27 November 1990 External T.I. 901435 F - Canadian Manufacturing & Processing Profits

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.

19(1)

November 27, 1990

Dear Sirs:

Re:  Canadian Manufacturing and Processing Profits

This is in reply to your letter of June 18, 1990 in which you requested our opinion regarding the definition of "scientific research" as referred to in the definition of "qualified activities" in section 5202 of the Income Tax Regulations. We apologize for the delay in replying to you.

As you noted, amendments in 1986 to the Income Tax Act and to the Regulations substituted the term "scientific research and experimental development" ("SR&ED") in place of the term "scientific research" ("SR"), thereby clarifying that "development" was recognized as a qualifying activity. It is noted that the definition of SR&ED in Regulation 2900 is identical to the former definition of SR. Thus it is apparent that the lack of substitution of the term used in the definition of "qualified activities" in Regulation 5202 was on oversight, since the term in Regulation 2900 to which Regulation 5202 refers was substituted. We will bring this anomaly to the attention of the Department of Finance, and mean while will continue to consider the reference to SR as a reference to SR&ED.

Our comments in this letter represent our general views with respect to the subject matter of your letter. However, our comments are not rulings and, in accordance with the guidelines set out in our Information Circular 70-6R2 dated September 28, 1990, are not binding on the Department.

Yours truly,

for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch