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: The client requested clarification of the criteria relating to "approved" status for SR&ED.
Position: General comments provided.
Reasons: The determination as to whether a particular entity can be approved can only be made following a review of a particular applicant's submission and related documentation as outlined in SR&ED's Third-Party Payments Policy.
XXXXXXXXXX
2013-048767
Charles Rafuse
613-247-9237
May 29, 2013
Dear XXXXXXXXXX:
Re: Request for "Approved" Status under Section 37 of the Income Tax Act
This is in response to your email of May 3, 2013 and our telephone conversations (XXXXXXXXXX/Rafuse), concerning your request for information on how a post-secondary institution that is not a university, in this case a publicly funded college, may obtain "approved" status under clause 37(1)(a)(ii)(B) of the Income Tax Act (the "Act").
Our Comments
A new Canada Revenue Agency ("CRA") publication entitled "Third-Party Payments Policy" dated December 19, 2012, has replaced "Application Policy SR&ED 96-10". This new publication provides guidance on the "approval process" under section 37 of the Act for certain entities who wish to conduct "scientific research and experimental development" ("SR&ED"), as that term is defined in subsection 248(1) of the Act, for various third parties. The above-noted document can be found on the CRA website at http://www.cra-arc.gc.ca.
As you are aware, currently, all Canadian universities and affiliated colleges are automatically considered by the CRA to be "approved" entities. However, entities other than Canadian universities and affiliated colleges must seek and receive written approval from us as described in Chapter 11 of the "Third-Party Payments Policy" before they can be considered as "approved" for these purposes.
Accordingly, for a college that is not affiliated with a university, a separate legal entity or specific branch/division would have to be set up, which would only carry out SR&ED activities, in order for us to consider any application for "approved" status.
We trust that these comments will be of assistance.
Yours truly,
Michael Cooke, C.P.A., C.A.
Manager
Business and Capital Transactions Section
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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