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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: What is meant by the term "social services" in the SR&ED definition in 248(1) of the Income Tax Act?
Position: not defined in the Act - dictionary definition and some examples provided
Reasons: definition
XXXXXXXXXX 2001-009607
Shaun Harkin, CMA
November 8, 2001
Dear XXXXXXXXXX:
Re: Technical Interpretation Request: Regulation 2900 and Section 37
This is in reply to your letter of August 6, 2001 requesting our views on various questions related to the term "social sciences" for the purpose of the Scientific Research and Education Development ("SR&ED") program. You have asked us to:
1. Provide a more complete list of what is meant by the definition of "social sciences" for the purposes of the SR&ED program and to name other social sciences not named in Information Circular 86-4R3 that may be included in the exclusion for the purposes of the SR&ED program.
2. Discuss whether all social sciences are considered to be ineligible activities and are excluded from the definition of SR&ED and to inform if there are other known social science disciplines, other than psychology when undertaken as a supporting activity, which would be deemed "eligible" for SR&ED tax credits.
3. Define the meaning of geography as it relates to the eligibility for SR&ED tax credits.
4. Explain the purpose and authority of Income Tax Regulations (the "Regulations"), Information Circulars ("ICs"), and Interpretation Bulletins ("ITs").
1) The term "social sciences" is not defined in the Act nor is there a specific definition of "social sciences" for the purposes of the SR&ED program; therefore, one must look to the ordinary meaning of the word. The Concise Oxford English Dictionary (7th Edition) defines the term "social science" to mean "scientific study of human society and social relations (e.g. politics, economics)".
Activities that are generally considered social sciences include: psychology; economics; education and training; social and cultural anthropology; ethnology; human, economic and social geography; town and country planning; management; law; linguistics; political science; sociology; organization and methods; and other similar fields. Physical anthropology, physical geography, and psychophysiology are normally classified with the natural sciences and not social sciences. Psychological research is not an excluded activity when it is undertaken directly in support of basic research, applied research, or experimental development.
2) As per paragraph (g) of the definition of "SR&ED" in subsection 248(1) of the Act, social sciences are considered excluded from the definition of SR&ED. The exception for psychological research mentioned above is the only noted exception.
3) The term "geography" is not defined in the Act; therefore, one must look to the ordinary meaning of the word. The Concise Oxford English Dictionary (7th Edition) defines the term "geography" to mean "science of earth's surface, form, physical features, natural and political divisions, climate, productions, population, etc.". As stated above physical geography is not normally classified as a social science, while, economic and social geography is normally classified as a social science.
4) Section 221 of the Act allows the Governor In Council to make the Regulations concerning the administration and enforcement of the Act. Some of the items listed in this section include:
- prescribing the evidence required to establish facts relevant to assessments under this Act;
- requiring any class of persons to make information returns respecting any class of information required in connection with assessments under this Act;
- prescribing anything that, by this Act, is to be prescribed or is to be determined or regulated by regulation; and
- defining the classes of persons who may be regarded as dependent for the purposes of this Act.
Both ITs and ICs have no force of law. The Canada Customs and Revenue Agency issues ITs and ICs, GST/HST memoranda, and technical information bulletins in response to the demand for information covering administrative matters and interpretations of the law. These publications are technical in nature. They are available to the general public, but are intended for and used primarily by accountants, lawyers, and other tax specialists. Copies of ICs and ITs are available at your local tax services office or on the internet at www.ccra-adrc.gc.ca/formspub/menu-e.html.
The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R4, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Customs and Revenue Agency. Our practice is to make this disclaimer in all instances in which we provide an opinion.
We trust the above comments are of assistance.
Steve Tevlin
for Director
Partnerships Section
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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© Her Majesty the Queen in Right of Canada, 2001
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© Sa Majesté la Reine du Chef du Canada, 2001
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