Webinar: SR&ED credits in cybersecurity (in French)

Emergex in partnership with ISEQ, Quebec’s Electronic Systems Industry Cluster, bring you their webinar on SRED in the context of cybersecurity.

On the agenda: case studies, best practices, pitfalls to avoid and contractual rules for subcontracting in electronics.

Pierre Savignac, CEO and founder of Emergex, will share with you his 25 years of experience.

Registration online on the ISEQ website

Webinar on the technological aspects of the SR&ED program (in French)

  • Can you claim hours spent for project management, for training or for writing documentation as eligible SR&ED expenses?
  • Do you know how to define the start of a SR&ED project?
  • Must you absolutely use a timesheet system to claim SR&ED?
  • Can you claim work done by a subcontractor?
  • What tools can you use to simplify the collection of data to prepare your SR&ED claim?
  • Do you know what activities are eligible for the SR&ED program?
  • Do you know what your role is in SR&ED?
  • Do you know what inspectors expect?
  • Do you know if a technical resource can automatically be claim in SR&ED?

If you don’t have the answer to all of those questions, you risk losing your full potential for tax credits.

This event will be held on Tuesday, May 18, 2021, from 9 am to noon online.

Please note that this event will be held in French. To reserve a spot, contact 514-765-3333 #320.

Webinar on the financial aspects of the SR&ED program (in French)

  • Is a bonus paid to a specified employee an eligible SR&ED expense?
  • Does your taxable income have an impact on the rate of the tax credits and on your eligibility for a refund?
  • Is the salary of an administrative project manager eligible as a SR&ED expense?
  • How do you structure a contract with a subcontractor or a client to make sure that it can be claimed for SR&ED
  • Is it necessary to own the intellectual property of the finished product to claim SR&ED?
  • Is work done outside Canada eligible for SR&ED?
  • Are SR&ED expenses that have yet to be paid eligible?
  • Can SR&ED tax credits be pre-financed?

If you don’t have the answer to all of those questions, you risk losing your full potential for tax credits.

This event will be held on Tuesday, April 6, 2021, from 9 am to noon online.

Agenda of the event:

8:45 AM: Arrival of participants and discussion

9 AM: Start of the presentation

10:15 AM: Break

10:30 AM: Resumption of the presentation

11:45 AM: Question period and discussion

Please note that this event will be held in French. To reserve a spot, contact 514-765-3333 #320.

We hope to see you there.

Webinar on the technological aspects of the SR&ED program (in French)

  • Can you claim hours spent for project management, for training or for writing documentation as eligible SR&ED expenses?
  • Do you know how to define the start of a SR&ED project?
  • Must you absolutely use a timesheet system to claim SR&ED?
  • Can you claim work done by a subcontractor?
  • What tools can you use to simplify the collection of data to prepare your SR&ED claim?
  • Do you know what activities are eligible for the SR&ED program?
  • Do you know what your role is in SR&ED?
  • Do you know what inspectors expect?
  • Do you know if a technical resource can automatically be claim in SR&ED?

If you don’t have the answer to all of those questions, you risk losing your full potential for tax credits.

This event will be held on Tuesday, March 9, 2021, from 9 am to noon online.

Agenda of the event:

8:45 AM: Arrival of participants and discussion

9 AM: Start of the presentation

10:15 AM: Break

10:30 AM: Resumption of the presentation

11:45 AM: Question period and discussion

 

Please note that this event will be held in French. To reserve a spot, contact 514-765-3333 #320.

Webinar: How to prevent (if not, survive) an audit of your SR&ED tax credits

We have the privilege to offer a second webinar on September 23rd with our partners from AInBC, The Artificial Intelligence network of British Columbia! This webinar highlights best practices and common errors to avoid in order to survive a potential audit. You will learn how to document, structure and present your SR&ED projects from your customer projects while answering the CRA 5 eligibility questions.

Please, register to this webinar here!

 

The CEWS has evolved, as have its impacts on your SR&ED and E-Business tax credits!

We already covered the impacts of the Canada Emergency Wage Subsidy (CEWS) in a previous article. However, the federal government announced that it would be extending the program to June, 2021, and that major changes would be made to both the program eligibility criteria and subsidy rates. Full details are available on the Department of Finance website.

The changes that have been announced will have a greater than previously anticipated impact on your future Scientific Research and Experimental Development (SR&ED) and  E-Business (CDAE in French for crédit d’impôt aux Affaires Électroniques) tax credit claims. It should be recalled that, normally, such subsidies are excluded from tax credit calculations, given that the same salary expenditure cannot be funded by the public sector twice (no double dip).

To fully understand your specific situation, and thus provide you with the best possible advice, we have created a simulator which allows us to obtain a relatively accurate computation of this impact and of how much your tax credit will be. The Emergex financial coordinator assigned to your company will be able to answer any related questions you may have.

What precisely is that impact, in concrete terms?

Regarding the SR&ED credit, the wage subsidy paid to each employee eligible for the credit should be deducted from the eligible wage when calculating the tax credit, at a rate proportional to the time spent on SR&ED activities. The calculation of general costs (commonly known as proxy) remains unchanged since the aid received is only deducted after this calculation. In analyzing the results obtained from modelling different potential revenue losses, we can conclude that, on average, a company benefiting from the CEWS will face a loss of 30% of SR&ED tax credits for the entire duration of the program.

For the E-Business, the full subsidy received for each employee will be deducted from their salary. For the credit calculation, the eligible salary cap ($83,333) will apply, and remains unchanged. That means there could be a very low to no impact for high-wage employees, whereas the impact will be greater for lower-wage employees. Our analyses lead us to conclude that there will be a reduction of about 40% for the E-Business.

We will conclude by reiterating our recommendation that you make sure you retain all documents pertaining to any emergency aid you receive. These documents are invaluable when it comes to calculating your SR&ED and E-Business tax credits, as well as their justification in case of an audit by the fiscal authorities.

Contact us! Our simulator is available now. Together, we can thus prepare and plan for your future claims as thoroughly as possible. That’s one of the multiple added values you get from Emergex, at no additional cost!

Seminar on the financial aspects of the SR&ED program (in French)

  • Is a bonus paid to a specified employee an eligible SR&ED expense?
  • Does your taxable income have an impact on the rate of the tax credits and on your eligibility for a refund?
  • Is the salary of an administrative project manager eligible as a SR&ED expense?
  • How do you structure a contract with a subcontractor or a client to make sure that it can be claimed for SR&ED
  • Is it necessary to own the intellectual property of the finished product to claim SR&ED?
  • Is work done outside Canada eligible for SR&ED?
  • Are SR&ED expenses that have yet to be paid eligible?
  • Can SR&ED tax credits be pre-financed?

If you don’t have the answer to all of those questions, you risk losing your full potential for tax credits.

This event will be held on Wednesday, June 19, 2019, from 8:45 am to noon at Emergex’s head office.

Please note that this event is reserved for our clients and will be held in French. To reserve a spot, contact 514-765-3333 #260.

Because places are limited, Reservations are taken on a first-come, first-served basis.

We hope to see you there.

Webinar : How AI Companies Can Maximize SR&ED Claims in a Downturn

How are the current crisis and government measures affecting your SR&ED claim? What are the do’s and don’ts for AI companies in order to optimize their claim?

This virtual seminar will provide tips & insights on how to maximize your SR&ED claim in an economic downturn. The session will begin by exploring the impacts of Covid-19 and Canada emergency grants on your SR&ED claim. Then the seminar will take a look at the common mistakes to be avoided and the best practices for AI companies regarding the preparation of their claim. We will finally open for a Q & A session with you, the audience.

You can watch or rewatch this webinar here!

Emergex SR&ED Consultants offers a new webinar designed for AI companies

We had the privilege last week to present a new webinar in partnership with AInBC, The Artificial Intelligence Network of British Columbia.

This webinar, specially designed for the AI companies, highlights the best practices to apply and the common mistakes to avoid in order to optimize your SR&ED tax credit claims. It also explores the impact of Covid-19 and government emergency grants on your amounts claimed in SR&ED. If you want to view this presentation, you can find it here.

Effect of government COVID-19 emergency aids (non-subsidy) on your SR&ED and E-Business

A cracked piggy bank surrounded by a virus. Covid-19 cornonavirus ruining saving plans and financial futures.

Continuing with our series of articles on government emergency measures, we will now continue by talking about non-subsidy COVID-19-related aid programs. Once again, we will look at the likely impact of any such aid on your future Scientific Development and Experimental Development (SR&ED) and E-Business (CDAE in French for crédit d’impôt aux Affaires Électroniques) tax credit claims.

As already recommended previously, it is important to keep any emergency aid documents you will receive safe and handy. They will be needed when calculating future SR&ED and E-Business tax credits and could be requested by tax authorities in the event of an audit.

Emergency aid resulting in reduction of time spent on eligible activities

Laid-off employees who earned wages totalling at least $5,000 over the last 12 months and who did not receive any income for a consecutive period of 14 days due to COVID-19 can receive the CERB. This benefit provides $500 per week for a maximum of 16 weeks.  What this means for the employer is that employees receiving this benefit are no longer in the company’s payroll.

The work sharing (WS) program is designed to help employers and employees avoid lay-offs when the company is experiencing a temporary slump in its business operations.  The benefit provides employment insurance (EI) to eligible employees who agree to a reduction in their normal working hours and to share work with their colleagues as the company recovers. Self-employed workers and shareholders holding more than 40% of voting shares are ineligible.

To receive this aid, the targeted employees must consent to a 10% to 60% reduction in their working hours. The employer will continue to pay the employees for the regular hours worked. EI fills the gap by paying such employees directly for the hours not worked. These direct payments are generally equal to 55% of the employees’ weekly wage and can go up to a maximum of $573.

To apply for the program, the employer needs to complete the appropriate forms available on the Service Canada website and submit them by e-mail. The e-mail address differs according to the province in which the company is located. Employers are requested to submit their application 10 calendar days before their requested program start date. Simplified measures implemented by Service Canada during the crisis should reduce the processing period to 10 calendar days. Application forms and relevant documents must be preserved carefully for future reference.

Conclusion: These two programs will have an impact on eligible SR&ED activities, which will either see a drop in volume or could be completely put on hold. As companies emerge from the crisis, they will therefore be faced with two possible scenarios. SR&ED activities may recover at a pace exceeding the normal growth rate during regular periods, with minimum impacts on credits, or conversely, such activities may lag significantly, which may in turn have a major negative impact on credits. In any case, it is crucial that any effort invested in eligible SR&ED activities be properly documented.

Temporary lay-offs and the work sharing program greatly affect the E-Business tax credit and its eligibility criteria (which require a minimum of 6 employees, 40 weeks of employment and 26 working hours per week). Investissement Québec has not yet made any official pronouncement on the matter, but our experience tells us that it could be relatively relaxed if everything is well documented.  We will communicate details as soon as we have an official response on the issue.

It should further be noted that your company could be eligible for the work sharing program as well as the two subsidies covered in our previous publications (CEWS and 10% temporary subsidy).  If that is the case, the CEWS shall be reduced by the amounts paid or reimbursed under the 10% temporary wage subsidy and the work sharing program for the same period.

Emergency aid potentially affecting your E-Business claim

The Ministère du Travail, de l’Emploi et de la Solidarité sociale du Québec has set up the above program, which enables reimbursement of 100% of expenses for eligible employee training and competency improvement activities totalling $100,000 or less and 50% of those between $100,000 and $500,000. The program will remain in effect for the duration of the crisis. The program’s eligibility criteria are expansive, which means many companies can apply for it.

Reimbursable expenses include wages of employees in training up to $25/h, professional trainers, and on-line course registration fees up to $150/h, or the cost of training equipment and supplies. To apply for this aid, contact your Local Employment Centre.

If your company is receiving government subsidies (CEWS and 10% subsidy), the reimbursement will not be up to 100%, but 25 or 90%, depending on the subsidy received.

This program deals with training, which is an ineligible activity under the E-Business tax credit. As a reminder, employees must spend more than 75% of their time on eligible activities to maintain eligibility for the credit.  Under this aid, employees could be excluded from the credit if they spend too much time in training.

Again, Investissement Québec has not announced a decision on the matter. Our advice remains the same for such situations: retain proper documentation in order to prove and support any action taken, if needed. We will communicate any details as soon as we have an official response on the issue from Investissement Québec.

Closing remarks

Since we are currently living through very exceptional and fluid conditions, the programs discussed and information provided in this article could change at any time. Eligibility criteria and approved expenses are equally likely to change.

We ask you to rest assured that Emergex SR&ED Subsidies is closely monitoring the situation and is always on top of any new information put out by the governments that could have a significant impact on your claims. We remain available to support you and secure the highest possible returns in your future tax credit claims, considering any potential emergency aid obtained and the unique situation your business will face.

Testimonials

Jean Francois Gravel - IQware

Jean Francois Gravel – IQware

Since the creation of IQware in 2003, we have retained the services of Emergex to help us structure our R&D department in order to maximize the benefits from government subsidy programs.