Most often, developments in the life science and biotechnology industries are less radical and add only incremental advancements to existing products and processes. It’s often the case that these improvements are disregarded as SR&ED eligible and end up going unclaimed.
Companies that aren’t able to identify these types of qualified activities miss out on a large portion of their tax credit entitlements.
Below we’ll take you through some examples of what may be SR&ED eligible in life science and biotechnology, but first, there are three main criteria the work needs to fit into.
What Qualifies for SR&ED?
There are three fundamental criteria used to determine whether a project is eligible for SR&ED tax benefits or not:
- Technological uncertainty – whether or not the objective can be achieved is unknown based on generally available scientific / technical knowledge or experience
- Technological content – evidence that qualified personnel with relevant experience in science, technology or engineering conducted a systematic investigation through experiment or analysis
- Technological advancement – the work must generate information that advances understanding of scientific relations or technologies
It is also important to note, success or failure doesn’t matter in the eyes of SR&ED. Even if a project fails, you may still be able to claim it. The program isn’t about winning or losing, but whether or not something new was learned.
What May Be SR&ED Eligible in Life Sciences and Biotechnology
If a project has met the three criteria above, there’s a high chance it’s eligible. Here are a few examples of qualifying work:
- Filing of patents
- Attempts to decrease the cost of the product
- Product enhancements
- Improved manufacturing process
- Attempting to resolve issues with yield, formulation or cost
- Implementation of scale-up procedures
- Experimentation with biological controls
- Undertaking clinical trials
There’s one question that gets asked often by those new to the SR&ED process regarding marketing trials. It’s important to note that market research, routine data collection and sales promotions aren’t eligible under the SR&ED program guidelines.
Find Out How Much You Can Claim
One of the best ways to know if a biotechnological or life science activity is eligible is to ask an expert.
With 10,000 successful projects approved by the CRA, a success rate of over 98%, and more than 1500 different businesses served over the past decade, we have the knowledge depth and experience to provide expert guidance on how the SR&ED program requirements apply to organizations in all sectors.
Get in touch here to request a free consultation.
*The information above is meant for informational purposes only, and not to be used as advice.