Everything You Need to Know About IRAP Funding

transcript

EVERYTHING YOU NEED TO KNOW ABOUT IRAP FUNDING - Including SR&ED Presented by Ron Matheson, Advisor – Concierge Service at National Research Council and Jeff Christie, Partner - Boast Capital November 26, 2015

OUTLINE

I.  Overview of the Concierge Service

II.  IRAP Program

III.  Q&A

IV.  SR&ED

Ronald.matheson@nrc-cnrc.gc.ca

NATIONAL RESEARCH COUNCIL CANADA INDUSTRIAL RESEARCH ASSISTANCE PROGRAM

Supporting SME growth through innovation and technology

NRC Industrial Research Assistance Program 5

NRC MISSION • Working with clients and partners, we provide innovation support, strategic research, scientific and technical services to develop and deploy solutions to meet Canada’s current and future industrial and societal needs. • 

NRC-IRAP MISSION • Accelerate the growth of SMEs by providing them with a comprehensive suite of innovative services and funding

Delivered by a network of over 400 professionals located in more than 100 communities across Canada

How we serve •  Provide advisory services

•  ITAs, Concierge Advisors (new)

•  Offer strategic, competitive, business intelligence

•  Promote networking and linkages with potential partners in Canada and abroad

•  Enable non-repayable financial assistance

How to become a client

If your company meets all of the following criteria: •  small-or medium-sized firm (fewer than 500 full-time

employees)

•  located in Canada

•  incorporated and profit-oriented

•  want to grow through development and commercialization of innovative, technology-based products, services, or processes in Canada

Your company may be eligible for support

1. Eligibility

2. Meeting at your company’s site An Industrial Technology Advisor (ITA) will visit you at your location to better understand •  Your business structure (ownership, management, etc.) •  Your business strategy •  The nature of your activities (products/services, clients, competitors…) •  Available resources (human, material, etc.)

You will •  Discuss how NRC-IRAP can help you achieve your business goals •  Learn more about the variety of NRC-IRAP services and programs •  Oversee the conditions for financial contribution support

3. Project definition

•  Definition of the business opportunity

•  Identify the client’s needs

•  Decision to “buy” vs. “develop” new technology

•  Define the project’s objectives, resources, timelines, deliverables, etc.

4. Proposal for financial support Your proposal must:

•  Provide an overview of your business

•  Contain a clear description of the activities necessary to achieve your project

•  Identify clear and measurable objectives

•  Elaborate a realistic budget that is coherent with your project’s activities and resources

•  Identify other sources of financing, if necessary

Your ITA will provide you with an online template

5. Proposal evaluation Project assessment:

•  Understanding the business opportunity

•  Evaluating the firm and its capabilities

•  Assessing the project content and technical risk Determining the financial contribution level for all costs: •  What activities are required to accomplish the project?

•  What are the expected results?

•  What is the overall cost of the project?

•  What portion of the project does NRC-IRAP support?

•  Are the project costs reasonable?

6. Project management and follow-up

Your ITA will work with you from start to finish:

•  Offer support throughout the life of your project

•  Ensure you reach your ultimate technical and business objectives

•  Follow-up to ensure you maximize the commercial benefits resulting from your project

40%Aerospace

Agriculture&Food

Construction&Related

EnergyandEnvironment

Health&LifeScience

ICT(DigitalEconomy)

Manufacturing&Materials

Others

Our clients by industry sector

Year 2012-2013

Impact

FINANCIAL NRC-IRAP $1 $10 revenue for the firm

ROI NRC-IRAP $1 $12 economic impact

JOBS 8,500 high quality jobs supported yearly

Who to contact?

Ron Matheson – Edmonton Centre Concierge Advisor: Tel: 780 429-6363, ext 227 Email: Ronald.Matheson@nrc-cnrc.gc.ca Karl Miller – Calgary Centre Concierge Advisor: Tel: 403 299-8014 Email: Karl.Miller@nrc-cnrc.gc.ca

OVERVIEW OF THE SR&ED PROGRAM

WHAT IS SR&ED?

APPLICABLE INDUSTRIES

QUALIFYING CRITERIA

Must meet three criteria to qualify for SR&ED:

1.  Technological Challenges 2.  Technological Uncertainty 3.  Technical Content or Iterations

ELIGIBILITY The CRA’s 5 questions: 1.  Was there a scientific or a technological

uncertainty that could not be removed by standard practice/engineering?

2.  Did the effort involve formulating a hypothesis

specifically aimed at reducing or eliminating the uncertainty?

Continued…

ELIGIBILITY 3.  Was the adopted procedure consistent with the

total discipline of the scientific method, including formulating, testing, and modifying the hypothesis?

4.  Did the process result in a scientific or

technological advancement? 5.  Was a record of the hypothesis tested and

results kept as the work progressed?

SR&ED BENEFITS

WHO CAN CLAIM?

SMEs = defined as generating less than $500K taxable net income in the prior fiscal year.

SR&ED BENEFITS Return rates for SME CCPCs:

SR&ED BENEFITS Return rates for non-CCPCs:

CRA REQUIREMENTS

TECHNICAL DOCUMENTATION

CRA requires that SR&ED documentation must: §  Have been documented at the time the work was

completed §  Highlight technical obstacles or challenges §  Be dated

TECHNICAL DOCUMENTATION §  Most important thing is to document the technical challenges/obstacles as the work progresses.

§  Capture: the problem and the iterations undertaken to attempt to resolve the problem

§  What are the different hypotheses and how was each hypothesis tested?

TIME TRACKING

FINANCIAL STATEMENTS

WHEN TO CLAIM?

18 Months Past Fiscal Year End § Current Claim = Within 6 mo §  Amended Claim = Within 7 to 18 mo

TURNAROUND TIMES

From receipt of a complete claim:

§ CCPC Current Claim – 4 months § CCPC Amended Claim – 8 months § Non-CCPC Claim – 12 months

CRA REVIEWS

CRA Review ≠ Tax Audit Multiple types of Reviews:

§ Desktop §  Financial §  Technical & Financial §  First Time Claimant Advisory Service (FTCAS)

JEFF CHRISTIE PARTNER 403 589 2809 | jchristie@boastcapital.com BoastCapital.com | @BoastCapital | @ChristieLuge