CRA announces changes to SR&ED

Canada Revenue Agency (CRA) has announced several changes to the administration of the Scientific Research & Experimental Development (SR&ED) tax incentive program "to improve the predictability of the outcome of SR&ED claims". The changes were made in response to new measures relating to SR&ED in the 2012 federal Budget (R$, April 17/12).

The CRA will conduct a pilot project to determine the feasibility of a formal pre-approval process (FPAP); enhance its on line eligibility self assessment tool; improve the Notice of Objection process; and work collaboratively with industry representatives to address emerging issues.

The feasibility of the FPAP concept will be tested through a pilot project that will begin this spring, with the objective of developing a service that will "result in faster claim processing as it will eliminate the need for a post-filing, on site review of SR&ED claims".

The decision to work collaboratively with industry doesn't appear to be any different from practices that were established following the 2007 decision to eliminate the SR&ED Partnership Committee, which was comprised of industry representatives who provided advice to ensure that the program operated with consistency and fairness while evolving along with changes in industry (R$, April 10/07).

The CRA says that it is only committed to continuing to meet with industry representatives to discuss and address emerging SR&ED issues by holding forums and "developing stakeholder case studies". The latter will serve as the basis for discussion at a symposium being held by the Association de planification fiscale et financière in Montreal, February 21-22.

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