type of R&D and recognize it as eligible for SR&ED or other R&D incentives.

Some specific examples of R&D in the real estate and construction industry include: developing innovative energy solutions, designing and creating structures and building materials to overcome particular challenges.

Looking more closely at these areas of R&D, SR&ED eligible project may include:

  • development or improvement of construction and building materials
  • structural designs related to dynamic structures, for example, retractable roofs, solar energy systems
  • development of construction equipment, tools and temporary construction structures
  • development or improvement of construction techniques – such as in soil remediation or to achieve environmental certification under programs such as LEED

Unlike what often occurs in other industries, such as manufacturing and IT, real estate and construction companies do not conduct their own in-house R&D. An engineering firm, for example that is hired by a real estate company cannot claim SR&ED since they are not taking on financial risk.  The real estate company who hired them, however, can make the claim – if they recognize the opportunity.

Who is Eligible for SRED funding?

Almost any Canadian company can be eligible to apply for Scientific Research and Experimental Development (SRED).  Here are the details of the criteria from a company perspective:

  • Your R & D took place within Canada
  • You have proof of expenditures related to the claimed projects, for example T4s, and/or invoices
  • You have ownership of the Intellectual Property resulting from the project
  • You are in good standing with government financial reporting
  • Your project expenses were incurred within 18 months of the fiscal year-end as of filing

R&D funding support

There is no doubt that Canadian real estate and construction companies are delivering innovation and contributing to the competitiveness and output of the Canadian economy.

All too many real estate and construction companies across Canada are satisfying the requirements of funding programs without realizing they may be eligible to recover up to 65% of their expenses.

Why Choose Enhanced Capital Recovery?

Our team has brought success to various companies, including those whose claims were initially turned away by the Canadian Revenue Agency. To find out how your innovative real estate or construction activities could result in funding, contact Enhanced Capital Recovery today for a no-risk consultation.








 

Research and Development Tax Credits for App Developers

The outbreak of smart phones in the past decade has resulted in the technological convergence that will likely define an era. To compliment this new technology has been the creation of mobile applications, “apps,” that aid and entertain over a billion users around the world.

Canadian app developers are at the forefront of these modern conveniences-turned-essentials, and are already benefiting from Scientific Research and Experiment Development (SR&ED) tax credits. Here is how your business can reap the SR&ED rewards, as well.

Why is app development important to the federal government?

Once considered just a facet of the software and communication industries, app development has blossomed into a sector of its own. Economists project global app sales to eclipse $25 billion this year, nearly $1 billion from Canada’s 50,000-employee app workforce alone.

The federal government is recognizing the impact that app development has on the economy and the potential to attract highly-skilled app creators to Canada. This opportunity to become a leader in the global app marketplace has the Canadian Revenue Agency (CRA) rewarding those contributing to the industry.

How is creating apps considered “research and development?”

The CRA rewards Canadian companies that undertake experiments for the sake of advancing technology—whether or not there is an intended use after the fact.

Software developers do this on a daily basis when trying to create apps that overcome technical barriers. For example, cached turn-by-turn GPS navigation solved drivers’ difficulty of navigating roads outside of cell phone service range.

In addition to creating public direct-to-sales apps for Android, Apple, BlackBerry, and Windows devices, businesses that produce apps for another company’s specific use are also eligible. Perhaps your firm was approached to create an app that allows your client to share inventories through their smart phones.

These examples and others are instances where research and development is used in creating apps. As per general SR&ED criteria, market research, sales promotions, routine testing, and stylistic changes are not eligible for funding.

What expenses can be recovered?

Since all research and experiments must be conducted systematically and not at random, there must be a specific technical barrier in mind prior to developing the app. Once this requirement is satisfied, a variety of expenses can be recovered through the SR&ED program

The CRA funds “wages, materials, machinery, equipment and some overhead.” This means app developers may claim salaries for employees who directly worked on the project, hardware necessary to create the app, and other related fixed costs.

If you are a Canadian app developer—or a business in an unrelated industry that created or improved software to solve a technical uncertainty—contact Enhanced Capital Recovery with SRED consulting offices in Vancouver, Edmonton and Toronto today. Our no-risk consultation will allow you to discover how much SR&ED funding you are eligible to receive!

For a free consultation, complete our contact form, call us at 1-800-470-0235, or email us at info@enhancedcapitalrecovery.com.