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About Canada's R&D Tax Credit Program
The federal and many provincial governments provide siginficant
tax incentives for Scientific Research and Experimental Development
(R&D) carried on in Canada. For most corporations, the incentives include
the availablity of faster tax deductions for R&D expenditures as well
as non-refundable income tax credits. For qualifying small Canadian corporations
the tax credit rates are even higher and such credits are generally fully
refundable within the applicable limits.
The tax incentives significantly reduce the net cost of doing R&D
in Canada and are designed to encourage risk-taking in this important area.
The net after-tax cost of R&D expenditures can be as low as 29 cents
for each dollar spent, depending on the type of corporation and the province
where the R&D is conducted.
The Canadian tax incentives are considered to be the most generous among
the G-7 nations.
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