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SR&ED Program benefit
Example
The table below provides an example of the net after-tax cost of a $100 salary expenditure in Quebec directly engaged in R&D. The effects of the ITCs have been shown in the current year's deduction, even though federal ITCs are actually deducted from the R&D pool in the subsequent year.
Small Corporation (CCPC)
Large Corporation
Federal Tax Savings
R&D expenditure
$100.00
$100.00
Provincial ITC
(37.50)
(17.50)
62.50
82.50
Federal ITC
(44.63)
(29.50)
Federal tax deduction
17.88
53.00
Federal taxes saved
$2.34
$11.71
Provincial Tax Savings
R&D expenditures
$100.00
$100.00
Federal ITC
(44.63)
(29.50)
Provincial ITC
-
-
Provincial tax deduction
55.38
70.50
Provincial taxes saved
$4.43
$6.98
Total Tax Savings
Federal tax savings
$46.97
$41.21
Provincial tax savings
41.93
24.48
Total savings
$88.90
$65.69
Net after-tax cost of R&D
$11.10
$34.31