CRA Begins Launching SR&ED Pre-Claim Review Pilot

In August 2016, the Canada Revenue Agency (CRA) began to launch the Pre-Claim Review pilot program in order to review and determine whether R&D projects that are in progress qualify for the Scientific Research and Experimental Development (SR&ED) tax credit program.

This follows the cancellation of the similar Pre-Claim Project Review service at the end of June 2016, which had provided preliminary verbal opinions regarding the SR&ED eligibility of the proposed or initiated projects.

The new free review program aims to provide certainty that eligible R&D projects will be accepted as filed while they are still in progress, when it is easier to defend the projects and before the formal claim is prepared at the end of the fiscal year. After acceptance into the pilot program, the CRA would conduct a review to evaluate the SR&ED eligibility of the scientific or technological knowledge base as well as the work being performed.

A limited number of participants will be selected as the pilot program is implemented in August, October, or November, depending on the province or territory—see the table below for more details. There are a few criteria to be met, such as having previously filed for SR&ED while meeting the basic requirements for claiming SR&ED tax incentives.

The launch of the new review service also follows the recent launch of the Pre-Claim Consultation service, which assists potential claimants in determining whether their work is eligible for SR&ED tax credits and what supporting documents they should keep before they submit a claim. These two programs are intended to increase the predictability and consistency of the SR&ED program by the CRA.

Companies that are interested in using these services can submit a completed Pre-Claim Consultation Request Form or Pre-Claim Review Request Form, or get in touch with their local SR&ED contact for more information.

Pre Claim Review Pilot Program Implementation Schedule