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.
Principal Issues: "Approved" status requested by the XXXXXXXXXX , which is a not-for-profit organization that funds and facilitates collaborative R&D that benefits the XXXXXXXXXX .
Position: Approval denied.
Reasons: Information found on the XXXXXXXXXX website indicates that they conduct activities other than SR&ED, XXXXXXXXXX , and they conduct some research that is restricted domain R&D where the results may not be divulged to the general public. Accordingly, it is our view that XXXXXXXXXX does not meet the requirements for "approved" status under clauses 37(1)(a)(ii)(A) and (B) as set out in Application Policy SR&ED 96-10.
2008-027071
XXXXXXXXXX Charles Rafuse
613-247-9237
May 5, 2008
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 February 19, 2008, and further to our telephone conversation (XXXXXXXXXX /Rafuse), concerning your request that XXXXXXXXXX be designated as an "approved association" for the purposes of clause 37(1)(a)(ii)(A) 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, equipment 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 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 of the organization.
d) The general public must be a beneficiary of the results of any successful research.
e) The funding of the organization must be sufficient to ensure ongoing SR&ED.
The above requirements are set out in Application Policy SR&ED 96-10, Third Party Payments - Approval Process, which is available on the CRA website at www.cra-arc.gc.ca.
As also confirmed by you, information found on the XXXXXXXXXX website indicates that your organization conducts activities other than SR&ED, namely XXXXXXXXXX , and conducts some research that is restricted domain R&D where the results may not be divulged to the general public. Accordingly, since all the above requirements are not met we are unable to grant your request for approved status for the purpose of clause 37(1)(a)(ii)(A) of the Act.
If you require additional information or wish to pursue discussions regarding steps that could be taken to achieve approved status, please contact Charles Rafuse at (613) 247-9237.
Yours sincerely,
S. Parnanzone
For Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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