Tax Brief: Claiming SR&EDs

Andre Lamy Medicine Professional Corporation vs The Queen

Taxpayers are capable of claiming scientific research and experimental development (“SR&ED”) tax credits in order to reduce the amounts of tax they pay. Andre Lamy Medicine Professional Corporation (“ALMPC”) claimed SR&ED in 2013 and 2014, which the Canada Revenue Agency (“CRA”) eventually disallowed on the basis the Andrew Lamy, the director, president and secretary/treasurer, performed the research in his personal capacity, and not ALMPC.

The judge in the case eventually sided with ALMPC and advised the CRA to allow for the SR&ED claims. This was due to the fact that the nature of evidence proved that Andrew Lamy’s work and research was performed as an employee of ALMPC. Furthermore, the judge concluded that the SR&ED claims were part of the nature of daily operations of the ALMPC corporation and ALMPC also kept records/documents of their SR&ED activities, which help further their claim. Just because ALMPC had only one employee, the judge did not find this rational to be strong enough, that Andrew Lamy performed the SR&ED activities in his personal name.

Taxpayers should understand that the utilization of SR&ED claims requires specific criteria to be followed and the correct tax professional matter expertise. To read more about the decision/case, refer to the link.

Questions in how the above matter may relate to you? Reach out to Blumenfeld Woznica & Co to see how this matter may impact your specific accounting and/or tax situation.

Disclaimer

This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as account/tax opinion or advice.

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