Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: will a grant received to construct a building in which sr&ed wil be done grind the sr&ed expenditures?
Position: yes, likely can be linked
Reasons: the Sr&ed and the construction of the building can be linked
XXXXXXXXXX 980973
S. Tevlin
Attention: XXXXXXXXXX
June 30, 1998
Dear Sir:
Re: Subsection 127(18) of the Income Tax Act (the “Act”)
We are writing in response to your letter dated April 15, 1998 wherein you requested our opinion with respect to the application of subsection 127(18) of the Act to the following hypothetical situation.
A taxpayer receives a government grant which is to assist in the construction of a building (which is not a prescribed special purpose building) in which scientific research and experimental development (“SR&ED”) will be carried out and in which qualified expenditures will be incurred. You have asked whether the government grant will be considered to reduce the qualified expenditures pursuant to subsection 127(18) of the Act.
It is our view that subsection 127(18) of the Act reduces a taxpayer’s qualified expenditures by any assistance or contract payments received or receivable by the taxpayer before the filing-due date for a taxation year that can reasonably be said to be part of a SR&ED contract. In your example, while the grant may be specified to be for the assistance in the construction of the building which is not a prescribed purpose building, it would be our view that the assistance would nevertheless be considered to be in respect of the SR&ED to be carried on within the building.
The foregoing comments are given in accordance with the practice referred to in paragraph 22 of Information Circular 70-6R3 dated December 30, 1996 and are not binding on Revenue Canada, Taxation.
Yours truly,
for Director
Resources, Partnerships and
Trusts Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
- 1 -
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1998
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1998
Email this Content