Software development is a key industry when it comes to R&D in Canada – in 2008 there were over 55,000 computer systems design and related companies operating in Canada, and that number continues to grow. Between smartphone apps and cloud computing, with infinite applications in every industry, we need to keep ahead. The government is offering a host of incentives to continue to develop the reach of IT in Canada, including a cross-province range of Digital Media Tax Credits. The SR&ED program is no exception. However, it can be difficult determining what software development activities are eligible to be considered “scientific research and experimental development.”
So, as a software company, what do you need to take advantage of the SR&ED tax credit? To determine your eligibility in qualifying for SR&ED refunds from a software or high-tech perspective, consider these questions:
– Do we possess the intellectual property of the developed product? Can we sell the original or a modified version of the software?
– Have we deviated from routine software development to overcome a technological constraint?
– Was the product developed by qualified software engineer(s)/developer(s)?
– Did we do more than just “trial and error”? Did we learn anything new?
If these situations apply to software your company has produced or is currently working on, you could be eligible to receive money back. For more information, or to evaluate the eligibility of your company’s software development product, contact NorthBridge Consultants.