SRampED Glossário Data: 15 de julho de 2015 O glossário de pesquisa científica e desenvolvimento experimental (SR38ED) é fornecido apenas para fins informativos como uma explicação em linguagem simples de alguns dos termos usados nas páginas, políticas, formulários e guias da SR38ED ao administrar o SR38ED legislação nos termos da Lei do Imposto de Renda federal (ITA) e os regulamentos do imposto de renda. O Glossário SR38ED não substitui a lei, promulgada ou proposta. Para fins de cálculo de despesas qualificadas de SR38ED, os custos de venda ajustados envolvem o rastreamento dos custos incorridos pelas partes que não têm a duração normal (NAL) ao fornecer um imóvel de tal forma que não haverá lucros entre empresas incluídos no custo do imóvel para o artista. O custo para a parte que executa the160SR38ED será o custo incorrido pela parte de 160NAL que adquiriu a propriedade em comprimento de armas. Para fins de cálculo de 160 despesas qualificadas SR38ED. O custo de serviço ajustado envolve o rastreamento dos custos incorridos por partes de 160 membros sem armas (NAL) na prestação de um serviço específico de modo que não haverá lucros entre empresas incluídos no custo do serviço ao artista intérprete ou executante. O custo para a parte que executa o 160SR38ED será o custo incorrido pelo fornecedor do serviço pela parte do NATAL que prestou o serviço específico ao artista intérprete ou executante (o custo incorrido pelo fornecedor do serviço também será ajustado se incluir o custo de um Serviço prestado por uma parte que negoceia a 160NAL com esse fornecedor). Os cheques agrícolas são contribuições feitas para organizações agrícolas que financiam SR38ED. A Agência de Receita do Canadá (ARC) permite que os produtores agrícolas ganhem créditos fiscais de investimento (ITCs) sobre as contribuições feitas às organizações agrícolas que financiam SR38ED. Para os produtores receberem a ITC 160 sob a ITA. A organização agrícola pode agir como agente para os produtores em matérias relacionadas com a SR38ED. Com efeito, todas as transacções efectuadas pelas organizações agrícolas constituirão uma transacção efectuada pelos produtores. Todos ou substancialmente todos (ASA) significa 90 ou mais. Análise é o exame detalhado de informações para diferenciar as várias partes de um todo, determinar seus atributos ou explicar suas relações. É realizada com base no conhecimento e experiência disponíveis e envolve o uso de ferramentas como modelos, gráficos, estatísticas, tabelas, diagramas, fórmulas matemáticas e programas de computador para expressar esse conhecimento ou experiência. A análise é parte integrante da investigação ou busca sistemática e pode ser usada para gerar ou testar uma hipótese. Nota O seguinte160 é a explicação de alterações a este termo a partir de 24 de abril de 2015. investigação sistemática ou pesquisa substituído método científico como o último não é mais usado na política. A pesquisa aplicada é um trabalho realizado para o avanço do conhecimento científico com uma aplicação prática específica à vista. Comprimento de braços refere-se a uma situação em que duas partes que lidam entre si não estão relacionadas entre si e não existe controle entre elas. É uma questão de fato se duas partes não relacionadas entre si estão lidando umas com as outras. De um modo geral, considera-se que um activo fica disponível para utilização e é elegível para subsídio de custo de capital e crédito fiscal de investimento (ITC): o momento em que o imóvel é utilizado pela primeira vez pelo requerente com o objectivo de obter rendimentos ou o tempo A propriedade é entregue ou é disponibilizada ao requerente e é capaz de produzir um produto comercializável ou de executar um serviço comercialmente vendável. A pesquisa básica é trabalho realizado para o avanço do conhecimento científico sem uma aplicação prática específica em vista. (15) A taxa básica de um crédito de imposto de investimento SR38ED (ITC) é de 15 para os anos fiscais que terminam após 2013 e 20 para os anos fiscais que terminam Antes de 2014. Para os anos fiscais que incluem 1º de janeiro de 2014, a redução na taxa básica ITC é proporcional com base no número de dias no ano fiscal que são após 2013. Os seguintes tipos de reclamantes irão ganhar ITCs na base Taxa do ITC sobre despesas qualificadas de SR38ED: corporações (exceto certas corporações privadas controladas pelo Canadá (CCPC)) proprietários individuais (indivíduos) sócios de uma parceria beneficiários de trusts. Os testes de site beta são testes ou validação de um produto ou processo em um cliente ou em uma instalação ou ambiente de usuário final. Muitas vezes, a necessidade desse tipo de teste surge quando o produto ou processo que está sendo desenvolvido não pode ser testado isoladamente sem o ambiente de processo completo ou nos casos em que o desenvolvedor não consegue simular o ambiente especializado ou as condições necessárias para avaliar o produto desempenho. Embora o teste de site beta seja um termo comumente usado, dependendo da indústria ou tecnologia envolvida, outros termos podem ser usados para caracterizar o tipo de teste discutido acima. Estes termos incluem, por exemplo, testes de campo, investigação de campo, ensaios de campo, validação, testes externos, testes de consumo, testes in situ, testes de utilização final, verificação final ou testes em órbita ou em missão. O CRA usa o termo beta site testing em um sentido genérico para se referir a todos os termos acima. Para mais informações sobre CCPC e outros tipos de corporações, por favor consulte a seguinte página da CRA, Tipos de corporações. Um preparador de sinistros de uma forma SR38ED significa uma pessoa ou sociedade que concorda em aceitar consideração para preparar ou ajudar na preparação do formulário, mas não inclui um empregado que prepara ou ajuda na preparação do formulário no curso Desempenhar as suas funções. Para este efeito, um formulário SR38ED é um formulário prescrito que deve ser apresentado nos termos da subsecção 37 (11) da Lei do Imposto sobre o Rendimento. Que é o Formulário T661 Investigação Científica e Desenvolvimento Experimental (SR38ED) Despesas Reclamação. No contexto do SR38ED. O trabalho correspondente às necessidades deve corresponder ao montante, à dimensão, à extensão ou à duração necessários para a realização da investigação fundamental. pesquisa aplicada. Ou desenvolvimento experimental. Um ativo comercial é um ativo que é desenvolvido com a finalidade de ser usado dentro do próprio negócio da empresa. É construído para atender os próprios requisitos da empresa. Uma planta comercial é uma instalação de produção utilizada para fins comerciais (ou outros não-SR38ED). Embora as plantas novas podem às vezes ser construídas ou as plantas comerciais existentes podem ser modificadas, para testar e demonstrar processos novos, estas plantas não são geralmente plantas piloto como sua finalidade pretendida e uso real é comercial. Produção comercial é trabalho associado com a produção de materiais, dispositivos e produtos, destinados à venda ou operações comerciais. Espera-se que um lucro será feito. A definição de SR38ED afirma que o trabalho com relação à produção comercial de um material, dispositivo ou produto novo ou melhorado ou o uso comercial de um processo novo ou melhorado não está incluído no significado de SR38ED. A programação de computadores está preparando e codificando instruções de operação para um computador. O contexto do ciclo de produção refere-se às circunstâncias em que a produção é executada. Quando o trabalho de desenvolvimento experimental é executado durante um ciclo de produção, o contexto desse ciclo de produção deve ser estabelecido, uma vez que as despesas de SR38ED permitidas variam dependendo desse contexto. Em outras palavras, as circunstâncias que cercam aquele ciclo de produção determinarão como as despesas serão tratadas. Quando o trabalho de desenvolvimento experimental é executado durante um ciclo de produção, o contexto do ciclo de produção pode ser EDEP ou EDCP. Um pagamento por contrato é: um montante pago ou a pagar a um requerente por um fornecedor sujeito a imposto relativamente ao montante para SR38ED. Para, ou em nome de. Uma pessoa ou sociedade com direito a uma dedução do montante como uma despesa corrente ou como um pagamento de terceiros a uma sociedade e num momento em que o requerente e a pessoa ou sociedade (o fornecedor sujeito passivo) Para uma despesa de natureza corrente (que não seja um montante prescrito) pagável por um governo canadense, município ou outra autoridade pública canadense ou por uma pessoa isenta de imposto de Parte I, para que SR38ED seja realizado para ele ou em seu nome. Um produto personalizado é um ativo que é desenvolvido com a finalidade de ser posteriormente vendido. Ele é construído para atender às especificações do cliente ou requisitos técnicos orientados pelo mercado. A coleta de dados é a coleta de informações usando procedimentos ou protocolos pré-determinados. O termo coleta de dados de rotina refere-se à coleta de dados que é realizada para suportar operações comerciais normais, e é excluída do trabalho SRampED. Apenas o trabalho de coleta de dados que é proporcional às necessidades e diretamente em apoio à pesquisa básica. Investigação aplicada ou desenvolvimento experimental. Propriedade depreciável é qualquer propriedade para a qual o requerente seria autorizado a pedir subsídio de custo de capital. Design é trabalho para transformar conceitos e idéias em um plano. Uma despesa de natureza corrente é diretamente atribuível ao processo da SRampED se for: o custo dos materiais consumidos ou transformados em tal processo (por favor, consulte a Política de Materiais para SRampED ) Para um funcionário que diretamente se compromete, supervisiona ou apóia a acusação de SRampED que seria, a parte dos salários ou salários incorridos, na medida em que o montante razoavelmente pode ser considerado em relação a tal acusação (por favor consulte o SRampED salário ou salários Política) e para outras despesas que são, uma despesa ou parcela de uma despesa, que está diretamente relacionada ao processo da SRampED e que não teria sido incorrido se tal processo não tivesse ocorrido. Para obter mais informações sobre outras despesas (consulte a Política de Gastos Gerais e Outros Gastos da SRampED). Diretamente atribuível à provisão de instalações, instalações ou equipamentos para o prosseguimento de infra-estruturas, instalações ou equipamentos para o prosseguimento de infra-estruturas, Prosseguimento do SRampED no Canadá: o custo da manutenção e manutenção de tais instalações, instalações ou equipamentos e outras despesas, ou partes de outras despesas, que estejam diretamente relacionados a essa provisão e que não teriam sido incorridos se essas instalações ou instalações Ou que o equipamento não tinha existido (incremental). Directamente engajado em SRampED 160 Exerce diretamente da atividade de RSampDE diretamente envolvido em SRampED refere-se a mãos no trabalho. Se um funcionário está diretamente envolvido no SRampED é baseado nas tarefas que são executadas e não no cargo do funcionário. Para obter uma lista de tarefas a serem consideradas diretamente envolvidas, consulte a Tabela 3 na T4088, Guia do Formulário T661 Pesquisa Científica e Desenvolvimento Experimental (SRampED) Demanda de Despesas. Para obter mais informações, consulte a seção 7.1 da Política de Salários ou Salários da SRampED. No contexto do SRampED. Trabalho que está diretamente em apoio é o trabalho que foi realizado especificamente para realizar a pesquisa básica relacionada. Pesquisa aplicada ou desenvolvimento experimental. Diretamente relacionado com a acusação de SRampED no Canadá, de acordo com o método tradicional. Uma despesa ou uma parcela da despesa, deve ser primeiramente uma despesa diretamente relacionada ao prosecution de SRampED em Canadá. Para que uma despesa seja considerada directamente relacionada com a acusação da SRampED. A despesa deve conectar-se com (ou seja, ser relacionado a) o trabalho SRampED, o pessoal SRampED, ou o equipamento de máquinas usado pelo pessoal para executar SRampED. E não deve haver intermediário entre esses elementos ea despesa (isto é, diretamente). Em outras palavras, deve haver uma ligação direta da despesa a trabalho, pessoal ou equipamento de máquinas específicos. Se uma despesa está diretamente relacionada com a acusação de SRampED é uma questão de fato. Se a despesa está diretamente relacionada com a acusação de SRampED no Canadá e também incremental a tal acusação, pode ser reivindicada como SRampED sobrecarga e outras despesas. EDCP refere-se ao contexto da produção executada quando o trabalho de desenvolvimento experimental é realizado em conjunto ou simultaneamente com a produção comercial. Quando a investigação científica e o desenvolvimento experimental (SR38ED) estão envolvidos numa produção, mas o contexto dessa produção não é EDEP. O contexto da produção deve ser EDCP. Engenharia é a prática de projetar, compor, avaliar, aconselhar, relatar, dirigir ou supervisionar a construção ou fabricação de produtos tangíveis, montagens, sistemas ou processos que exijam conhecimentos aprofundados de ciências da engenharia e as condições adequadas, seguras e econômicas Aplicação de princípios de engenharia. Por definição e de acordo com uma prática profissional sólida, a prática de engenharia não envolve incertezas científicas ou tecnológicas e, portanto, não é elegível por si própria. No entanto, o trabalho de engenharia que é proporcional às necessidades e diretamente em apoio à pesquisa básica. pesquisa aplicada. Ou desenvolvimento experimental é elegível. É importante distinguir entre trabalho com relação à engenharia e o trabalho que os engenheiros realizam. Mesmo que a prática de engenharia não é elegível por conta própria, os engenheiros ainda podem estar realizando pesquisas básicas. pesquisa aplicada. E desenvolvimento experimental. Observação A seguir, estão as explicações de alterações a este termo em 24 de abril de 2015. a engenharia de rotina foi removida, pois não há diferenciação entre engenharia e engenharia de rotina. Um parágrafo foi adicionado para esclarecer que mesmo que a prática da engenharia no seus próprios não é elegível, os coordenadores poderiam ainda realizar a pesquisa básica, a pesquisa aplicada, ou o desenvolvimento experimental. (35) Algumas corporações privadas controladas pelo Canadá (CCPCs) que atendem a certos requisitos podem obter créditos de imposto de investimento na taxa majorada de 35 (20 taxa básica de crédito 15 Melhoria antes de 2014) e (15 taxa básica 20 melhoria após 2013). Esta taxa melhorada pode ser obtida em suas despesas SR38ED qualificados até um limite máximo de 3 milhões. As despesas SR38ED qualificadas que ultrapassem o limite de despesas para o ano fiscal ganham ITC à taxa básica. Qualquer produção além do que é exigido para o SR38ED é chamado de produção em excesso. O trabalho identificado nos parágrafos (e) - (k) da definição de SR38ED é tipicamente referido como trabalho excluído e, coletivamente, esses parágrafos são referidos como as exclusões. Este trabalho não é SR38ED. Despesas de natureza de capital são aquelas despesas que resultam na aquisição de propriedade de capital, que é propriedade depreciável ou propriedade que resultaria em um ganho ou perda se dispôs. Os comentários na versão atual do Boletim de Interpretação IT-128R, Propriedade Depreciável do Custo de Capital. Pode ser útil para determinar se uma determinada propriedade é propriedade depreciável. Despesas de natureza corrente feitas antes de 2014 são consideradas como aquelas despesas que não resultam na aquisição de terras, um interesse de arrendamento em terrenos ou bens que de outra forma seriam bens depreciáveis para o contribuinte. Para fins de SR38ED, os gastos de natureza corrente feitos depois de 2013 incluem quaisquer despesas efectuadas pelo requerente que não sejam despesas para: a aquisição de bens de capital do requerente ou a utilização ou o direito de utilização de bens de capital que Ser capital propriedade do requerente se a propriedade de capital era de propriedade do requerente. Uma experiência é o teste de uma hipótese sob condições controladas. O desenvolvimento experimental é um trabalho realizado com a finalidade de alcançar avanço tecnológico com a finalidade de criar novos ou melhorar materiais, dispositivos, produtos ou processos existentes, incluindo melhorias incrementais. Produção experimental é definida como a produção de produção de desenvolvimento experimental que é necessário para verificar se os objetivos do trabalho SR38ED foram cumpridos ou se a160technological avanço é realizável. O objetivo da produção executar. Em que o produto é produção experimental, é avaliar os aspectos técnicos do projeto SR38ED. A data de vencimento da declaração de imposto de renda para um ano fiscal é o dia em que uma declaração de imposto de renda de acordo com a Parte I da ITA deve ser arquivada para o ano ou deveria ser arquivada se o imposto sob a Parte I de A ITA era devida. Para obter mais informações, consulte a seção 5.0 da Política de Requisitos de Arquivamento SR38ED. Para se qualificar como equipamento de uso compartilhado de primeiro termo, uma propriedade deve ser: propriedade depreciável adquirida após 2 de dezembro de 1992 e antes de 1º de janeiro de 2014 equipamentos que não atendem aos critérios da ASA para equipamentos de gastos de capital SR38ED que não prescrevem bens depreciáveis (PDP) que não sejam equipamentos de escritório ou mobiliário de uso geral (GPOEF), equipamento novo (o equipamento não deve ter sido usado ou adquirido para uso ou locação ou para outros fins antes de o requerente adquiriu) Reclamante durante o seu período de funcionamento no período que começa com o momento em que o equipamento foi adquirido e disponível para utilização. E termina no final do primeiro ano fiscal que foi pelo menos 12 meses após o momento em que o equipamento foi adquirido e disponível para uso, e foi usado principalmente para a acusação de SR38ED no Canadá. O equipamento de escritório de finalidade geral do furniture (GPOEF) inclui todos os furniture, tais como mesas, cadeiras, lâmpadas, armários de arquivamento, e bookshelves. Também inclui fotocopiadoras, aparelhos de fax, telefones, pagers e calculadoras. Computadores, incluindo hardware, software e equipamentos auxiliares, não são considerados equipamentos de escritório ou móveis de uso geral. A assistência governamental é definida na ITA como auxílio de um governo, município ou outra autoridade pública, seja como subsídio, subsídio, empréstimo condescendente, dedução de imposto, subsídio de investimento ou qualquer outra forma de assistência que não seja o crédito de imposto de investimento federal ITC). A assistência do governo também inclui assistência fornecida por uma corporação da coroa ou por um governo estrangeiro. As humanidades são ramos do conhecimento que dizem respeito ao ser humano e à sua cultura, ou métodos analíticos e críticos de investigação derivados da apreciação dos valores humanos e da capacidade única do espírito humano de se expressar. Os acadêmicos geralmente classificam o conhecimento em quatro áreas principais: ciências físicas, ciências biológicas (ou ciências naturais), humanidades e ciências sociais, embora outras reconheçam apenas duas categorias: ciências naturais e ciências sociais. Como um grupo de disciplinas educacionais, as humanidades são distintas em conteúdo e método das ciências físicas e biológicas e, um tanto menos decisivamente, das ciências sociais. As humanidades incluem o estudo de todas as línguas e literaturas, das artes, da história e da filosofia. O trabalho com relação à pesquisa em humanidades é especificamente excluído da definição de SR38ED. Uma hipótese é uma idéia, consistente com fatos conhecidos, que serve como ponto de partida para uma investigação mais aprofundada para provar ou refutar essa idéia. Observação A seguir, estão as explicações de alterações neste termo a partir de 24 de abril de 2015. A explicação foi simplificada para melhorar a compreensão e a legibilidade. O parágrafo 37 (1.3) da ITA prevê que os gastos de pesquisa científica e desenvolvimento experimental (SR38ED) que são incorridos, no curso de uma empresa de outra forma realizada por um O contribuinte no Canadá, na zona identificada pela Lei de Oceanos como zona económica exclusiva (ZEE) do Canadá (ou no espaço aéreo acima ou no subsolo ou leito marinho abaixo dessa zona) será considerado como sendo incorrido pelo contribuinte no Canadá. Geralmente, a Lei dos Oceanos prevê que a ZEE do Canadá consiste na área que está a 200 milhas náuticas da costa canadense. Litoral refere-se à linha de águas baixas ao longo das costas do Canadá. Incremental significa que a despesa não teria sido incorrida se SR38ED não tivesse ocorrido. Crédito de imposto de investimento (ITC) Crdit dimpt linvestissement (CII) Pode ser obtido um crédito de imposto de investimento (ITC) relativamente a vários investimentos ou despesas. A definição de ITC dentro da Lei determina a quantidade de ITC que está disponível para um contribuinte no final de um ano fiscal. Existem disposições adicionais na lei que ajustam o montante ITC disponível ao contribuinte no final de um determinado ano fiscal. Salvo indicação em contrário, qualquer referência ao ITC no programa SR38ED é uma referência a um ITC obtido em despesas qualificadas de SR38ED. Crédito de imposto de investimento (ITC) aplicado O crédito de imposto de investimento (ITC) aplicado refere-se a um montante ITC que o contribuinte aplicou contra o imposto da Parte I de outra forma pago. Crédito fiscal de investimento (ITC) reporte refere-se a um montante ITC que o contribuinte obteve num ano fiscal e transportado de volta e aplicado contra a Parte I imposto de outra forma pago em qualquer um dos 3 Anos fiscais anteriores. Crédito fiscal de investimento (ITC) carryforward Crédito fiscal de investimento (ITC) carryforward refere-se a um montante ITC que o contribuinte não tenha aplicado, reembolsado ou transportado que pode ser reportado e aplicado contra a Parte I imposto de outra forma A pagar num ano fiscal subsequente. O período de carry-forward é geralmente de 20 anos fiscais. A ITC expira se não for aplicada para reduzir o imposto da Parte I de outra forma pago dentro do número aplicável de anos fiscais. (CII) As regras de recaptura do ITC reverterão a totalidade ou uma parte do ITC SR38ED obtido adicionando um montante a um imposto sobre os devedores a pagar relativo ao ano em que a venda ou conversão para o crédito comercial O uso de uma propriedade SR38ED ocorre. Para obter mais informações, consulte a Recaptura da Política de Crédito Tributário de Investimento SR38ED. O crédito fiscal ao investimento (ITC) de certos requerentes que não é aplicado contra o imposto da Parte I de outra forma pago, ou transportado de volta para um ano fiscal anterior e aplicado contra o imposto da Parte I de outra forma Pagável no ano fiscal anterior, pode ser reembolsável. Neste contexto, o termo reembolsável vai além de um reembolso do imposto da Parte I já pago e refere-se ao crédito que é reembolsado ao requerente. Os indivíduos-chave são indivíduos que estão diretamente envolvidos no projeto e são essenciais para o progresso do projeto. Estes são indivíduos que terão uma boa compreensão dos aspectos científicos ou tecnológicos do projeto. A pesquisa de mercado é o processo de coleta e análise de informações com a finalidade de comercializar um produto específico, especialmente um produto novo ou proposto. A pesquisa de mercado é uma grande disciplina de marketing cuja função principal é a coleta e análise de informações sobre um determinado mercado, indústria, geografia, grupo de clientes, concorrentes ou área específica de produtos ou serviços. Os principais usos da pesquisa de mercado são: posicionar um negócio ou um programa estratégico para auxiliar no lançamento de novos produtos ou serviços para avaliar os pontos fortes e fracos de um produto ou serviço para ajudar a determinar como melhorar um produto ou serviço para determinar os desejos, Desejos e analisar a concorrência. A pesquisa de mercado inclui trabalhos como: o exame de fatores como hábitos de compra, uso do tempo de lazer, necessidades ou desejos do consumidor e atitudes em relação aos produtos existentes e novos produtos testados no mercado. Aceitação de clientes, recolha e avaliação de dados sobre as preferências dos consumidores em relação a produtos e serviços e estudo das necessidades de mercados específicos, aceitação de produtos e métodos de desenvolvimento e exploração de novos mercados. O trabalho com relação à pesquisa de mercado é especificamente excluído da definição de SRampED. Materiais consumidos na acusação de SRampED basicamente significa que o material foi destruído ou tornado praticamente sem valor como resultado do SRampED. Para obter mais informações, consulte a seção 5.0 da Política de Materiais para SRampED. A interpretação da CRA do termo materiais para SRampED é todas as matérias-primas, substâncias ou outros itens que compõem o corpo de uma coisa em um dado momento no processo SRampED. Para obter mais informações, consulte a política de Materiais para SRampED. Materiais transformados na acusação de SRampED geralmente significa, material para SRampED. Que tenha sido alterado ou incorporado em outro material ou produto como resultado do SRampED eo material ainda tem algum valor para o reclamante ou para outra parte. Para obter mais informações, consulte a seção 6.0 da política de materiais para SRampED. A análise matemática é o exame de um conjunto de observações por meio de ferramentas matemáticas, princípios, métodos ou técnicas. O termo não-braços refere-se a uma situação em que duas partes relacionadas que lidam entre si e uma parte exerce controle sobre a outra. Em outras palavras, as partes não estão trabalhando em conjunto. A assistência não-governamental é uma quantia que é recebida como incentivo, reembolso, reembolso, contribuição, subsídio, subsídio, empréstimo perdoável, dedução de imposto ou qualquer outra forma de assistência. Quando a SRampED realizada no Canadá é realizada em nome de um requerente, isso normalmente se refere a uma situação em que o trabalho SRampED é contratado para outra parte sob circunstâncias em que o requerente (o pagador) normalmente mantém a propriedade do trabalho SRampED realizado. Se o ordenante pediu ao contratante para executar SRampED em nome do pagador nos termos do contrato é um elemento-chave para determinar um montante como sendo um pagamento do contrato. Esta determinação é feita com base nos termos do contrato lido como um todo e revendo todos os fatos que cercam a situação particular. O termo tempo de operação não é definido no ITA, mas, geralmente, o tempo de operação significa o tempo que o equipamento normalmente funciona ou funciona durante o ano fiscal. Para obter mais informações, consulte a seção 4.2 da Política de Despesas de Capital da SRampED. A pesquisa operacional é uma abordagem que envolve o tratamento matemático de um processo, problema ou operação para determinar sua finalidade e eficácia e obter a máxima eficiência. No contexto do Programa SRampED, o termo despesas gerais e outras despesas é freqüentemente usado para se referir a certos gastos de natureza corrente que estão diretamente relacionados ao processo da SRampED no Canadá e que são incrementais. Ou a determinadas despesas que são diretamente atribuíveis à provisão de instalações, instalações ou equipamentos para a acusação de SRampED no Canadá. Uma planta piloto é uma instalação de produção que é desenvolvida para o propósito primário de realizar SR38ED durante sua vida útil. É utilizado exclusivamente para o seu conteúdo técnico ou experimental e não para fins de operações comerciais. Uma planta piloto é uma planta de escala não comercial na qual os passos de processamento são sistematicamente investigados sob condições simulando uma unidade de produção completa. Geralmente, ele é usado para obter dados de engenharia e outros necessários para avaliar hipóteses. Estabelecer especificações técnicas de produto acabado, escrever produtos ou processar fórmulas, ou projetar equipamentos e estruturas especiais que são exigidos por um processo de fabricação novo ou melhorado. Mais especificamente, ao executar SR38ED. As plantas-piloto podem ser usadas para estudar o comportamento de certas matérias-primas, desenvolver um processo de fabricação economicamente viável, modificar equipamentos para novas aplicações, testar equipamentos não comprovados, testar novas condições, produzir amostras para pesquisa ou determinar efeitos ambientais. O termo pool refere-se a um mecanismo fiscal pelo qual um montante (o pool) é calculado pela identificação de adições e reduções do saldo. É possível reunir despesas de natureza corrente (e despesas de natureza de capital incorridas antes de 1º de janeiro de 2014) sobre SR38ED realizadas no Canadá e deduzi-las no cálculo da receita De um negócio que você realizou no ano fiscal que você fez a despesa ou em qualquer ano fiscal posterior. Um saldo negativo geralmente é trazido para a renda, e um saldo positivo (ou parte dele) geralmente pode ser deduzido da renda. Para obter mais informações, consulte a Diretiva de Despesas da SR38ED. Propriedade depreciável prescrita (PDP) Biens amortissables viss par rglement (BAVR) A propriedade depreciável de um requerente que é prescrita para os fins da definição de equipamento de uso compartilhado de primeiro termo é: um prédio do reclamante um interesse de arrendamento do reclamante em Um edifício de um imóvel ou parte de uma propriedade do requerente se, no momento em que a parte foi adquirida pelo requerente, o requerente ou uma pessoa relacionada com o requerente pretendia que a parte seria usada no processo de SR38ED durante a montagem, Construção ou colocação em funcionamento de uma instalação, instalação ou linha para fins comerciais, de transformação comercial ou outros fins comerciais (excepto SR38ED), e destinado a: 13 ser utilizado durante o seu tempo de funcionamento na sua vida útil esperada principalmente para fins diferentes dos SR38ED ou que o seu valor seria consumido principalmente em atividades diferentes de SR38ED. Despesas prescritas na acepção dos Regulamentos não são qualificadas despesas SR38ED e, portanto, não ganham crédito fiscal de investimento (ITC). Informações prescritas são as informações a serem fornecidas em um formulário ou a forma de arquivamento de um formulário, conforme autorizado pelo Ministro da Receita Nacional. Para obter mais informações, consulte a seção 4.0 da Política de Requisitos de Arquivamento SR38ED. Prescribed proxy amount (PPA ) Montant de remplacement vis par rglement (MRVR ) The prescribed proxy amount is a notional amount on which SR38ED ITC can be earned. It is calculated as a percentage of a salary base. The PPA is only applicable when the claimant elects to use the proxy method . The PPA is used in lieu of actual SR38ED overhead and other expenditures when calculating qualified SR38ED expenditures to earn SR38ED ITC. The PPA is not included in the pool of deductible SR38ED expenditures . For SR38ED purposes, the term primarily means more than 50 but less than 90. Generally, production refers to the output from the process as well as the act of operating the process. Production output refers to the output from the process (in other words, the product). In a commercial environment, companies run processes and equipment for certain periods of time in order to achieve specific objectives. This is generally referred to as a production run. For example, a production run could involve the period of time during which a particular grade of material is produced for sale. A production run could also be a period of time during which changes to the process are validated. Prospecting, exploring or drilling for, or producing, minerals, petroleum or natural gas is field work carried out as part of business operations in the oil 38 gas and mining industries. A prototype is an original model on which something new is patterned and of which all things of the same type are representations or copies. It is a basic experimental model that possesses the essential characteristics of the intended product. A prototype is normally understood to be a trial model or preliminary version. It is developed to test the feasibility of a concept or hypothesis within a systematic investigation or search and generally has no lasting value. The proxy method is an alternative method to the traditional method in computing SR38ED expenditures. Specifically, the proxy method involves calculating a notional amount for SR38ED overhead and other expenditures called the prescribed proxy amount (PPA ) . Psychological research is research into the functions of the mind and the behaviour of humans or animals in relation to their environment. The definition of SR38ED specifically excludes work with respect to research in the social sciences or the humanities. Psychology is a social science however, paragraph (d) of the definition of SR38ED lists psychological research work as eligible work when it is undertaken directly in support of an SR38ED project in a field of science or technology other than the social sciences or humanities. Only the work with respect to psychological research that is commensurate with the needs and directly in support of an SR38ED project can be claimed. For example, in many projects involving interaction between human and machine, the interaction between a human operator and the device that he or she is controlling poses a complex technological problem. Major contributing factors are the physiological, neurological, and other limitations of the human operator, considered as an element within a servo system. The effect of these limitations implies that changes to the purely physical elements comprised in the system may be necessary, and that these changes can be best undertaken by simulation or actual (or real) testing with the human operator in the servo loop. Adjustments or modifications to the system are made until a point is reached where the human operator can carry out a prescribed task without excessive physical or neurological effort. Certain aspects of psychological research may also be involved in this kind of development. Work with respect to this type of psychological research that is directly in support and commensurate with the needs of basic research. applied research or experimental development is considered eligible. A public authority is generally an entity that: has a duty to the public is subject to a significant degree of government control and uses its profits for the benefit of the public. Qualified individuals are personnel who have qualifications and or experience in science. technology or engineering. The qualifications and experience must be relevant to the science or technology involved in the projects claimed. The term qualified SR38ED expenditure is a term used on Form T661, Scientific Research and Experimental Development (SR38ED ) Expenditures Claim. The term represents all the amounts that qualify for calculating the investment tax credit in a tax year, except for repayments of assistance and contract payments made in that year. Qualifying corporation means: a corporation that is a Canadian-controlled private corporation (CCPC ) in a particular tax year, with a taxable income in the previous tax year that is not more than the corporations qualifying income limit for the particular tax year, or a corporation that is a CCPC in a particular tax year and is associated with one or more corporations and the total of the taxable incomes of the corporation and the associated corporations for their last tax year ending in the preceding calendar year that is not more than the corporations qualifying income limit for the particular tax year. The taxable income in the previous tax year or in the last tax year ending in the preceding calendar year is calculated before taking into consideration the specified future tax consequences for that previous year. Where a CCPC s qualifying income limit is reduced to zero because the CCPC s taxable capital is 50 million or greater in the immediately preceding year, the CCPC is not a qualifying corporation and would not be entitled to any refundable ITC . For the 2010 and later tax years, the qualifying income limit of a corporation for a particular tax year is the amount determined in the ITA by the formula: 500,000 x (40,000,000 A) 40,000,000 In this formula A is: nil if the taxable capital amount is less than or equal to 10 million or is the lesser of 40 million and the amount by which the taxable capital amount exceeds 10 million, in any other case. The taxable capital amount is the total of the corporations taxable capital employed in Canada for its immediately preceding tax year and the taxable capital employed in Canada of all associated corporations (if applicable) for the last tax year ending in the preceding calendar year that ended before the end of the particular tax year of the corporation. Taxable capital employed in Canada by the corporation has the meaning provided in the ITA. For more information on taxable capital, please refer to Interpretation Bulletin IT 532, Part I.3 Tax on Large Corporations . Quality control is the techniques and work that sustain the quality of a product or service to satisfy given requirements. Quality control consists of data collection. data analysis, and implementation, and applies to all phases of the product life cycle: manufacturing, delivery and installation, and operation and maintenance. Quality control is usually concerned with the functional merits of a material, device, product (for example, conformity to design specifications, including defining testing procedures and minimum quality standards), or process (for example, determining what changes must be made to achieve or maintain the required level of quality). Work with respect to quality control is specifically excluded from the definition of SR38ED . Related benefits include the employer8217s share of payments to the Canada Pension Plan (CPP ) or the Quebec Pension Plan (QPP ), Employment Insurance (EI ), the Worker8217s Compensation Board (WCB ), or the Commission de la sant233 et de la s233curit233 du travail du Qu233bec (CSST ), an approved employee pension plan, or employee medical, dental, or optical insurance plans, and premiums to a superannuation plan. For more information, please refer to section 5.1 of the SRampED Salary or Wages Policy . The words related to the business should be interpreted broadly. For SRampED to be related to a business carried on by a claimant, it is necessary to have some interconnection or link between the SRampED work and the general area of the claimants business. For greater certainty, SRampED related to a business includes any SRampED that may lead to, or facilitate, an extension of that business. The prosecution of SRampED. in and of itself is only considered a business of the claimant to which SRampED relates if the claimant derives all or substantially all (ASA ) of its revenue from the prosecution of SRampED . Where a claimant is a corporation, and the SRampED performed by the claimant relates to a business actively carried on by a related (non-arm8217s length ) corporation at the time when the SRampED was performed, the related to the business requirement is satisfied for the claimant. Remuneration based on profit means any remuneration to an employee that is conditional on the profit of the business or that is a portion of the profit of the business. A retiring allowance is an amount paid on or after the retirement of an employee in recognition of long service or in respect of the loss of an office or employment. A retiring allowance is not considered to be salary or wages by definition. As a result, a retiring allowance cannot be allowed as salary or wages under either the traditional method or the proxy method. A claimant may be able to treat a retiring allowance as overhead and other expenditures under the traditional method if it is directly related to the prosecution of SRampED and is incremental . The salary base is an amount used to calculate the prescribed proxy amount (PPA ). The PPA for a tax year is a percentage of the salary base, subject to the overall PPA cap. The salary base is composed of the salaries or wages (incurred and paid in the tax year or paid within 180 days of the tax year-end) of employees who are directly engaged in SR38ED and that are included in the pool of deductible SR38ED expenditures. However, the salary base cannot include taxable benefits. remuneration based on profits. or bonuses, or prior years unpaid salary or wages paid in the tax year. In addition, the amount of salary or wages that can be taken into account is further restricted for a specified employee . The term salary or wages is defined in the ITA and means income from an office or employment. Salary or wages generally includes any expenditure made in respect of a taxable benefit as well as vacation pay, statutory holiday pay, sick leave pay, pay in lieu of termination notice, bonuses, tips and gratuities, honorariums, directors fees, management fees and commissions. Salary or wages do not include amounts in respect of the employers shares of the related benefits, amounts for extended vacation or sick leave, stock options benefits and retiring allowance. These amounts must be incurred and paid in the tax year or paid within 180 days of the tax year-end. Sales promotion is work that supplements advertising and personal selling coordinating them, and making them effective. Sales promotion work generally includes stimulating sales through options such as: special offers demonstrations contests samples discounts exhibitions or trade shows games giveaways public relations and point-of-sale displays and merchandising. Work with respect to sales promotion is specifically excluded from the definition of SR38ED . Science is a branch of study in which phenomena are observed and classified and, usually, in which quantitative and qualitative relations are formulated and verified. Scientific or technological advancement is the generation of information or the discovery of knowledge that advances the understanding of scientific relations or technology. This definition encompasses the definition of scientific advancement, advancement of scientific knowledge and technological advancement. The only difference is that scientific advancement and advancement of scientific knowledge relate to science whereas technological advancement relates to technology . For more information, please refer to section 2.1.4 of the Eligibility of Work for SR38ED Investment Tax Credits Policy . Scientific or technological knowledge base refers to the existing level of technology and scientific knowledge, and consists of the knowledge of the resources within the company and sources available publicly. The resources within the company include: technical knowledge, education, training, and experience of its personnel and its technical capabilities typified by its current products, techniques, practices, and methodologies (for example, trade secrets and intellectual property). Publicly available sources generally include scientific papers, journals, textbooks, and internet-based information sources as well as expertise accessible to the company (for example, through recruiting employees or hiring consultants or contractors). The company is expected to have information that is common knowledge at the time the work is performed. Common knowledge is knowledge available to professionals familiar with the specific areas of science or technology in question. It is recognized that, although the knowledge available publicly is the same for all companies, the scientific or technological knowledge base may vary from company to company because the internal resources can vary from company to company. Note The following are the explanation of changes to this term as of April 24, 2015. The term technology base or level has been changed to scientific or technological knowledge base. The change is to clarify that the concept applies equally to basic research, applied research, and experimental development. publications has been removed from the list of sources generally included in as publicly available. This was considered redundant. consultants was added to the list of examples of expertise accessible to the company. The last paragraph was modified for readability. Scientific or technological uncertainty means whether a given result or objective can be achieved or how to achieve it, is not known or determined on the basis of generally available scientific or technological knowledge or experience. This definition encompasses the definition of scientific uncertainty, technological uncertainty and technological obstacle. The only difference is that scientific uncertainty relates to science whereas technological uncertainty and technological obstacle relate to technology . For more information, please refer to section 2.1.1 of the Eligibility of Work for SR38ED Investment Tax Credits Policy . Scientific research and experimental development (SR38ED ) Recherche scientifique et dveloppement exprimental (RS38DE ) SR38ED is160defined for income tax purposes in subsection 248(1) of the ITA as follows: scientific research and experimental development means systematic investigation or search that is carried out in a field of science or technology by means of experiment or analysis and that is (a) basic research, namely, work undertaken for the advancement of scientific knowledge without a specific practical application in view, (b) applied research, namely, work undertaken for the advancement of scientific knowledge with a specific practical application in view, or (c) experimental development, namely, work undertaken for the purpose of achieving technological advancement for the purpose of creating new, or improving existing, materials, devices, products or processes, including incremental improvements thereto, and, in applying this definition in respect of a taxpayer, includes (d) work undertaken by or on behalf of the taxpayer with respect to engineering, design, operations research, mathematical analysis, computer programming, data collection, testing or psychological research, where the work is commensurate with the needs, and directly in support, of work described in paragraph (a), (b), or (c) that is undertaken in Canada by or on behalf of the taxpayer, but does not include work with respect to (e) market research or sales promotion, (f) quality control or routine testing of materials, devices, products or processes, (g) research in the social sciences or the humanities, (h) prospecting, exploring or drilling for, or producing, minerals, petroleum or natural gas, (i) the commercial production of a new or improved material, device or product or the commercial use of a new or improved process, (j) style changes, or (k) routine data collection To qualify as second term shared-use-equipment, a property must be: property that was first term shared-use-equipm ent equipment that is used by the claimant during its operating time in the period starting at the time the property was acquired and was available for use and ends at the end of the first tax year that was at least 24 months after the time the equipment was acquired and available for use (this is the second period ) and used by the claimant during its operating time in the second period primarily for the prosecution of SR38ED in Canada. Shared-use-equipment (SUE ) Matriel vocations multiples (MVM ) Investment tax credits (ITC )160are no longer available in respect to SUE for tax years ending after February 1, 2017. Expenditures of a capital nature for capital property acquired or available for use after 2013, no longer qualify for SR38ED tax incentives. However, because of the interaction of the definition first term SUE and second term SUE. ITCs on SUE may still be claimed until 2017. A SR38ED ITC can be earned on a portion of the cost of equipment used primarily for the prosecution of SR38ED. Equipment that qualified as first term shared-use-equipment or second term shared-use equipment can earn an SR38ED ITC . Social sciences are disciplines characterized by their concern with human beings, their culture, and their economic, political, and social relationships with the environment. Academicians generally categorize knowledge into four main areas: physical sciences, biological sciences (or natural sciences), humanities, and social sciences, although others recognize only two categories: natural sciences and social sciences. Generally, the social sciences include anthropology, economics, political science, psychology, sociology,160and sometimes160education, law, philosophy, religion, and history. Management is also considered a social science. Work with respect to research in social sciences is specifically excluded from the definition of SR38ED. However, under certain circumstances, work with respect to psychological research may be eligible. Note The following are the explanation of changes to this term as of April 24, 2015. criminology, geography, and psychiatry were removed from the definition. and sometimes was added to indicate that education, law, philosophy, religion, and history are not always considered social sciences. A specified employee is an employee who does not deal at arms length with the employer or who is a specified shareholder of the employer. A specified shareholder is a person who owns, directly or indirectly, at any time during the year, 10 or more of the issued shares of any class of the capital stock of the employer or of any corporation related to the employer. A specified employee could also be someone related to a specified shareholder e. g. a sister, a brother, a spouse, etc. For more information please refer to the Contract Expenditures for SR38ED Performed on Behalf of a Claimant Policy . SR38ED capital expenditure Dpense en capital de RS38DE SR38ED capital expenditures made after 2013, no longer qualify for SR38ED tax incentives. This includes capital expenditures made before 2014 for property that became available for use after 2013. A SR38ED capital expenditure is an expenditure made to acquire new or used depreciable property intended to be: used all or substantially all (ASA ) of the operating time in its expected useful life in the performance of SR38ED in Canada or consumed ASA of its value in the performance of SR38ED in Canada. SR38ED current expenditure Dpense courante de RS38DE A SR38ED current expenditure is an expenditure of a current nature made by a claimant on or in respect of SR38ED that is described in the following policies: SR38ED reporting deadline Date limite de production pour la RS38DE A claimants reporting deadline for an SR38ED expenditure is the last day for which a prescribed form containing prescribed information in respect of the expenditure is required to be filed for the year. The reporting deadline to file the prescribed Form T661, Scientific Research and Experimental Development (SR38ED ) Expenditures Claim. for an SR38ED expenditure is 12 months after the claimants filing-due date of the return for the year in which the expenditure was incurred. The reporting deadline to include an ITC amount earned in respect of an SR38ED expenditure on the prescribed Schedule T2SCH31, Investment Tax Credit Corporations or Form T2038(IND) , Investment Tax Credit (Individuals). is also 12 months after the claimants filing-due date of an income tax return for the year in which the expenditure was incurred. For corporations the SR38ED reporting deadline is generally 18 months after the tax year end. For more information, please refer to section 6.0 of the SR38ED Filing Requirements Policy . A style change is a change in the physical appearance or arrangement of an article without altering its utility, efficiency, function, or operating characteristics. Work with respect to style changes is specifically excluded from the definition of SR38ED . The work identified in paragraph (d) of the definition of SR38ED is usually referred to as support work. Work with respect to the eight categories listed in paragraph (d) does not constitute SR38ED on its own. However, if it is commensurate with the needs and directly in support of basic research. applied research or experimental development work undertaken in Canada, it falls within the meaning of SR38ED . System uncertainty is a form of technological uncertainty that can arise from or during the integration of technologies, the components of which are generally well known. This is due to unpredictable interactions between the individual components or sub-systems. For more information, please refer to section 2.1.1 of the Eligibility of Work for SR38ED Investment Tax Credits Policy . The systematic investigation or search called for in the definition of SR38ED is an approach that includes defining a problem, advancing a hypothesis towards resolving that problem, planning and testing the hypothesis by experiment or analysis. and developing logical conclusions based on the results. For more information, please refer to section 2.1.3 of the Eligibility of Work for SR38ED Investment Tax Credits Policy . Note The following160is the explanation of changes to this term as of April 24, 2015. scientific method has been removed from the explanation as it is no longer used in policy. Taxable benefits are benefits or allowances an employer provides to its employees that are taxable under the ITA. For example: automobile benefits housing, board, and meals gifts and awards interest-free or low-interest loans group term life insurance policies or tuition fees. For more information, please refer to section 3.0 of the SR38ED Salary or Wages Policy . A taxable supplier means: a person resident in Canada a Canadian partnership or a non-resident person or non-Canadian partnership that carries on a business through a permanent establishment in Canada. Technology is the practical application of scientific knowledge and principles. While technology can be represented in physical form (patents, procedures, design documents, manuals, etc.), it is not a physical entity. It is the knowledge of how scientifically determined facts and principles are embodied in the material, device, product, or process. Testing is the application of procedures designed to observe, measure, or verify attributes, properties, or performance. The term routine testing refers to testing performed during the course of normal business operations, for example, testing carried out primarily to determine user acceptance, suitability, marketability, or competitive assessment. Work with respect to routine testing is specifically excluded from the definition of SR38ED. Only the testing work that is commensurate with the needs and directly in support of basic research. applied research or experimental development is eligible. A third party payment is generally a payment made by a claimant to an entity to be used for SR38ED carried on in Canada, that is related to a business of the claimant and the claimant must be entitled to exploit the results of the SR38ED . For more information, please refer to the Third-Party Payments Policy . The traditional method involves specifically identifying and claiming all overhead and other expenditures, directly attributable to the SR38ED carried on in Canada, that the claimant incurred during the year. Virtually valueless means a value that is 10 or less of the cost. Year8217s maximum pensionable earnings (YMPE ) Maximum des gains annuels ouvrant droit 224 pension (MGAP ) The years maximum pensionable earnings (YMPE ) is an amount determined under section 18 of the Canada Pension Plan . It is used in the calculation of the maximum amount of salary or wages for a specified employee that can be included in the pool of deductible SRampED expenditures (5 times the YMPE ) and in the salary base for the calculation of the prescribed proxy amount (PPA ) (2.5 times the YMPE ). To obtain the YMPE for each year, use the Rates for Money Purchase limits, RRSP limits, YMPE. DPSP limits and Defined Benefits limits . Date modified: 2015-07-15 Secondary menu Site InformationSRampED Salary or Wages Policy Changes to the SR38ED Salary or Wages Policy Reasons for revision This revision accommodates the legislative changes that have been announced. Legislation was enacted to confirm that the value of an option granted and the increase between the option price and the exercised share price (relating to stock option benefits) are not allowable scientific research and experimental development (SR38ED ) expenditures. The text of this document has been revised to reflect these changes, see Appendix B.1 Explanation of changes . 1.0 Purpose The purpose of this document is to clarify the position of the Canada Revenue Agency (CRA ) regarding salary or wages when administering the SRampED legislation under the federal Income Tax Act and the Income Tax Regulations . In particular, its purpose is: to explain what may be included in salary or wages for SRampED purposes to highlight the differences between directly undertaking, supervising or supporting salary or wages under the directly attributable rules when using the traditional method and directly engaged salary or wages when using the proxy method and to clarify the CRA s position with respect to some issues that are common to both the traditional method and the proxy method. 2.0 Overview The term salary or wages is defined in the Income Tax Act (see section 2.1 ) and means income from an office or employment. Salary or wages generally includes any expenditure made in respect of a benefit that would be taxable to the employee under section 6 of the Act (see section 3.0 ) as well as vacation pay, statutory holiday pay, sick leave pay, pay in lieu of termination notice, bonuses (see section 4.0 ), tips and gratuities, honorariums, directors fees, management fees and commissions. These amounts must be paid to or incurred for the employees in the year (see section 2.2 ). Salary or wages do not include amounts in respect of the employers shares of the related benefits (see section 5.1 ), amounts for extended vacation or sick leave (see section 5.2 ), stock options benefits (see section 5.3 ) and retiring allowances (see section 5.4 ). There is also a general rule that applies to exclude unpaid salary or wages (see section 11.0 ). The general rules described in the sections referred to above also apply for SRampED purposes. However, there are specific rules that apply in order for salary or wages to be an allowable SRampED expenditure. These rules are discussed in section 7.0 for claimants using the proxy method and in section 8.0 for claimants using the traditional method . Other specific rules apply to salary or wages for SRampED purposes. There are rules for: specified employees (see section 6.0 ), administrative salary or wages under the traditional method (see section 9.0 ) and for salary or wages of employees performing SRampED outside Canada (see section 10.0 ). 2.1 Legislation The definition of salary or wages in the Act is as follows: salary or wages, except in sections 5 and 63 and the definition death benefit in this subsection, means the income of a taxpayer from an office or employment as computed under subdivision a of Division B of Part I and includes all fees received for services not rendered in the course of the taxpayers business but does not include superannuation or pension benefits or retiring allowances. Legislative reference Income Tax Act Subsection 248(1) Definition of salary or wages 2.2 Expenditures incurred To be included in the pool of deductible SRampED expenditures for SRampED carried on in Canada, an expenditure must be an expenditure on or in respect of SRampED . One of the requirements to meet this condition is that the expenditure must be incurred . Legislative Reference Income Tax Act Subsection 37(8) SRampED expenditures 2.2.1 Examples of expenditures not incurred In certain cases, expenditures are considered not to be incurred. Some examples are: employee remuneration that is not paid within 180 days from the end of the tax year in which the expense was incurred (see section 11.0 ) the value of a taxable benefit (see section 3.1 ) stock option benefits (see section 5.3 ) Legislative reference Income Tax Act Subsection 78(4) Unpaid remuneration and other amounts 2.3 SRampED salary or wages inclusions and exclusions Amounts included in SRampED salary or wages Salary or wages (see section 2.0 ) If it is incurred on or in respect of SRampED If electing the proxy method. salary or wages for employees directly engaged in SRampED in Canada may be included (see section 7.0 ) If using the traditional method. salary or wages for employees directly undertaking, supervising, or supporting SRampED may be included (see section 8.0 ) Administrative salary or wages for employees directly attributable may be included as SRampED overhead and other expenditures provided the traditional method is used (see section 9.0 ). Permissible salary or wages for SRampED work performed outside Canada may be included (see section 10.0 ) Taxable benefits (see section 3.0 ) Cash benefit May be included in SRampED salary or wages Non-cash benefit (the value of the benefit) May be included in SRampED salary or wages, if: the value is a reasonable estimate of actual coststhe value of the benefit does not include any Goods and services tax Harmonized sales tax (GST HST ) or Provincial sales tax (PST ), unless no input tax credit was claimedthe actual costs to which the non-cash benefit relates are not claimed as a business expense Bonuses (see section 4.2 ) For employees other than specified employees Remuneration based on profits (see section 4.1 ) For employees other than specified employees Inducements, non-competition payments (see section 4.3 ) Considered to be remuneration for services rendered during employment (exceptions may apply) Note The rules discussed relate only to bonuses with respect to expenditures f or salary or wages. Rules concerning bonuses affecting the prescribed proxy amount are discussed in the Prescribed Proxy Amount Policy . Amounts excluded from SRampED Salary or Wages Related benefits (see section 5.1 ) Could be considered as overhead and other expenditures under the traditional method Extended vacation or sick leave (see section 5.2 ) Considered not directly undertaking, supporting or supervising considered not directly engaged Stock option benefits (see section 5.3 ) Considered not to be an expenditure for SRampED Retiring allowance (see section 5.4 ) Could be considered as overhead and other expenditures under the traditional method 3.0 Taxable benefits Taxable benefits are benefits or allowances an employer provides to its employees that are taxable under the Income Tax Act . For example: automobile benefits housing, board, and meals gifts and awards interest-free or low-interest loans group term life insurance policies or tuition fees. As stated in the T4088, Guide to Form T661 Scientific Research and Experimental Development (SRampED ) Expenditures Claim. s alary or wages could relate to gross wages reported on a T4 slip for the calendar year if the tax year ends at the calendar year-end. However, when using the T4 slips as a basis for determining the allowable salary or wages, certain adjustments may be required to be made as discussed in sections 3.1 to 3.3 below. Legislative reference Income Tax Act Section 6 Taxable benefits 3.1 Expenditure incurred vs. value of taxable benefits Where an employee receives a non-cash benefit . the employer must determine the value of the benefit and include that value in the employees income. A list of all non-cash benefits is provided in Guide T4130, Employers Guide Taxable Benefits and Allowances. For the employer, however, the value of a benefit is not an expenditure incurred and, therefore, is not an allowable SRampED expenditure. In certain cases, the actual costs incurred by the company may have no relation to the value of the benefits otherwise determined. In determining the allowable amount of a taxable benefit, only the actual costs incurred in respect of the taxable benefits should be included in the allowable salary or wages. This is consistent with the existing practice applicable to the automobile standby charge (see section 3.1.1 ). The value of a benefit to the claimant will be allowed as an SRampED expenditure if all the following conditions are met: it represents a reasonable estimate of the actual cost incurred (the onus is on the claimant to demonstrate the reasonableness) the amount of the benefit claimed does not include any GST HST or PST (unless no input tax credit refund was claimed) (see section 3.2 ) and the actual costs, including capital cost allowance (CCA ), to which the value of the benefits relates are not claimed as business expenses under section 9 of the Act. 3.1.1 Example: Automobile and motor vehicle benefits The benefit for an automobile provided by the employer for the year includes a standby charge for the year and an operating expense benefit for the year (minus any reimbursements by the employee). The value of the benefit, including the GST HST or PST that applies, is included in box 14 of the T4 slip as Employment income, and in the Other information area under code 34. Although automobile taxable benefits, including standby charges, may not involve an expenditure incurred in the year, in practice an amount in respect of such benefits can be included as salary or wages if the amount represents a reasonable estimate of the actual costs incurred and does not include any GST HST or PST (unless no input tax credit refund was claimed) and the automobile expenses and CCA to which the standby charge relates are not included in calculating business income. 3.2 GST HST or PST considerations Some taxable benefits (for example, non-cash benefits) included on the employees T4 slip may include a GST HST or PST component. The employer may claim an input tax credit for the GST HST that applies on the taxable benefits (or a similar provincial credit for PST on taxable benefits). The amount of input tax credit claimed is deemed to be government assistance. Therefore, no GST HST or PST amount should be included in the allowable SRampED salary or wages where an input tax credit (or a similar provincial credit) is claimed in respect of these amounts. Legislative reference Income Tax Act Subsection 248(16) GST Input tax credit and rebate 3.3 Value of taxable benefits T4 slips Other taxable non-cash benefits are based on the value of the benefits (for example, value of parking). A list of all non-cash benefits are provided in Guide T4130 Employers Guide Taxable Benefits and Allowances. Other than specific codes for certain non-cash benefits, it should be noted that code 40 could include the value of certain non-cash benefits as well as GST HST or PST. depending of the type of benefits. Claimants also have to ensure that no amounts are claimed as salary or wages for the following benefits: Interest-free and low-interest loan (box 14 of the T4 slip and code 36 and 37 in the Other information of the T4 ) is not an expenditure incurred and does not qualify as SRampED salary or wages. Security options benefits (box 14 of the T4 slip and code 38 in the Other information of the T4 ) are not allowable expenditures (see section 5.3 ). In certain situations, placement agency workers (box 14 of the T4 slip and code 81 in the Other information of the T4 ) are not employees of the claimant, yet the claimant pays the salary and has to prepare the T4 slip for the workers. In these situations, the salary or wages of the placement agency workers do not qualify as salary or wages expenditures for the claimant but could qualify as a contract expenditure for SRampED performed on behalf of the claimant. For more information on contract expenditures for SRampED performed on behalf of a claimant, please refer to the Contract Expenditures for SRampED Performed on Behalf of a Claimant Policy . 4.0 Bonuses, remuneration based on profits and other types of remuneration Restrictions apply to bonuses (see section 4.2 ) and remuneration based on profits (see section 4.1 ) in respect of specified employees (see section 6.0 ). When calculating the prescribed proxy amount (PPA ). all bonuses and remuneration based on profits (both to specified and non-specified employees) are excluded from the salary base of employees directly engaged in SRampED in Canada. For more information on the PPA. please refer to the Prescribed Proxy Amount Policy . Bonus and remuneration based on profits are not defined in the Income Tax Act or the Regulations. Therefore, the ordinary dictionary definitions of the terms apply. Legislative reference Income Tax Act Subsection 37(9) Remuneration based on profits or bonus for specified employees Legislative reference Income Tax Regulation Subsection 2900(9) Exclusions to salary base 4.1 Meaning of remuneration based on profits Remuneration based on profit means any remuneration to an employee that is conditional on the profit of the business or that is a portion of the profit of the business. 4.2 Meaning of bonus Bonus is an amount in addition to the employees normal remuneration (additional remuneration). An unenforceable bonus refers to a payment that is not earned and is a gift or gratuity. The amount would be considered to be a bonus if it was not paid pursuant to the employees terms of employment and the employer was under no obligation to make the payment. For this purpose, the extent to which a bonus payment is based on an employees performance is immaterial. An enforceable bonus refers to an amount paid (premium) to an employee in recognition of achieving certain performance objectives pursuant to the employees terms of employment (or specific agreement). In that case, the employer was under no obligation to pay the bonus until the employee met the specific performance objectives. The liability will be recognized as a bonus only in the year the legal obligation arises. The number of times in the year that a bonus is paid does not, in itself, affect the meaning of the term bonus. Where an employee performs duties that are considered to be directly engaged in SRampED under the proxy method (see section 7.0 ) or are considered to be directly undertaking, supervising or supporting the prosecution of SRampED under the traditional method (see section 8.0 ) and the only remuneration in the year in respect of performing those duties was bonuses or remuneration based on profits, the CRA will consider an amount thereof that is commensurate with the performance of those duties to be salary or wages directly attributable to SRampED or directly engaged in SRampED. The determination of what is commensurate is a question of fact and may require the utilization of industrial standards published by various technological or professional associations. The above position would apply in a situation where a company could not pay an employee (specified or other than specified) a salary throughout the year but, at year-end, was able to pay its employee a lump-sum amount. Under this position, the amount (or a portion) is considered to be salary or wages, both for the purposes of the pool of deductible SRampED expenditure and the PPA calculation, and not a bonus remuneration based on profit on Form T661, provided that all necessary payroll procedures have been followed and applied. Legislative references Income Tax Act Clause 37(8)(a)(ii)(A) SRampED expenditures in Canada under the traditional method Clause 37(8)(a)(ii)(B) SRampED expenditures in Canada under the proxy method Subsection 37(9) Remuneration based on profits or bonus for specified employees Legislative reference Income Tax Regulation Subsection 2900(9) Exclusions to salary base 4.3 Inducement payments and non-competition payments to employees An amount received under an agreement made immediately before, during or immediately after the period that the payee was employed by the payer (for example a signing bonus or a non-competition payment) is deemed to be remuneration for services rendered during the period of employment. This deeming rule does not apply, however, if the amount cannot reasonably be regarded as having been received under the contract of employment or for entering into a contract of employment or for a covenant with respect to what the payee is or is not to do before or after his employment terminates. To be considered remuneration for services rendered during the period of employment, any amount payable under a written or oral agreement, as described above, must have the nature and quality of salary, wages, commissions, etc. Inducement payments to prospective employees (often referred to as a signing bonus) or non-competition payments to employees who terminate their employment, such as described above, are treated as regular salary or wages for services rendered during the period of employment. These types of payments do not meet the definition of bonus (see section 4.2 ). Further, such an inducement payment that is deemed to be remuneration for services rendered during the period of employment is excluded from the salary base for the purpose of calculating the PPA. For more information on the salary base, please refer to section 3.0 of the Prescribed Proxy Amount Policy . Legislative references Income Tax Act Section 5 Income or loss from an office or employment Subsection 6(3) Payments by employer to employee Legislative reference Income Tax Regulation Subsection 2900(9)(a) Exclusions to salary base 4.4 Expenditure on or in respect of SRampED To be deductible for SRampED purposes, bonuses, remuneration based on profits and other remuneration as discussed in section 4.3 above must be an expenditure on or in respect of SRampED. This would be the case only if the amount can reasonably be considered to be in respect of the prosecution of SRampED under the traditional method (see section 8.0 ) or to relate to such prosecution under the proxy method (see section 7.0 ). For more information on this requirement, please refer to section 7.3.2 . Legislative references Income Tax Act Subsection 37(1) Pool of deductible SRampED expenditures Subsection 37(8) SRampED expenditures Legislative reference Income Tax Regulation Paragraph 2900(2)(b) Employee remuneration Traditional method 5.0 Amounts that are not salary or wages 5.1 Related benefits A claimant may be able to treat related benefits as overhead and other expenditures on line 360 of Form T661 under the traditional method. For more information on the treatment of related benefits as SRampED overhead and other expenditures, please refer to section 4.3 of the SRampED Overhead and Other Expenditures Policy . Related benefits include the employers share of payments to the Canada Pension Plan (CPP ) or the Quebec Pension Plan (QPP ), Employment Insurance (EI ), the Workers Compensation Board (WCB ), or the Commission de la sant et de la scurit du travail du Qubec (CSST ), an approved employee pension plan, or employee medical, dental, or optical insurance plans, and premiums to a superannuation plan. The following expenditures can also be considered related benefits, provided such expenditures do not constitute a taxable benefit, since taxable benefits are elements of an employees salary or wages (see section 3.0 ): supplementary sick benefits and an employers contributions in relation to an employee savings plan where, for example, for every 3 dollars that an employee uses to purchase shares in the parent company the employer undertakes to pay 1 dollar, up to a given maximum. The employers contributions to the Quebec and Ontario health insurance plans are not related benefits, since it is not necessary to be an employee to benefit from these plans. Consequently, under the traditional method such contributions are general business expenses that can only be SRampED overhead and other expenditures if they are directly related and incremental to the prosecution of SRampED in Canada. For more information on SRampED overhead and other expenditures, please refer to the SRampED Overhead and Other Expenditures Policy . Legislative reference Income Tax Act Subclause 37(8)(a)(ii)(A)(II) SRampED expenditures in Canada under the traditional method Directly attributable Legislative reference Income Tax Regulation Paragraph 2900(2)(c) Other expenditures directly related and incremental to the prosecution of SRampED Traditional method 5.2 Expenditures for extended vacation or sick leave Salary or wages relating to extended vacation or sick leave are not considered to be directly undertaking, supervising or supporting SRampED or directly engaged in SRampED since the employee would not be performing any duties during the leave period. Extended leave is considered to be leave in excess of the normal annual leave earned. The employees total time available for work is based on the number of days the employee reports to work regardless of the task performed. For example, if the employee works 5 working days per week and assuming 11 statutory holidays per year, the employee would have total time available for work (if no vacation or sick leave were taken) of approximately 250 days. 5.2.1 Example Employee X (a non-specified employee) receives a salary of 10,000 per month. He earns 20 days (4 weeks) of vacation and 20 days (4 weeks) of sick leave each year. He is also compensated for statutory holidays. For the purposes of the example we will use 250 days as a starting point for determining total time available for work. The tax year is from January 1 to December 31. Employee X was directly engaged in SRampED for 125 days (from January to the end of June). The remaining 125 days (from beginning of July to the end of December), he performed duties that were totally unrelated to SRampED. He did not take vacation or sick leave in Year 1. In this year, the employees total time available for work for the entire year is 250 days. Year 1 Directly engaged salary calculation: Salary expense 12 months (January 1 to December 31) x 10,000 120,000 Accrued vacation expense (considered reasonable) 9,600 Total 129,600 Year 1 Directly engaged portion: 125 250 days x 129,600 64,800 Employee X was directly engaged in SRampED for 168 days (for all of January and April, and from the beginning of July to the end of December). For 42 days (all of May and June), he performed duties that were totally unrelated to SRampED. He took vacation for all of February and March (40 days of accrued vacation) in Year 2. He did not take any sick leave in Year 2. Thus in this year the employees total time available for work is 210 days (250 40). Year 2 Directly engaged salary calculation: Salary expense 10 months (January, April, and May 1 to Dec 31) x 10,000 100,000 Vacation expense (considered reasonable) 9,600 Total 109,600 Year 2 Directly engaged portion: 168 210 days x 109,600 87,680 Employee X was directly engaged in SRampED for 42 days (from the beginning of January to the end of February). For 83 days (from the beginning of March to the end of June), he performed duties that were totally unrelated to SRampED. For the remaining 125 days of the year, he took sick leave. He did not take any vacation in Year 3. Thus in this year the employees total time available for work is 125 days (250 125). Year 3 Directly engaged salary calculation: Salary expense 6 months (January 1 to June 30) x 10,000 60,000 Sick leave expense 60,000 Accrued vacation expense (considered reasonable) 4,800 Total 124,800 Year 3 Directly engaged portion: 42 125 days x 74,400 24,998 9,600 x 6 12 months as the employee was sick for 6 months. Salary expense 60,000 (6 x 10,000) Sick leave expense attributable to normal annual leave 9,600 (20 days) Accrued vacation expense 4,800 5.3 Stock option benefits Options granted or shares issued on or after November 17, 2005 5.3.1 Background Stock option benefits Proposed legislation announced on November 17, 2005, that received royal assent on June 26, 2013, clarifies that when the fair market value of shares issued by the corporation exceeded the exercise price payable to the corporation for its shares under an employee stock option plan, the excess will not be recognized as an expenditure for income tax purposes. 5.3.2 Treatment of stock option benefits For income tax purposes, no expenditure will be considered to have been made by a taxpayer on shares issued on the exercise of options, except to the extent of an actual outlay or expense incurred by the taxpayer. In determining the expenditure resulting from the claimant having granted or issued an option on or after November 17, 2005, the value of an option granted by a claimant is not considered to be an expenditure for income tax purposes. The legislative measures provide for two (2) reductions from the related expenditure as described below. The first reduction applies on the issuance of a share (other than on the exercise of an option). Generally, the corporation is to reduce the related expenditure by the amount, if any, by which (i) the fair market value of the share (ii) that portion of the amount of the consideration that the issuing corporation has received for issuing the share that is added to, and not deducted because of a provision of the Income Tax Act from, the paid-up capital of the class of shares that includes the share. The second reduction applies if the issuance of the share is a consequence of the exercise of an option. Generally, the corporation is to reduce the related expenditure by the amount, if any, by which (i) the fair market value of the share (ii) that portion of the amount paid, pursuant to the terms of the option, by the holder to the issuing corporation for issuing the share, that is added to, and not deducted because of a provision of the Act from, the paid-up capital of the class of shares that includes the share. The reductions do not apply to reduce an expenditure if the expenditure itself does not include an amount determined to be excesses as described in these subsections. Legislative References Income Tax Act Section 7 Stock options Subsection 143.3(2) Options Limitation Paragraph 143.3(3)(a) Limitation concerning issuance of a share Paragraph 143.3(3)(b) Limitation concerning exercise of an option Subsection 143.3(5) Clarification 5.4 Retiring allowances A retiring allowance is included in the income of the recipient. However, a retiring allowance is not considered to be salary or wages by definition. As a result, a retiring allowance cannot be allowed as salary or wages under either the traditional method or the proxy method . A claimant may be able to treat a retiring allowance (which may include a payment described as termination or severance pay) as overhead and other expenditures on line 360 of Form T661 under the traditional method. For more information on retiring allowances as SRampED overhead and other expenditures, please refer to the SRampED Overhead and Other Expenditures Policy . Legislative references Income Tax Act Subparagraph 56(1)(a)(ii) Retiring allowance Subsection 248(1) Definition of salary or wages 5.4.1 Accumulated vacation and sick leave credits upon retirement Payments in respect of yearly accumulated vacation leave and sick leave are considered to be income from an office or employment and are taxable as salary or wages in the year in which the payment is received. However, the Supreme Court of Canada in Harel v. The Deputy Minister of Revenue of the Province of Quebec (77 DTC 5438) has confirmed that an amount received upon or after retirement in respect of unused sick leave credits qualifies as a retiring allowance. Legislative reference Income Tax Act Section 5 Income or loss from an office or employment 6.0 Specified employees A specified employee is an employee who does not deal at arms length with the employer or who is a specified shareholder of the employer. A specified shareholder is a person who owns, directly or indirectly, at any time during the year, 10 or more of the issued shares of any class of the capital stock of the employer or of any corporation related to the employer. A specified employee could also be someone related to a specified shareholder for example, a sister, a brother, a spouse, etc. For the purpose of determining the 10 threshold, shares owned by a person with whom the employee does not deal at arms length are included. Legislative references Income Tax Act Subsection 248(1) Definition of specified employee Section 251 Arms length 6.1 Bonuses or remuneration based on profits for specified employees An expenditure on or in respect of SRampED carried on in Canada does not include a bonus or remuneration based on profits, in respect of a person who is a specified employee of the payer. For example, if a corporation pays or accrues a bonus to an employee who is its sole shareholder and therefore a specified employee, the bonus is not an expenditure on or in respect of SRampED. However, a bonus paid or payable by the same corporation to an employee who is not a specified employee of the corporation could be an expenditure on or in respect of SRampED . Legislative reference Income Tax Act Subsection 37(9) Remuneration based on profits or bonus for specified employees 6.1.1 Limitation regarding specified employees The amount that a claimant can claim as an expenditure on SRampED for salary or wages of a specified employee is subject to a limit (salary cap). The salary or wages is limited to five times the Years Maximum Pensionable Earnings (YMPE ) as determined under section 18 of the Canada Pension Plan and prorated for the number of days on which the claimant is a specified employee during the year. To obtain the YMPE for each year, use the Rates for Money Purchase limits, RRSP limits, YMPE. DPSP limits and Defined Benefits limits . Legislative references Income Tax Act Clause 37(8)(a)(ii)(A) SRampED Expenditures in Canada under the traditional method Clause 37(8)(a)(ii)(B) SRampED Expenditures in Canada under the proxy method Subsection 37(9.1) Limitation re-specified employees 6.1.2 Rules for associated corporations No expenditures may be claimed for the salary or wages of a specified employee of two or more associated corporations unless the associated corporations files an agreement with the CRA using Form T1174, Agreement Between Associated Corporations to Allocate Salary or Wages of Specified Employees for Scientific Research and Experimental Development (SRampED ) . It should be noted that individuals related to a particular corporation, certain partnerships and certain limited partnerships are deemed to be corporations associated with the particular corporation. The amount which may be claimed as SRampED expenditures in respect of salary or wages incurred for a specified employee is the amount allocated among associated corporations. The amount may not exceed five times the YMPE for the calendar year in which the tax year ends. Each associated corporation should file with its tax return, a completed copy of the form, and a certified copy of the resolution of the directors authorizing the agreement, or a Directors resolution delegating authority to an authorized officer of each corporation signed by the designated authorized officers of each corporation. The Directors resolution will be in effect for all subsequent years until it is rescinded. Where two corporations are owned exclusively by one shareholder, such a transfer signed by authorized officers of each corporation will be accepted provided that a signed confirmation by the shareholder is filed with Form T1174 and states that he or she is the only shareholder of both corporations and has authorized the transfer of the qualified expenditures from one corporation to the other corporation. A Directors resolution will not be required. Note Each associated corporation should file Form T1174 no later than the corporations respective reporting deadline for the particular tax years. Otherwise the amount for the salary or wages of a specified employee is deemed not to be an expenditure on SRampED . Legislative references Income Tax Act Subsection 37(9.1) Limitation re-specified employees Subsection 37(9.2) Associated corporations Subsection 37(9.3) Agreement among associated corporations Subsection 37(9.4) Filing Subsection 37(9.5) Deemed corporation 7.0 Salary or wages of employees directly engaged in SRampED Proxy method Under the proxy method. an expenditure on, or in respect of, SRampED includes the portion of an expenditure made in respect of an expense for salary or wages of an employee who is directly engaged in SRampED in Canada. Only the portion that can reasonably be considered to relate to such work having regard to the time spent by the employee on such SRampED can be included. When that portion represents all or substantially all (ASA ) of the time spent by the employee on such work, all of the expenditure is deemed to be on, or in respect of SRampED. For more information on the proxy method, please refer to the Traditional and Proxy Methods Policy . However, there are restrictions concerning bonuses and remuneration based on profits of specified employees as well as a salary cap for specified employees (see section 6.1.1 ). Legislative reference Income Tax Act Subclause 37(8)(a)(ii)(B)(IV) SRampED expenditures in Canada under the proxy method Directly engaged salary or wages 7.1 Meaning of directly engaged Directly engaged in SRampED Whether an employee is directly engaged in SRampED is based on the tasks that they perform and not on the job title of the employee. Directly engaged refers to hands-on work, which would be included in paragraphs (a) to (d) of the definition of SRampED in paragraph 248(1) of the Income Tax Act . Generally, employees, including managers and supervisors, conducting experimentation and analysis in the performance of basic research. applied research. or experimental development are considered to be directly engaged in SRampED . In addition, employees, including managers and supervisors, are considered to be directly engaged in SRampED when they are performing support work that is commensurate with the needs and directly in support of the basic or applied research or experimental development work. Managers and supervisors who supervise the ongoing SRampED work are also considered to be directly engaged in SRampED when they are directing the course of the ongoing SRampED work or when they are providing direct technical input into the SRampED work. However, any time spent by a manager or supervisor performing non-technological management activities or decision-making functions that do not directly influence the course of the SRampED. even if it relates to the SRampED. is not considered to be time the manager or supervisor is directly engaged in SRampED. In most cases, work performed beyond the first-line level of supervision does not qualify as directly engaged in SRampED. Where time is claimed for employees beyond the first-line level of supervision, the claimant will be asked to provide details of the duties the employees performed during the time they were directly engaged in SRampED. The claimant will also have to demonstrate how these duties are directly engaged, as described above. The CRA does not consider clerical and administrative staff providing a service to SRampED employees to be directly engaged in SRampED. This includes clerks, secretaries, and receptionists engaged in accounting, payroll, finance, legal support, purchasing, sales, human resources, shipping, inventory control, maintenance, word processing, and other such activities. However, please refer to section 9.3 for more information on the treatment under the traditional method. For example, employees, including managers and supervisors, considered to be directly engaged in SRampED. would normally perform such tasks as: preparing equipment and materials for experiments, tests, and analyses (this does not include time spent maintaining equipment) carrying out experiments, tests, and analyzes collecting data commensurate with the needs and directly in support of the experimentation and analyses and directing the course of the ongoing SRampED activities being claimed in the year and to the extent that the tasks are required as part of an SRampED project: recording measurements, making calculations, and preparing charts and graphs carrying out statistical surveys and interviews preparing computer programs and more generally, work with respect to engineering or design, operations research, mathematical analysis, and psychological research. Table 3 in the T4088, Guide to Form T661 Scientific Research and Experimental Development (SRampED ) Expenditure Claim. provides assistance to claimants to determine how to handle the salary or wages for various tasks and duties. The claimant should view its employees tasks in terms of how they correlate to the primary reason for employment when determining whether the employees salary or wages are directly engaged in SRampED. The determination of whether an employee is directly engaged in the prosecution of SRampED. however, is a question of fact. 7.1.1 Non-specialized employees who are directly engaged Directly engaged work could include hands-on work performed by both specialized and nonspecialized employees. Whether the work of a non-specialized employee can be considered work directly engaged in SRampED is a question of fact. This would be the case only if the following conditions are met: The work performed by the non-specialized employee must be directly in support and be an integral part of the basic or applied research or experimental development work. The non-specialized employees work must be supervised by staff with scientific or technological qualifications. The term direct means proceeding from one point to another without deviation or interruption straight directly would mean in a direct manner, without an intervening step or intermediary. This means that only the time spent by a non-specialized employee who is involved in an SRampED project, in a direct manner and without an intervening step or intermediary, could qualify as directly engaged in SRampED work. Further, an activity is considered to be directly in support of SRampED when it is reasonable to believe that the activity is required to carry out the SRampED. That is, it has been shown to be an integral part of the systematic investigation of a problem, and is required in the search for a theoretical or practical solution. Tasks performed by non-specialized employees are generally not considered to be directly engaged in SRampED. For example, any work related to equipment maintenance or repairs, materials-handling, and clerical and administrative support activities does not qualify under the proxy method. However, examples of tasks performed by a non-specialized employee who could qualify as directly engaged in SRampED include: operating a machine for the purposes of an experiment that requires the use of this machine feeding raw materials into a machine for the purposes of an experiment performing work such as welding, machining, mechanics, electrical work and plumbing where that work is required and is an integral part of an SRampED project (for example, construction and testing of a prototype) and performing other tasks that are directly in support and are an integral part of an SRampED project. 7.2 Supporting documentation and other evidence A claimant should be able to show that the salary or wages are for SRampED work performed by employees of the company on activities that are considered to be directly engaged in SRampED. When applying the expenditure allocation in a claim under the proxy method. the information system used by a claimant must capture directly engaged time. Other labour costs are covered by the prescribed proxy amount (PPA ) . Claimants should maintain information supporting the reasonableness of the allocation of directly engaged salary or wages, including: a description of the allocation method used the rationale for the selection of the allocation method, considering the claimants business environment and the internal controls that are available to test the allocations. For more information on the allocation of salary or wages to SRampED. please refer to section 13.0. Allocation of labour expenditures for SRampED as well as Appendix 2, Documentation and other evidence to support your SRampED claim, in the T4088, Guide to Form T661 Scientific Research and Experimental Development (SRampED ) Expenditures Claim . 7.3 Calculating the amount of the expenditures Under the proxy method. the portion of an expenditure made in respect of an expense incurred in the year for the salary or wages of an employee who is directly engaged in SRampED in Canada can only be deductible for SRampED purpose if it can reasonably be considered to relate to such work having regard to the time spent by the employee thereon. For this purpose where that portion is ASA of the expenditure, that portion shall be deemed to be the amount of the expenditures . Legislative Reference Income Tax Act Subclause 37(8)(a)(ii)(B)(IV) SRampED expenditures in Canada under the proxy method Directly engaged salary or wages 7.3.1 Portion of an expenditure for salary or wages The directly engaged salary or wages or portion thereof is calculated on the time spent directly engaged in SRampED relative to the total time worked. For example, if a salaried employee earning 100,000 per year spends all of their 1,800 regular hours directly engaged in SRampED and works an additional 600 hours of unpaid overtime performing general administrative duties, the directly engaged salary or wages are 75,000 (1,800 2,400 x 100,000). 7.3.2 Only the portion of the salary or wages that can reasonably be considered to relate to SRampED can be included The fact that an amount is included in the calculation of salary or wages of an employee directly engaged in SRampED does not necessarily mean that it represents salary or wages for SRampED purposes. Where the proxy method is used, the legislation clearly indicates that only that portion of salary or wages that is reasonably related to work that is directly engaged in SRampED can be allowed as an expenditure for SRampED purposes. The term relate means to show a logical or causal connection between to have relationship or connection (between two things). Accordingly, there must be a reasonable connection between the amount of salary or wages and the prosecution of SRampED. It should be noted that, in the case of employees who spend ASA of their time to the prosecution of SRampED. all of their time is considered to be related to the prosecution of SRampED . In order to determine if there is a reasonable link between an amount of salary or wages and the SRampED work being performed, the underlying reasons for paying the salary or wages would have to be determined and demonstrate how it is related to the SRampED . Bonus or remuneration based on profits paid or payable to an employee who is not a specified employee of a corporation has the capacity to be related to the prosecution of SRampED. and therefore could be an expenditure on or in respect of SRampED. For example, where a corporation is taking advantage of marginal tax rates by reducing the corporations taxable income to or below the small business deduction limit through the payment of bonuses or remuneration based on profits from income derived from normal business operations, the bonus or remuneration based on profit could be considered to have a reasonable link to the prosecution of SRampED . There would be no reasonable link between the expenditure and the prosecution of SRampED where, for example, an employee (where the ASA rules do not apply, see section 7.3.4 below) receives: salary, including a bonus, when the income that was used to pay the amount was not earned from the ongoing, normal activities of the business. This would include an amount paid to an employee that was earned from a capital transaction such as the sale of the business, the sale of shares or the sale of an asset, salary earned from a non-eligible activity (for example, a finders fee), or a bonus for the achievement of specific sales targets. Such amounts do not have the capacity of being allocated to SRampED (cannot be SRampED expenditures). In other words, the allocation of salary or wages to SRampED is made after such amounts are excluded from total remuneration. Legislative reference Income Tax Act Subclause 37(8)(a)(ii)(B)(IV) SRampED expenditures in Canada under the proxy method Directly engaged salary or wages 7.3.3 Example Reasonably be considered to relate to SRampED An employee who is directly engaged in the prosecution of SRampED 60 of the time receives a regular salary of 100,000 and a commission of 15,000 on the sale of a product. The amount for the commission is not an expenditure on SRampED as it is not directly linked to the SRampED work being performed. The amount of the commission does not have the capacity of being allocated to SRampED (cannot be SRampED expenditures). Therefore, only 60,000 could be allocated to SRampED (100,000 x 60). 7.3.4 All or substantially all When the portion of the expenditure represents ASA of the time spent by the employee on SRampED work, all of the expenditure is deemed to be on SRampED. However, there are restrictions concerning bonuses and remuneration based on profits of specified employees, as well as a salary cap for specified employees (see section 6.1.1 ). For example, subject to the specified employee rules, the salary or wages of an employee hired for SRampED purposes are considered ASA attributable to the prosecution of SRampED if 90 or more of this employees time is spent on the prosecution of SRampED . There should be some form of evidence to support the use of the ASA rule for each employee. The basis for applying the ASA rule is the tax year it is not based on a specific period during the tax year. The Act refers the portion of an expenditure made in respect of an expense incurred in the year for the salary or wages. Legislative reference Income Tax Act Subclause 37(8)(a)(ii)(B)(IV) SRampED expenditures in Canada under the proxy method Directly engaged salary or wages 7.3.5 Example All or substantially all An employee worked 90 of the time directly engaged in SRampED for the first 6 months of the tax year and worked in non-SRampED activities in the remaining 6 months. The employees salary for the tax year was 100,000. The directly engaged salary or wages (or portion) is calculated on the time spent directly engaged in SRampED relative to the total time worked in the year: in this case the allowable salary would be 45,000 (90 x 45 of 100,000). It would be incorrect to claim 100 of the employees salary for the first six months. 8.0 Undertakes, supervises, supports Traditional method Expenditures for salary or wages that are either all or substantially all (ASA ) to the prosecution of SRampED or directly attributable to the prosecution of SRampED can be claimed under the traditional method. For more information on the traditional method, please refer to the Traditional and Proxy Methods Policy. However, there are restrictions concerning bonuses and remuneration based on profits of specified employees as well as a salary cap for specified employees (see section 6.1.1 ). An expenditure directly attributable to the prosecution of SRampED includes the portion of the amount incurred for salary or wages of an employee who directly undertakes, supervises or supports the prosecution of SRampED that can reasonably be considered to be in respect of such prosecution. Legislative references Income Tax Act Subclause 37(8)(a)(ii)(A)(I) SRampED expenditures in Canada under the traditional method ASA Subclause 37(8)(a)(ii)(A)(II) SRampED expenditures in Canada under the traditional method Directly attributable Legislative reference Income Tax Regulation Paragraph 2900(2)(b) Employee remuneration Traditional method 8.1 Meaning of undertakes, supervises or supports Undertakes means performing experimentation. analysis and other related activities in the performance of work described in paragraphs (a) to (d) of the definition of SRampED in paragraph 248(1) of the Income Tax Act . that is basic research. applied research. experimental development or support work . Supervises refers to the day-to-day management of work described in paragraphs (a) to (d) of the definition of SRampED by an employee, not merely the supervision of employees who undertake or support SRampED work. It is expected that the performance of such work would require a significant technological background based on the employees academic or work experience, or both. Supervision for purposes of the directly attributable rules does not include the performance of managerial functions that relate to general administration. However, supervision could include some non-technological functions, for example, long-term strategic planning, contract administration, etc. that directly relate to the prosecution of SRampED. These functions would generally be performed in carrying out the other related duties of a technological supervisor of SRampED (a direct supervisor with technological expertise)see section 9.0 . The term supports describes the performance of any of the work described in paragraph (d) of the definition of SRampED and other technical work that relates to the prosecution of SRampED. The other technical work could include work performed by non-specialized employees (see section 7.1.1 ). Support work does not include the performance of clerical duties involved in carrying out SRampED. Salary or wages relating to clerical or administrative staff providing a service to SRampED employees could be included as SRampED overhead and other expenditures if they are directly related and incremental to the prosecution of SRampED (see section 9.3 ). Legislative reference Income Tax Act Subsection 248(1) Definition of SRampED Legislative references Income Tax Regulation Paragraph 2900(2)(b) Employee remuneration Traditional method Paragraph 2900(2)(c) Other expenditures directly related and incremental to the prosecution of SRampED Traditional method 8.2 Supporting documentation and other evidence The claimant must develop an appropriate allocation method for labour that is in part directly attributable to SRampED and in part attributable to non-SRampED activities. Under the traditional method. SRampED directly attributable salary or wages expenditures include both salary or wages of an employee who directly undertakes, supervises or support the prosecution of SRampED and salary or wages that is directly related to the prosecution of SRampED and that would not have been incurred had it not been for such prosecution, (directly related and incremental salary or wages). When applying the expenditure allocation in a claim under the traditional method, the information system used by a claimant must capture directly engaged time, as well as directly related and incremental time. See section 7.2 for comments regarding documentation requirements for the directly engaged salary or wages. Actual expenditures that are directly related and incremental to the prosecution of SRampED should be included in the claim (see section 9.0 ). The labour allocation method should provide support for the SRampED portion of these costs to be included in the claim. For more information on the allocation of salary or wages to SRampED. please refer to section 13.0 Allocation of labour expenditures for SRampED as well as Appendix 2, Documentation and other evidence to support your SRampED claim, in the T4088, Guide to Form T661 Scientific Research and Experimental Development (SRampED ) Expenditures Claim . 8.3 Calculating the amount of the expenditures Under the traditional method. expenditures directly attributable to the prosecution of SRampED include the portion of salary or wages incurred for an employee who directly undertakes, supervises or supports the prosecution of SRampED to the extent the amount incurred can reasonably be considered to relate to such prosecution . Also, where all or substantially all (ASA ) of the expenditure is attributable to the prosecution of SRampED in Canada, the portion is the amount of the expenditure. Legislative references Income Tax Act Subclause 37(8)(a)(ii)(A)(I) SRampED expenditures in Canada under the traditional method ASA Subclause 37(8)(a)(ii)(A)(II) SRampED expenditures in Canada under the traditional method Directly attributable Legislative reference Income Tax Regulation Paragraph 2900(2)(b) Employee remuneration Traditional method 8.3.1 Portion of an expenditure for salary or wages The portion of salary or wages amount referred to in the Regulations is generally calculated on the time spent directly undertaking, supervising, and supporting the prosecution of SRampED compared to the total time worked. Legislative reference Income Tax Regulation Paragraph 2900(2)(b) Employee remuneration Traditional method 8.3.2 Only the portion of the salary or wages that can reasonably be considered to relate to SRampED can be included Where the traditional method is used, the legislation clearly indicates that only an expenditure that can reasonably be considered to relate to the prosecution of SRampED can be allowed as an expenditure for SRampED purposes. There must be a reasonable link between the amount of salary or wages and the SRampED work being performed for an amount to be an allowable SRampED expenditure. For more information on this requirement, please refer to section 7.3.2 . 8.3.3 All or substantially all Where all or substantially all ( ASA ) of an employees time is spent on SRampED activities, the employee is considered to have spent all of the time on SRampED. Thus, the employees total salary or wages is treated as an allowable SRampED expenditure (subject to the salary cap for specified employees, see section 6.1.1 ). There should be some form of evidence to support the use of the ASA rule for each employee. For example, subject to the specified employee rules, the wages of an employee hired for SRampED purposes are considered ASA attributable to the prosecution of SRampED if 90 or more of this employees time is spent on the prosecution of SRampED . The basis for applying the ASA rule is the tax year it is not based on a specific period during the tax year. The Act refers the portion of an expenditure made in respect of an expense incurred in the year for the salary or wages. The ASA rule only applies where an expenditure of a current nature is used 90 or more for the prosecution of SRampED work. Therefore, in the case of salary or wages, the ASA rule can only apply to the salary or wages of an employee who directly undertakes, supervises or supports the prosecution of SRampED as described in section 8.1. The ASA rule does not apply to other employees such as clerical and administrative staff providing a service to SRampED employees. For more information on salary or wages for clerical and administrative staff providing a service to SRampED employees, please refer to section 4.1 of the SRampED Overhead and Other Expenditures Policy . Legislative reference Income Tax Act Subclause 37(8)(a)(ii)(A)(I) SRampED expenditures in Canada under the traditional method ASA 8.4 Salary or wages under the traditional method and Form T661 Salary or wages incurred for an employee who directly undertakes, supervises or supports the prosecution of SRampED are directly attributable to SRampED. For the purposes of Form T661, Scientific Research and Experimental Development (SRampED ) Expenditures Claim. these expenditures are treated as being directly engaged salary or wages. However, under the traditional method. the portion of other salary or wages of employees who directly undertake, supervise, or support the performance of SRampED but who are not directly engaged in SRampED can also be claimed as SRampED overhead and other expenditures on line 360 of Form T661 (see section 9.0 ). Refer to Table 5 in the T4088, Guide to Form T661 Scientific Research and Experimental Development (SRampED ) Expenditures Claim. for an example of such tasks. Additionally, expenditures that are directly related and incremental to the prosecution of SRampED are directly attributable to SRampED. Salary or wages incurred for clerical and administrative personnel providing a service to SRampED employees (see section 9.3 ) could be considered to be directly related and incremental to SRampED depending on the facts of the case. These types of expenditures are also reported on line 360 of Form T661 as SRampED overhead and other expenditures and cannot be claimed when using the proxy method . 9.0 Administrative salary or wages Traditional method This section explains the rules and clarifies which administrative salary or wages are directly related to the prosecution of SRampED under the traditional method of calculating investment tax credits. The comments below apply to all claimants, including dedicated SRampED performers. 9.1 Directly attributable tests Directly related and incremental salary or wages To be allowable as an expenditure directly attributable to the prosecution of SRampED. an expenditure, or portion of an expenditure, for administrative salary or wages must satisfy two tests: It must be directly related to the prosecution of SRampED in Canada and the expenditure would not have been incurred had such prosecution not occurred (incremental) By virtue of the term directly related, all the time spent by administrative staff would not be directly related to the prosecution of SRampED. unlike the time spent by staff hired to perform their duties specifically in such prosecution. However, the terms portion and directly related in the Regulations indicate that some duties of the administrative staff would meet the tests, the determination of which would be based on a finding of fact. The work performed by a particular employee must connect with (in other words relate to), and be done without an intervening step or intermediary (in other words directly) between the employee and, the SRampED work, or the SRampED staff, or the machinery equipment used by staff to perform SRampED . Expenditures for administrative salary or wages that do not meet the above tests are not expenditures on SRampED under the Income Tax Act . Legislative reference Income Tax Regulation Paragraph 2900(2)(c) Other expenditures directly related and incremental to the prosecution of SRampED Traditional method 9.2 Application of the rules The portion of salary or wages for hands-on work performed by administrative staff is an expenditure directly attributable to SRampED and could qualify as salary or wages of an employee who directly undertakes, supervises or supports the prosecution of SRampED. However, work performed by administrative staff with no technological background generally does not qualify as hands-on work. In this case, an analysis of the duties performed is required to determine the direct linkage to SRampED work. If the expenditure for administrative salary or wages is directly related and incremental to the prosecution of SRampED it can be claimed as SRampED overhead and other expenditures . There must be a direct linkage of expenditures for administrative salary or wages to specific SRampED work, staff or machinery equipment. To make this determination in respect of a particular employee, it is necessary to examine the duties performed by the employee. For example, where a vice president (VP ) of a company is required to hire a Personnel Manager who, in turn, is required to hire SRampED staff, there would be no immediate contact between the VP and the SRampED or SRampED staff. In this situation, no portion of the VP s time could be said to meet the directly related test, although there may be an indirect relationship. On the other hand, any time spent by the Personnel Manager in hiring SRampED staff could be considered to meet the directly related test. Expenditures for tasks that are attributable entirely to non-SRampED work would not qualify. For example, non-SRampED work includes the functions of planning (non technological), direction, control, co-ordination, systems, or other functions at a managerial level. For more information on the directly related and incremental tests under the traditional method, please refer to sections 3.0 to 4.1 of the SRampED Overhead and Other Expenditures Policy . Legislative reference Income Tax Act Subclause 37(8)(a)(ii)(A)(II) SRampED expenditures in Canada under the traditional method Directly attributable Legislative references Income Tax Regulation Paragraph 2900(2)(b) Employee remuneration Traditional method Paragraph 2900(2)(c) Other expenditures directly related and incremental to the prosecution of SRampED Traditional method 9.3 Clerical and administrative staff providing a service to SRampED employees A portion of the salary or wages for clerical and administrative staff providing a service to SRampED employees may also qualify for SRampED purposes if the functions performed are nontechnological and aid the ongoing SRampED claimed in the year, and the salary or wages of the clerical and administrative staff providing the service are directly related and incremental to the prosecution of SRampED . For more information on salary or wages for clerical and administrative staff providing a service to SRampED employees, please refer to section 4.1 of the SRampED Overhead and Other Expenditures Policy . Legislative reference Income Tax Act Subclause 37(8)(a)(ii)(A)(II) SRampED expenditures in Canada under the traditional method Directly attributable Legislative reference Income Tax Regulation Paragraph 2900(2)(c) Other expenditures directly related and incremental to the prosecution of SRampED Traditional method 10.0 Salary or wages of employees carrying on SRampED outside Canada Claimants can earn SRampED investment tax credits (ITC s) on permissible salary or wages for SRampED work carried on outside Canada after February 25, 2008. The SRampED work carried on outside Canada must be directly undertaken by the employees of the claimant, and must form part of the SRampED carried on in Canada by the claimant. Permissible salary or wages incurred by a claimant in a tax year is limited to 10 of the total of salary or wages for the SRampED carried on in Canada. The permissible salary or wages for the work carried on outside Canada is deemed to be an expenditure made in Canada by the claimant. Accordingly, such expenditures qualify for the SRampED ITC and are excluded from the application of the rules for SRampED carried on outside Canada for which no ITC can be earned. Legislative references Income Tax Act Subsection 37(1.5) Salary or wages for SRampED outside Canada Limit determined Subsection 37(2) Research outside Canada 10.1 Calculation of permissible salary or wages for SRampED work carried on outside Canada In order to determine the amount that can be claimed as the permissible salary or wages for SRampED carried on outside Canada, claimants will first have to calculate the two amounts A and B below. The lower of amount A or B can be claimed as the permissible salary or wages for SRampED carried on outside Canada. Amount A Total of salary or wages for SRampED work carried on outside Canada The salary or wages that can be claimed for SRampED work carried on outside Canada must meet the following criteria: the costs were incurred after February 25, 2008 the SRampED work was directly undertaken by an employee of the claimant and not performed by a contractor the employee who performed the SRampED work was a resident of Canada at the time the expense was incurred the work was related to a business of the claimant the SRampED work carried on by the employee outside Canada was an integral part and solely in support of the SRampED work carried on in Canada (see section 10.2.1 ) and the salary or wages paid were not subject to income or profits tax from another country (see section 10.2.2 ). Amount B 10 of the total of SRampED salary or wages for SRampED carried on in Canada This limit is calculated as 10 of the total salary or wages claimed for SRampED carried on in Canada (see section 10.2.3 ). Note: Although the Income Tax Act refers to an expense incurred in the year for salary or wages paid to an employee in respect of SRampED. it is the practice of the CRA to use the amount on line 306 of Form T661 ( expenditure incurred ) for the purposes of determining the 10 limit. For the tax year that includes February 26, 2008, the 10 limit is prorated based on the number of days after February 25, 2008, that are in that tax year over the total number of days that are in that tax year. (Number of days in the tax year after February 25, 2008) (Total number of days in the tax year) Legislative reference Income Tax Act Subsection 37(1.5) Salary or wages outside Canada Limit determined 10.1.1 Example Company As tax year end is September 30, 2008. Company A claimed one SRampED project carried out in Canada during the tax year. Company A has five employees (other than specified employees) performing SRampED and each are paid 9,000 per month. All employees are working 100 of their time on the SRampED project and they all reside in Canada. Company As SRampED salaries for 2008 tax year are 540,000 (9,000 x 12 months x 5 employees 540,000). Employee 1 performed SRampED work outside Canada in November 2007 (30 days) Employee 2 performed SRampED work outside Canada in March 2008 (31 days). The permissible salary for work carried on outside Canada is the lesser of A or B: Amount A Calculated 9,000 Eligible salary for Employee 2 only as Employee 1 performed SRampED work before February 25, 2008. Amount B Calculated 31,092 (total salary or wages for SRampED performed in Canada) x (10) x (proration for the number of days in the tax year after February 25, 2008 total number of days in the tax year) (540,000 - 18,000) x (10) x (218 366) Based on the above calculation, the amount that can be claimed as salary or wages for work carried on outside Canada on line 307 of Form T661, Scientific Research and Experimental Development (SRampED ) Expenditures Claim. is 9,000. 10.2 Applying the rules 10.2.1 Meaning of solely in support The SRampED work carried on outside Canada by the claimant that is basic research, applied research, experimental development or work described in paragraph (d) of the definition of SRampED in subsection 248(1) of the Act would qualify as being in support provided the work is an integral part and is solely in support of the SRampED work carried on in Canada by the claimant. The question whether an activity performed outside Canada is solely in support of the SRampED work carried on in Canada is a question of fact to be determined on a case by case basis. Where an activity is in support of both an SRampED project carried on in Canada and another SRampED project carried on outside Canada, that activity would not be considered to be solely in support of the SRampED work carried on in Canada. Where an activity performed outside Canada supports work that involves SRampED carried on in Canada and at the same time supports non SRampED work (dual purpose activity) performed in Canada, that activity would not be considered to be solely in support of the SRampED work carried on in Canada. 10.2.2 Salary or wages paid were not subject to income or profits tax from another country Salary or wages paid to an employee for SRampED work carried on outside Canada can be included as permissible salary or wages only if the claimant reasonably believes that the salary or wages is not subject to an income or profits tax imposed, because of the employees presence or activity in a country other than Canada, by the government of that particular country. This rule takes into account only those taxes that are applied because of an employees presence or activities in a foreign countryand not, for example, a tax that applies to a countrys citizens regardless of where they live or work. To determine whether the salary or wages paid to an employee for work performed outside Canada is subject to an income or profits tax imposed by a foreign government, the claimant should consider the tax treaty between Canada and the foreign country in which the SRampED work in support of the SRampED in Canada is performed. Usually salary or wages paid to an employee for SRampED work carried on outside Canada can be included as permissible salary or wages if the employee sojourns only a short period of time in the foreign country. As stated in paragraph 25 of Interpretation Bulletin IT-270R3, Foreign tax credit: The location of the source of an individuals office or employment is considered to be the place where he or she normally performs the related duties. If those duties require the individual to spend a significant part of the time in a country other than Canada, the individual may be subject to tax in that foreign country on a portion of the remuneration. However, it is a question of fact whether salary or wages paid to an employee is not subject to an income or profits tax imposed by a foreign jurisdiction. The onus is on the claimant to make this determination. If this condition is not satisfiedfor example, if the claimant knows or has reason to believe that the amount is being taxed in the foreign country where its employees are carrying out the SRampED salary or wages paid to the employee would not be included in the amount of the permissible salary or wages (see section 10.1 ). 10.2.3 Determining amount B Limit Amount B is calculated as 10 of the total salary or wages claimed for SRampED carried on in Canada. The 10 limit is calculated on the total allowable salary or wages for SRampED in Canada and not only on the salary or wages relating to the project(s) carried on in Canada that the work outside Canada solely supports. For example, if the claimant carries out two SRampED projects in Canada and testing outside Canada is required for one of the projects, the total salary or wages expenditures for SRampED in Canada is taken into account for the calculation of the 10 limit. Under the traditional method, Amount B can include the portion of other salary or wages of employees who directly undertake, supervise, or support the SRampED that can be claimed as SRampED overhead and other expenditures on line 360 of Form T661 (salary or wages of employees not directly engaged in the prosecution of SRampED ). See Table 5 in the T4088, Guide to Form T661 Scientific Research and Experimental Development (SRampED ) Expenditures Claim. for examples of such tasks. Other salary or wages that are considered SRampED overhead and other expenditures, such as the salary or wages of clerical staff providing a service to SRampED employees claimed on line 360 of Form T661, are not included in the total salary or wages for the purpose of calculating the 10 limit. Legislative reference Income Tax Regulation Paragraph 2900(2)(b) Employee remuneration Traditional method 10.3 How to calculate permissible salary or wages for work carried on outside Canada for Form T661 The calculation of permissible salary or wages for SRampED work carried on outside Canada (see section 10.1 ) is determined with respect to the total amount of salary or wages for the SRampED inside Canada. The calculation does not distinguish between specified employees and employees other than specified employees. However, the way Form T661, Scientific Research and Experimental Development (SRampED ) Expenditures Claim. is structured, the total amount of permissible salary or wages for SRampED outside Canada should be allocated between employees other than specified employees (line 307) and specified employees (line 309). The total of lines 307 and 309 cannot exceed 10 of the total amount of salary or wages for the SRampED inside Canada (line 306 of Form T661). Thus, when an amount is claimed on line 307 of Form T661 (for other than specified employees) the amount that may be claimed on line 309 (for specified employees) cannot exceed: 10 of the amount on line 306 of Form T661 less the amount claimed on line 307. Legislative references Income Tax Act Subsection 37(1.4) Salary or wages for SRampED outside Canada Subsection 37(1.5) Salary or wages for SRampED outside Canada Limit determined Subsection 37(2) Research outside Canada Subsection 37(9) Remuneration based on profits or bonus for specified employees 11.0 Unpaid salary or wages Accrued salary or wages are used to calculate the portion that is directly attributable to or directly engaged in SRampED. If the remuneration remains unpaid 180 days after the end of the year in which the expense was incurred, the expense is deemed not to have been incurred in the year but rather in the year in which the amount is paid. Where the proxy method is being used, prior unpaid amounts that are deemed to be incurred in the year actually paid are excluded from the directly engaged salary base for the purpose of calculating the prescribed proxy amount (PPA ). This eliminates the possibility of the PPA approximating SRampED overhead and other expenditures using salary or wages relating to another year. In applying these rules, the CRA considers a payment made on the 180th day to have been made within the time limit. These rules apply to both arms length and non-arms length transactions. However, they do not apply to the following, that if received, would be included in the recipients income : a reasonable vacation or holiday pay, or a deferred amount payable under a salary deferral arrangement as defined in subsection 248(1) of the Income Tax Act . Legislative reference Income Tax Act Subsection 78(4) Unpaid remuneration and other amounts Legislative reference Income Tax Regulation Subsection 2900(9) Exclusions to salary base 11.1 Identification of unpaid salary or wages on Form T661 A claimant must identify, on line 315 of Form T661, Scientific Research and Experimental Development (SRampED ) Expenditures Claim. for a particular tax year, an expense in respect of unpaid salary or wages that was not paid within 180 days of the tax year end, in order for the expense to be deductible as an SRampED expenditure in the year in which it will actually be paid. In the year the expenditure is paid, it has to be reported on line 310 of Form T661. Legislative reference Income Tax Act Subsection 37(11) Filing requirement 11.2 Evidence of payment Whether accrued and unpaid remuneration is actually paid within the 180-day period involves a finding of fact that can only be established after examining all the evidence that would support such a conclusion. The best evidence of payment is that the related payroll withholdings were remitted on time. Source deductions must generally be remitted within 15 days after the month in which the amount was withheld. However, this is not the only acceptable evidence of such payment. Other evidence that would corroborate the payment of the wages would include: the issuance of a T4 slip to the employee the reporting of the income by the employee the actual payment of the amount (by cheque, cash, or journal entry crediting the employees account with the payer) the directors resolutions and other audit evidence which would include the overall condition of the employers books and records, the historical practice with respect to accruing salary or wages, and the credibility of the payer and employee. An ordinary promissory note is generally regarded as a promise to pay a debt at a later date, and not as payment of the debt on the date on which the note was issued. However, an amount may be paid by a promissory note if an agreement between the parties clearly indicates that the note was accepted as absolute payment. 11.2.1 Unpaid amounts vs. reserve No deduction is allowed for an amount as, or on account of, a reserve, a sinking fund, or a contingent liability unless it is expressly permitted by the Act. In order for an expense that remains unpaid at the end of a tax year to be deductible for tax purposes, it must constitute a genuine liability for the claimant. If such an unpaid amount does not constitute a genuine liability, no deduction is allowed and the rules for unpaid salary, wages or other remuneration do not apply. For a genuine liability to exist there must be an enforceable claim by the creditor with a reasonable expectation that the debt will in fact be paid by the debtor. More details on unpaid amounts can be found in Interpretation Bulletin IT-109R2, Unpaid Amounts . Legislative reference Income Tax Act Paragraph 18(1)(e) Reserves 12.0 Other issues related to salary or wages 12.1 Employee vs. self-employed The criteria used by the CRA to determine whether an individual is an employee or self-employed have been established by the courts. The question to be determined is whether the contract between the parties is a contract of service . which is evidence of an employer employee relationship, or a contract for services . which indicates a client and independent contractor relationship. Generally, a contract of service exists if the person for whom the services are performed has the right to control the amount, the nature and the management of the work to be done, as well as the manner of completing the work. A contract for services exists when a person is engaged to achieve a defined objective and is given all the freedom required to attain the desired result. The contract, which sets out the rights and obligations of both parties, provides important information in determining the type of relationship that exists. However, even more important than the contract is the actual circumstances surrounding the performance of services and whether such findings of facts agree with what is stated in the contract. Thus, the determination of whether there is an employer employee relationship requires a review of the facts of each case. There is no single conclusive test that can be universally applied to determine whether a person is an employee or is self-employed. The CRA makes every effort to ensure that taxpayers are fully aware of its administrative practices and interpretations. In this regard, the criteria the CRA uses to determine whether an individual is an employee of a particular taxpayer or is self-employed have been published in Guide RC4110, Employee or Self-Employed. which is available on the CRA s Web site. This guide also includes the relevant jurisprudence with respect to this issue. In addition, taxpayers wishing to resolve employee self-employed issues may seek the assistance of the CPP EI Rulings Division at their local tax services office. 12.2 Determining the employment status of an individual For salary or wages expenditures to be included in the claimants SRampED claim, it must be incurred in respect of its own employees to perform SRampED. As stated in the Guide T4001, Employers Guide Payroll Deductions and Remittances. If you or a person working for you is not sure of the workers employment status, either party can request a ruling to have the status determined. A request for a ruling can also be made for determining who the true employer is. The request should be made to the CPP EI Rulings Division at the local tax services office. For more information on employment status, please refer to the Guide RC4110, Employee or Self-Employed 12.3 Employees of a related corporation Confusion may occur with respect to who is in fact performing SRampED when two or more companies that do not deal at arms length with each other use each others resources (employees) to perform SRampED . For salary or wages expenditures to be included in the claimants SRampED claim, it must be incurred in respect of its own employees to perform SRampED. Salary or wages of an employee of a related company that performed SRampED on behalf of the claimant cannot be claimed by the claimant. In such a situation, a non-arms length contract situation would exist between the claimant and the related company. It is the practice of the CRA to consider work performed by the employees of the related corporation as being SRampED if the following conditions are met: the work is performed by the related corporation (or partnership) at a time when it does not deal at arms length with the claimant, and the work would be SRampED if it were performed by the claimant. When these conditions are met, the amount paid by the claimant to the non-arms length company to perform SRampED on behalf of the claimant can be treated as a non-arms length SRampED contract. For more information on SRampED contracts, please refer to the Contract Expenditures for SRampED Performed on Behalf of a Claimant Policy . The related corporation would have to file a Form T661, Scientific Research and Experimental Development (SRampED ) Expenditures Claim. and the use of the Form T1146, Agreement to Transfer Qualified Expenditures Incurred in Respect of SRampED Contracts Between Persons Not Dealing at Arms Length. could be considered for the transfer of the qualified SRampED expenditures. For more information on the transfer of qualified SRampED expenditures, please refer to the Total Qualified SRampED Expenditures for Investment Tax Credit Purposes Policy . Legislative Reference Income Tax Act Subsection 37(13) Non-arms length contract Linked work 13.0 Allocation of labour expenditures for SRampED Many SRampED claimants have information systems that capture information about SRampED work and related costs as a project progresses. These systems can be electronic or paper based and may include a variety of methods of capturing information about the SRampED labour for the purposes of calculating SRampED salary or wages. Where formal systems have not been implemented, claimants can determine SRampED salary or wages using appropriate labour allocation methodologies. This section is intended to provide guidance on the elements of such methodologies and to provide an illustration of a sample application. This section may be used by claimants for preparing the labour expenditure portion of their SRampED claims. This section does not address technical documentation for SRampED work. The allocation methods outlined here are for illustrative purposes only. Other approaches may be acceptable, as long as they are reasonable within the context of a claimants research and development (RampD ) environment, are documented, and are effectively and consistently applied. The suggested approaches can be used with either the proxy method or the traditional method . 13.1 Cost allocation methods An SRampED cost allocation method is a systematic approach to determining which expenditures, or portion of expenditures, relate to SRampED work. A claimant must be able to show that the cost allocation method used is based on a systematic approach, and provide a reasonable level of accuracy in calculating the SRampED expenditures. Documentation should be kept to identify the key elements of the cost allocation method, including the controls that were used in preparing the claim. The level of detail and sophistication of books and records will depend on many factors, such as the size of the claimants organization, the claimants knowledge of SRampED policies and practices, and the size of the claim. A small business may have less sophisticated financial control systems than a large company, due to the nature of its business or because of cost constraints. A first-time claimant may have an informal system of calculating SRampED labour expenditures, while an experienced claimant may have a more sophisticated system. Where a large organization may rely on a combination of the methods discussed in this chapter, some small businesses may have to rely on informal, naturally generated information to support their allocation of labour costs to SRampED projects. In all cases, documentation of the labour effort and the related financial information is required to support the reasonableness of the expenditures included in a claim. 13.2 Research and development environment All cost allocation methods use information and documentation that comes from the claimants information systems. The CRA recognizes that the RampD environment will influence the way information is gathered and summarized. The nature and sources of available information will be a key consideration in developing an appropriate labour allocation method. For illustrative purposes, the following four RampD environments are used to show appropriate labour allocation methods. The four environments discussed in detail in section 13.5 are as follows: distinct well-defined RampD projects dedicated RampD environments early stage or start-up business shop floor RampD . The methods used to allocate labour expenditures to SRampED in these four RampD environments can be applied to other real-life RampD environments. 13.3 Support for labour allocation The labour allocation must be supported by evidence that: the allocation method is appropriate in the companys environment the allocation method is consistent with the Income Tax Act and the administrative practices of the CRA and the allocation system is functional throughout the year. There are generally three levels at which information can be summarized: Each level offers a different view of the SRampED project. All the levels may provide a reasonable allocation of labour expenditures to an SRampED project provided they are part of an information system that includes controls that can be tested to evaluate the materiality and accuracy of the results. In some cases, it will be necessary for the CRA to review information at more than one level to properly evaluate whether the allocation method is reasonable or not. 13.3.1 High-level information (corporate or strategic concept level) The documentation of a businesss overall corporate and strategic objectives is referred to as high-level information. High-level information is generated by the conceptual high-level management processes and systems that businesses (especially large businesses) use for project management and cost control. For example, the strategic planning process, cost allocation and cost control systems, and project planning and project evaluation processes may all produce information that is relevant and useful in shaping and proving SRampED claims. High-level information may provide context for the allocation method and may, in some circumstances, contain enough information to support a claim and no further review is needed. However, medium or low level information should be available to support high-level information. 13.3.2 Medium-level information (project level) Information related to specific work efforts within a project or subproject is referred to as medium-level information. This includes management processes associated with specific work efforts or projects undertaken by the business. This information supports the information generated by the high-level systems. Medium-level information is generated at the project level and generally relates to a businesss documentation of specific work efforts. Specific project plans that break projects into components or subprojects would be an example of medium-level information. These project plans could be revised as a result of the SRampED process. In some businesses, these work efforts are documented using financial reports (budget to actual), Gantt charts, time lines, resource allocation or utilization summaries, specific project cost control systems, and supervisor summaries for project team members. There should be a clear link between the SRampED project objectives and the work undertaken by the members of the project team. Documents should identify all employees involved in an SRampED project and should give enough information to identify SRampED work that is included in the claim. A small sample of medium-level information should show the relevance of the high-level information and support the allocation methods that the claimant has used. 13.3.3 Low-level information (activity level) Information related to individual tasks is referred to as low-level information. In some cases, information may be summarized at the lower level tasks undertaken to complete major work. Tasks can be documented with such things as resource allocation or utilization summaries, time sheets, and personal logs. An effective system of documenting tasks records hours worked on a project-by-project basis. There should be a clear link between the SRampED project objectives and the tasks undertaken by the members of the team. 13.4 Sources of supporting information The following is a list of potential sources of supporting information that could be used by claimants to support an allocation of labour expenditures to an SRampED project. The objective is to provide key facts including: the names of the employees performing the SRampED work confirmation of employment (hire and termination dates) verification that the individual is an employee and not a contractor identification of specified employee. In addition, appropriate allocation methodologies can be used to determine the number of hours an employee spent working in SRampED. When appropriate and effective controls are in place, each of the sources identified below may provide the information required. In some cases, more than one source of supporting information may be required to evaluate whether the labour allocation is reasonable or not. 13.4.1 Development plans The resource-planning element of a project schedule plan may identify the resources associated with specific work to be undertaken in the claim period. Where the work relates to the technological or scientific objectives of the SRampED project and the plan can be compared to actual results or other controls, one may be able to rely on these planning records to allocate labour to an SRampED project. 13.4.2 Supervisors summaries Project managers or technical supervisors often prepare periodic weekly, monthly or quarterly summaries. The summaries document the amount of SRampED undertaken by the RampD teams for a given period. A person who has direct involvement in managing the work of SRampED personnel should prepare such summaries. It is expected that the summaries would identify the significant SRampED and any non-SRampED work undertaken during the period in question. To be effective, the summaries should be updated regularly. 13.4.3 Time sheets Individual time sheets that allocate time to SRampED and non-SRampED work are a good source of supporting information. Time sheets can be used to show the reasonableness of an SRampED labour claim. Time sheet codes may be based on business projects that do not align to SRampED projects. In such cases, other evidence may be required to support the SRampED labour allocation. 13.4.4 Naturally generated information Claimants may rely on other information that is naturally generated while performing the SRampED work. This includes: contracts planning documents project specifications project objectives and milestones descriptions of problems to be solved resource allocation records and budgets written correspondence with customers and suppliers minutes of meetings supervisor summaries project, laboratory, or personal notebooks progress and final project reports organizational charts. An allocation of labour based on naturally generated information must give the CRA a reasonable level of assurance that there is minimal risk of material error in the labour expenditure being allocated to an SRampED project. The claimant should be able to show support for the claim in the documents and other information. 13.5 RampD environment The business environment in which SRampED is carried out will influence the nature and sources of evidence that are available to support the labour allocation methodology. The four RampD environments identified in section 13.2 are described below, along with sample labour allocation methods that might be appropriate in each environment. 13.5.1 Distinct well-defined RampD projects This environment is found in situations where the claimants organization assigns personnel and resources to specific RampD projects. Projects have a defined start date, targeted finish date, and are based on well-defined technological objectives. Where the core project is SRampED and support work is necessary to resolve the technological challenges, the work effort can be allocated completely to the project. Controls to identify and segregate non-SRampED work, such as negative time reporting, provides an indication that the labour allocation is reasonable. Supporting information in this setting may include a development plan that can be used to verify job functions. Where labour resources are used in many projects and in both SRampED and non-SRampED. labour allocations can be made based on such things as: resource allocation or utilization summaries project cost control systems supervisor summaries Gantt charts time lines. 13.5.2 Dedicated RampD environments In principle, these are environments where a defined group of personnel are focused exclusively on RampD for new products or processes, usually to the exclusion of all other business activities of the business. A dedicated research department may be found in any industry, but is more likely to be found in a large multidisciplinary business. It should be noted that a dedicated RampD department might be involved in SRampED and non-SRampED work. Personnel in other areas of the company may also do SRampED work. The claimant should be able to identify the SRampED performed by the dedicated research department. The claimant should also be able to distinguish allowable SRampED labour expenditures from the total expenditures of the dedicated research department. Additionally, the claimant should be able to provide documentation with appropriate controls supporting the allocation of SRampED labour expenditures. A negative time reporting system that captures non-eligible labour expenditures can be quite effective in these settings. Supporting information in these environments can include such things as: supervisor summaries resource allocation or utilization summaries Gantt charts time lines time sheets. 13.5.3 Early stage or start-up business Early stage or start-up companies do RampD to develop new products or processes. In some situations, personnel may be focused on one SRampED project. If so, the simplest approach may be to identify employees working on non-eligible work and subtract that portion of labour expenditures from the total labour expenditures. In this type of environment, a claimant should be able to identify the employees performing SRampED within the business operations. The claimant should be able to distinguish allowable SRampED labour expenditures from the total operating costs of the business. Additionally, the claimant should be able to give information supporting the allocation of personnel to an SRampED project. Documentation in this setting can include such things as: job descriptions development plans Gantt charts supervisor summaries time sheets. 13.5.4 Shop floor SRampED Shop floor SRampED commonly occurs in a variety of industry sectors. This type of SRampED involves creating new, or improving existing, materials, devices, products, or processes in the field or at a commercial facility. Shop floor SRampED can involve a variety of employees from different parts of an organization. An SRampED project of this nature could involve shop floor supervisors, engineers, machine operators, mechanics, and welders. Individuals may report their time using time sheets, a time clock system, or other methods. Because of the variety of employees involved in shop floor SRampED. it is advantageous to claimants to develop a process to collect information at the start of a project, otherwise difficulties may be encountered in supporting the time an employee spends performing SRampED work. 13.6 When is a labour allocation method reasonable The use of an allocation method in determining SRampED labour expenditures will generally be acceptable to the CRA. as long as there is supporting information to establish the reasonableness of the method. Allocations should be supportable through effective controls and information that can be used to test the reasonableness of the amount claimed. The CRA is available to help claimants identify the type of supporting information and control systems needed to support a claim for SRampED labour expenditures. 13.7 Example of an allocation method The following example refers to a small start-up operation, which has developed simple allocation approaches to determine its SRampED labour costs. The approaches used in this example are not the only acceptable methods for allocating labour expenditures to an SRampED project. The methods a company uses to allocate labour expenditures to SRampED work must be tailored to the way it collects and manages financial information. Other methods may be more appropriate in other industry sectors, but the concepts described in this example will be similar. Aco is a venture-backed start-up company developing a Web-based supply chain management software program that is fully customizable by the customer. The company is developing a new architecture that will serve as the base for a family of products. The development of the initial architecture meets all the requirements to be considered SRampED . During the first two months after incorporation, the four founders worked together on the architecture from the home of one of the founders. During this period, each of the developers worked on source code that was annotated and accompanied by a complete revision history. Although a great deal of progress was made, in the third month it was apparent that the seed funding would not take the company far enough. Over the next two months, one of the founders focused on approaching investors to raise more financing instead of working on the experimental development . By the end of the fifth month, the company had raised 10 million dollars and they were ready to start ramping-up the company. Over the next month, 30 employees were to be hired. The first was a system architect who became responsible for the overall development of the architecture. Three of the founders stayed heavily involved in the experimental development. The fourth founder continued to develop the business and participated only in the technical strategy design meetings for the ongoing experimental development. Of the 30 employees added, 3 worked in finance and administration, 5 in sales and marketing, 3 in customer care, 1 in developing technical and user documentation, 4 in quality control, 10 in the research group, and 4 in product engineering. The system architect knew about the SRampED Program. During the one-month ramping period, the architect began to write periodic summaries that were to be produced monthly. The summaries allocated the work as SRampED undertaken for the given period. The report identified both the SRampED effort and the non-SRampED work during the period in question. By the sixth month, the RampD group found it necessary to use project scheduling and resource allocation tools to manage the experimental development process. These tools permitted the team to identify the resources associated with the specific work. Also in the sixth month, the finance group implemented a time-sheet system. The system was intended to address the overall needs of the company. The time sheet data would enable the finance group to track total hours worked along with employee vacation, holiday and sick leave. The data would provide the information necessary to allocate expenditures to cost centres including experimental development (in other words, the system would be used to allocate researchers time to projects). In addition, the system would provide the data necessary to bill customers for consulting services after the product was released. By the eighth month, the company had signed contracts with a number of customers and the customer care group and product-engineering group were busy installing and improving an early release of the software. The company was not large enough to do a complete evaluation in-house. The company needed to install the software with a customer in order to evaluate it. The product was still clearly in development, because end-user technical requirements were being developed and analyzed by both the customer care team and product-engineering team to be included in future more advanced versions of the technology. At the end of the year the finance group was responsible for calculating the expenditures incurred in the year on eligible projects. The following is a summary of the resources by department: The standard work week for the corporation is 37.5 hours. Each employee is given three weeks of vacation. The total working hours in a year are 1837.5 hours (37.5 x 49). 13.7.1 The approach In this particular year, there was no single system that the controller could rely on to quickly get the costing associated with the SRampED projects. It was apparent that a variety of allocation methods and control systems would have to be used to calculate the labour expenditures associated with the projects. The controller had access to records of the salary or wages paid to the employees for the year from the payroll service. The controller set up a spreadsheet listing all of the employees along with the salary or wages data received from the payroll service. The controller then proceeded to take a look at each employee to allocate the salary or wages to SRampED and non-SRampED work. She also considered what information would be available to serve as a control should a review occur along with information on how to set up a better system in the future. The controller planned to file a claim using the proxy method to calculate the SRampED tax incentives. The controller determined that three of the founders worked on the architecture throughout the year. She explained to these individuals that for salary or wages related to ongoing SRampED projects claimed in the year, a number of things were considered as directly engaged. These things included: experimentation and analysis support work direct supervision of employees performing experimentation and analysis technological documentation for internal use technological planning and analysis. The controller asked if any of the three founders did other tasks that consumed more than 10 of their effort in the year. The founders reviewed their calendars, diaries, and notebooks, and concluded that they had not performed non-SRampED work that consumed more than 10 of their effort in the year. The controller considered these to provide a reasonable control that could serve to cross check for their conclusions during a CRA review. She concluded that these three founders were all or substantially all directly engaged in SRampED. and therefore 100 of the effort of three of the founders should be included in the SRampED claim. A similar approach was used with the fourth founder. After reviewing the founders diary, the controller noted that the founder had spent two months, 17 (2 12) of the time, working alongside the other founders on the architecture or doing SRampED. After the first two months, the work switched to non-SRampED business activities such as securing financing. The founder stated that he participated in all the technical strategy meetings providing technical direction and estimated that his total involvement in SRampED was about 50 of his time. The controller recognized that this was an estimate and may not be acceptable to the CRA . As a result, the controller tried to identify another approach to quantify the labour allocation. She noted that the technical strategy meetings occurred on Tuesday of every second week and that they typically lasted for three hours. That meant the fourth founder spent 60 hours in the last 10 months (3 hours x 2 (twice a month) x 10 months) involved in SRampED or about two weeks effort. The controller confirmed the reasonableness of this approach with the founder. This was much lower than the 50 level, but did increase the level to 21 (2.5 12 months). Even though there were no time records for these meetings, the controller thought that the methodology was reasonable and claimed on this basis. As a final step, the controller noted that each of the founders retained enough ownership interest to be specified shareholders and that this fact would need to be considered in any calculation. Research and development The RampD group operated in a dedicated environment and only spent their time performing SRampED work. The controller planned to cost 100 of the salary or wages of each RampD team member to the project, but first planned to discuss her approach with the system architect to make sure the team members were not performing other activities. The system architect reviewed his monthly summaries and agreed with the approach in general, with two exceptions. In one case, a team member took sick leave for two months and was not available for the project. The controller planned to reduce the percentage to account for the sick leave. In the second case a team member was loaned to the customer care group for three months. Again, the controller planned to reduce the percentage for that team member to account for the non-SRampED work. Subject to those adjustments, the software architect agreed that the RampD team was directly engaged in the project, and that 100 of the salary or wages should be allocated to the project. The system architect also pointed out that some of the product engineering team participated in the project. An analysis of the project scheduling and resource allocation tools used by the RampD team showed that in the last seven months each of the product engineers spent about two months helping with the architecture. The product engineering team was employed for only seven months of the year, so the controller planned to allocate 29 (2 7 months) of their time to SRampED projects. It was recognized that the customer care group was developing and collecting the technical requirements that were being incorporated into the architecture. There was plenty of evidence to show that the technical requirements were being developed, collected, and presented to the RampD team. There was no indication of the percentage of time a customer-care agent spent collecting the requirements. To determine that percentage, the controller sat with a customer-care agent and reviewed the work performed by the agent in the last month. It was determined that the agent spent 20 of her time collecting and documenting technical requirements. Based on this analysis, the controller allocated 20 of the time of each customer-care agent to the project as directly engaged salary or wages. The quality control group performed testing and quality control functions on all codes that were written by the company, whether it came from the RampD team or the product engineering team. The controller decided to allocate to SRampED and non-SRampED the work of the quality control team based on the same ratio of SRampED to non-SRampED work performed by the RampD and product engineering teams. The technical writer working in the documentation group spent all of his time writing documentation for external users that was incorporated into user manuals. The controller did not include this persons work in the claim. The salary or wages of the finance, marketing, and sales people were clearly not directly engaged and were not included in the claim. As a final measure, the time-sheet tracking system was reviewed to identify any extended vacation, flex days, or sick leave time that should be allocated to non-eligible activities. Appendix A References A.1 Legislative references List of provisionsAmericanMuscle has partnered with UPS amp I-Parcel for orders shipping outside the United States (including PR, GU, VI, and APOFPO) and Canada. International shoppers now get the benefit of seeing product prices in their local currency, guaranteed order totals, cost-effective international shipping, and much more. Você pode usar o ícone de sinalizador na parte superior da tela para selecionar o seu país de destino e moeda local se ele não tiver sido feito automaticamente. Se você não vir o ícone, clique no link abaixo. Todas as encomendas internacionais devem ser colocadas em nosso site. Nota: A AmericanMuscle apenas suporta transporte internacional para os países listados como opções na ligação internacional. Se um país não estiver listado como uma opção, então não oferecemos envio para ele neste momento. Infelizmente nem todos os produtos vendidos pela AmericanMuscle podem ser enviados para o exterior, como por exemplo fora de estoque e pré-encomenda ou quaisquer outros itens que não podem ser cumpridos imediatamente serão removidos do seu pedido uma vez colocado e um reembolso apropriado emitido. For full international shipping details please view our Shipping Policy SR Performance Caster Camber Plates (94-04 All) Product Resources Review amp Installation Video Hi Im Justin with AmericanMuscle, and Im taking a closer look at the SR Performance CasterCamber plates, fitting all 94-04 Mustangs. If youre thinking about lowering your car, then your alignment might be a potential issue, depending on how low you go, you may not be able to get your car back into factory specs, without the help of something like these plates from SR Performance. This kit allows you to properly dial in both your Camber and your Caster, which are two of the biggest areas that get affected whenever you lower your car. Without addressing this, your car will not only handle poorly, but youll also chew through tires much faster due to improper wear. Taking a closer look at the plates themselves youll immediately notice the quality construction, these plates have been CNCd from a single block of Billet aluminum for superior strength, and although not quite as important, theyve also been finished off with a very attractive satin finish, which is sure to look sharp under the hood. The install is a little time consuming and will involve you pulling the strut arm down the get the strut out of the strut tower. Although this can be done using some basic tools and a floor jack, expect to spend about 3-4 hours completing the job. So if youre looking for an affordable way to get your alignment back in check after lowering your car, then youll want to check out SR Performance CasterCamber plates, available right here at AmericanMuscle Fine-tuned Alignment. Whether you spend your time on the track or on the street, you need a proper alignment. SR Performance caster camber plates will allow you to fine tune your Mustangs front end geometry to prevent premature tire wear while improving steering input and response, turning your Pony into a real corner carver. Ideal for Lowered Mustangs. If you have lowered your Mustang, you may not be able to get your suspension back into alignment, resulting in accelerated tire wear or less-than-ideal handling. Fix the issue with the extra adjust-ability you need with a set of SR Performance Caster Camber Plates that make lining things up easy and worry-free. Bolt-On Installation. SR Performance engineers specifically designed these 3-Bolt Caster Camber Plates to be a direct bolt-on upgrade with no drilling or cutting required for installation. Made in the U. S.A. CNC machined in the USA from high quality billet aluminum for strength, these SR Performance caster camber plates feature an engraved SR logo and a satin machined finish for impressive under hood styling. Aplicação. SR Performance 3-Bolt Caster Camber Plates are designed for use on all 1994 to 2004 Mustangs, including the V6, GT, Bullitt, Mach 1, and SVT Cobra models. Please Note: These SR Performance 3-Bolt Caster Camber Plates are not compatible with the SR Performance Coil-Over Kit part 47375. Fitment: 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Details Whats in the Box (2) Caster Camber Plates Installation InfoInstallation Time: (approx) 4 Hours Sort By Not finding an answer Ask a Question i was wondering if i would need different bolts to accomodate my strut tower brace Depending on what strut tower brace you are using you may. for example a simple two point brace will actually not be mounting to the same points that the Castor Camber plates will be mounting to, but depending on the brand and type of brace you are using there may be different modifications that have to be made. will these fit with the eibach pro damper shock and struts Since this is not a coil-over kit, the Eibach Pro-Damper Shock amp Struts (79-04 V8 94-04 V6 Excludes 99-04 Cobra) item 47800 (americanmuscleeibach-shocks-7904v8.html) will work with the SR Performance Caster Camber Plates (94-04 All). Will this fit a coil overs I have yellow speed coil overs and i need a cc plates. will this product fit my mustang Unfortunately, we have not tested the SR Performance Caster Camber Plates on Yellow Speed coil-overs, so we would not be able to confirm fitment at this time, I apologize. Can this be used with SR Performance coilover kit No - these will not be compatible. You will need the SR Coil-over Caster Camber Kit - I39ve attached the link below for you. spacer set up I have a 95 mustang with the sr lowering springs and hp tokico shock and struts what would be the best set up for me and everything is settled in The SR Performance Caster Camber Plates (94-04 All) would be a great choice for necessary adjustments needed with the installation of your lowering springs. Will these work with any lowering spring kit What brand of lowering springs are these compatible with Yes these caster camber plates are designed for lowering springs to give you back the stock adjustments without the big money
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