The bmannconsulting.com website
bmann.ca
1---
2tags:
3 - startup
4 - Canada
5title: SR & ED Canadian Tax Incentives
6---
7Technically [Scientific Research and Experimental Development](https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program.html) aka SR & ED, aka pronounced "SHRED". As in, "we're doing some R&D but it's shreddable".
8
9This is a tax credit that applies to salaries of R&D staff employed and resident in Canada.
10
11What this means is, for startups that aren't earning revenue, you can get cash back spent on salaries, which can be up to around 60% of an individual's salary.
12
13The bad parts of this program is that a lot of things that aren't R&D get funded, it's hard for smaller companies to complete the reporting without assistance from middle-men consultants, and it's generally a bunch of bureaucratic overhead. The government can't hire enough technical consultants to review/approve R&D so you're in a situation where people are having their research reviewed by people who potentially don't understand why it's innovative.
14## SRED Zombie
15There are some companies, especially software development consultancies, that aren't revenue positive without the SRED rebate they receive annually.
16
17They really should be shut down and the team should work on something that actually makes revenue.
18
19## Simple Flat Rate
20Without delving into the nuances, Canada could vastly simplify this by flat rating the whole thing and doing spot checks.
21
22* percentage of staff time spent on R&D ⅹ salary ⅹ rebate% = credit you get
23* write up a title and abstract of the project for filing (connect people working on similar areas of R&D? make this info public? classify in broad categories such as "AgriTech", "Cryptography", etc?)
24* completely eliminate middle men consultants across the country
25
26Stay tuned for [[Open Source SRED Platform]].