Corporate Taxation and U.S. Federal Tax Rates

SR&ED Tax Credits¹ – 2018

This document is up to date as of August 31, 2018 and reflects the status of legislation, including proposed amendments at this date.

2018 Eligible Persons Credit Rate Refund Rate2
Federal CCPC 35% of the first $3M3 in eligible expenditures 100 %
15% of excess 40% for eligible corporations4
Other corporations 15% 0%
Individuals 15% 40%
Quebec5 Canadian-controlled corporations
  • 30% of the first $3M in eligible expenditures6
  • 14% of excess
100%
Other corporations and individuals 14% 100%
Ontario7 Corporations
  • 5.5% of the first $1M in eligible expenditures8
  • 3.5% of excess
0%
Corporations 8% to 12%9 of the first $3M10 in eligible expenditures 100%
New Brunswick Corporations 15% 100%

1 Limits and ceilings are based on the preceding year and applicable to the group of associated corporations. Alberta, British Columbia, Manitoba, Newfoundland and Labrador, Nova Scotia, Saskatchewan and Yukon also have SR&ED credits.
2 Unused credits may be carried back three years or forward 20 years.
3 The limit is progressively eliminated when taxable income is between $500,000 and $800,000 or taxable capital used in Canada is between $10M and $50M.
4 0% if taxable income is greater than $500,000 or when the taxable capital used in Canada exceeds $50M (or other conditions).
5 An excluded expenditures threshold varying from $50,000 to $225,000 applies annually, based on total asset value. Other credits offered in Quebec: tax credit for university research or research carried out by a public research centre or a research consortium, tax credit for private partnership pre-competitive research and tax credit for fees and dues paid to a research consortium.
6 The $3M ceiling is reduced by the excluded expenditures threshold. Rate gradually decreases from 30% to 14% when the world assets of the group are between $50M and $75M.
7 Other credit offered in Ontario: the Ontario Business Research Institute Tax Credit.
8 Applicable to eligible expenditures incurred after March 27, 2018. SR&ED expenditures must be greater than 90% of those from the previous year.
9 Rate established based on the corporation’s SR&ED expenditures coefficient compared to its gross revenue (12% rate if the coefficient is 20% or more, progressively reduced to 8% when the coefficient is 10% or less).
10 Ceiling is progressively eliminated when taxable income is between $500,000 and $800,000 or taxable capital used in Canada is between $25M and $50M.

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