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: Requesting "approved" status under subsection 37(7) of the Act.
Position: Approval denied.
Reasons: XXXXXXXXXX . Since the XXXXXXXXXX carries on activities other than SR&ED, we were unable to grant the request for approved status for the purpose of subparagraph 37(1)(a)(ii) of the Act.
2002-014918
XXXXXXXXXX Shaun Harkin, CMA
(613) 957-9229
October 10, 2002
Dear XXXXXXXXXX:
Re: Request for "Approved" Status under Section 37 of the Income Tax Act (the "Act")
This is in reply to your letter of June 14, 2002 in which you requested that XXXXXXXXXX be granted approved status for the purpose of subparagraph 37(1)(a)(ii) of the Act.
To become an "approved" association, an organization must (i) meet the criteria of a non-profit organization and (ii) be able to demonstrate that it is able to carry out scientific research and experimental development ("SR&ED") in Canada on an ongoing basis. More specifically, the organization must also meet all the following requirements:
a) The organization must have the facilities and personnel capable of carrying out SR&ED, as defined in the Act.
b) It must carry on only activities that are unquestionably SR&ED.
c) In order to satisfy the requirements for non-profit status by the particular organization, there must be (i) no personal benefit to members, (ii) no control of other associations, (iii) satisfactory provisions for the distribution of assets upon dissolution, etc. of the organization.
d) The general public must be a beneficiary of the results of any successful research.
e) The funding of the association must be sufficient to ensure ongoing SR&ED.
XXXXXXXXXX In the past, we have granted approved status to a specific branch (e.g. a research branch) of a multi-functional organization, where the SR&ED has been centralized in that specific branch and that branch carries on only activities that are unquestionably SR&ED. However, since the XXXXXXXXXX carries on activities other than SR&ED and has not segregated its SR&ED activities into a specific branch that carries on only SR&ED activities, we are unable, at this time, to grant your request for approved status for the purpose of subparagraph 37(1)(a)(ii) of the Act.
If you require additional information or should you wish to pursue discussions regarding steps that could be taken to achieve approved status, please contact Shaun Harkin at (613) 957-9229.
Yours truly,
Daryl Boychuk, LL.B
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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