The SR&ED Tax Rebate (Scientific Research and Experimental Development) for oil and gas sectors in Canada is evident of the importance of this huge industry to the nation. The Canadian Federal Government wants producers and service providers to benefit from the SR&ED Tax Rebate. Unfortunately, many manufacturers and service providers in the oil and gas industry have been slow and reluctant to submit their claims, though many are likely to meet the eligibility. One major deterrent to the lack of claim submission from this industry is lack of informed decision by the various sectors of the oil and gas industry.
Tax Rebate for oil and gas sectors are NOT applicable to activities involving prospecting and exploring for oil and gas, drilling and production operations. This exclusion would include materials such as minerals, petroleum and natural gas. Based on this definition of allowable activities many oil and gas producers and service providers write off their opportunity to benefit from the SR ED program. It is unfortunate that so many miss the likelihood of recovering a huge portion of their eligible expenses.
By understanding the range of eligible work, you will realize the possibility of Tax Rebates in this industry is vast. The main guiding principle for eligibility is technological development or advancement. If your R&D work involves new or improved technology, then the work fits the eligibility criteria by Canada Revenue Agency (CRA).
SR&ED Tax Rebate Eligibility
In the context of SR&ED program, advancement in technology means the project enables advanced understanding or improvement in technology. In other words, the project or work is able to accomplish performance or functionality which is not available previously. Should the work or project not able to achieve that, it should show or demonstrate uncertainty and/or barriers in technology. This so called “failure” also constitutes advancement in knowledge and technological understanding, and therefore meets the eligibility requirement of a project. Finally, the work or project must be conducted in a systematic fashion with appropriate tracking and record of progress, which clearly documents the scientific research and experimental nature of a project/work.
There exists a wide range of activities which are eligible for the SR&ED Tax Rebate. Perhaps, your work involves producing a new component, software or automation system. Or, your setup has developed an improved hydraulic system, steam generation system or system for carbon recapture. These are examples of eligible activities which qualify you to recover project expenses.
Do not discount or ignore the SR&ED program until you are certain that none of your work or project fits into the technology development umbrella.
It costs you nothing to enquire about eligibility of your projects, because we do not get paid until your SR & ED claim successfully goes through. We strongly suggest to check out Kelid’s interactive Self-Assessment Look Up to determine eligibility of your projects.
If you have any further questions about eligibility and your specific situation, feel free to contact Kelid™ for helpful advice.