National R&D – Tax Court finds that programming costs were not SR&ED and not deductible

Lafleur J confirmed the denial of SR&ED treatment for a project of a consulting company to develop a computer program to automate aspects of filing SR&ED claims through a “web-based, cross-platform and cross-browser framework to track claimable SR&ED projects.” Among other things, there was a failure to “carry out systematic investigation to remove technological uncertainties” and there was no “contemporaneous documentation that details any of the tests and the results of those tests.” The result was to deny deductions for the expenditures in addition to denying investment tax credit claims.

The taxpayer did not argue that the expenditures were deductible under s. 9, notwithstanding that it is common for businesses to deduct their programming expenses without challenge.

Neal Armstrong. Summary of National R&D Inc. v. The Queen, 2020 TCC 47 under s. 248(1) - SR&ED.