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.
Dear Mr. Holland:
Re: Ontario Scientific Research and Experimental Development (“SR&ED”) Superallowance (the “Superallowance”)
We are writing in reply to your letter of September 1, 1989 wherein you requested an interpretation as to whether the proposed Superallowance qualifies as “government assistance” as defined in subsection 127(9) of theIncome Tax Act. As you noted, this question has implications for the pool of qualified expenditures under subsection 37(1) and for the base upon which federal investment tax credits are earned under paragraph 127(11.1)(c). Our response to your query has been delayed because the draft legislation was not released until June, 1991 and a subsequent Departmental review of the issue was undertaken. The Superallowance has not yet been passed into law.
The Ontario Budget of April 20, 1988 introduced the Superallowance which is provided for current and capital expenditures made on SR&ED in Ontario. The Superallowance is a deduction in calculating taxable income, set at 35% for small businesses and 25% for other corporations. The Superallowance also contains an additional deduction for incremental SR&ED expenditures which exceed the average over the three preceding years. The Superallowance is provided in addition to the 100% provincial deduction for qualifying SR&ED expenditures.
In our opinion, neither the proposed Superallowance nor the related provincial tax savings constitutes government assistance as defined in subsection 127(9).
We trust that these comments will be of assistance.
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1990
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1990
Email this Content