From our friends at The Ingenuity Group: The development of software is the subject of considerable debate at the CRA and, more generally, there is confusion about what does and does not qualify for SR&ED within this area.
When applying for SRED tax credits the applicant must specify a field of science or technology using CRA specific codes. This selection is of utmost importance as it serves to classify the project into the correct area where a “scientific or technoogical advancement” will be claimed. However, there are nuances between areas of specialization that need to be appropriately and accurately delineated to avoid any potential confusion.
What follows is a detailed description of three key software terms and how they are broadly interpreted by the CRA. These particular categories will be defined using standard definitions and then further explained from a CRA lens. (It is assumed that the reader is sufficiently familiar with the process of applying for SR&ED tax credits.
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