Canada - English

New SR&ED Form T661 Released 

Canadian Tax Adviser

 

November 05, 2013

 

Carlo Ciaramitaro
Canadian & Americas R&D Incentives Practice Leader

 

The CRA released a revised version of Form T661, "Scientific Research and Experimental Development (SR&ED) Expenditures Claim", on October 31 2013. The revisions address the legislative changes proposed in the 2013 and 2012 federal budgets that will come into effect starting January 1, 2014. As well, changes to the form were made to ensure it is consistent with the consolidated SR&ED policy documents released in December 2012.

The CRA advises that the revised Form T661(13) will be effective as of its publication date (i.e., October 31, 2013), however the CRA will accept the existing T661(12) version of the form until December 31, 2013. Starting January 1, 2014, the CRA will accept only the new T661(13) version of the form for all tax years.

 

Background
Among other measures, the 2013 federal budget announced changes to require additional information on third party preparers involved in the preparation of a SR&ED claim, including a penalty for incomplete or non-disclosure. The budget also provided additional federal support for business innovation, continuing to respond to recommendations made by the Jenkins report .

 

The 2012 federal budget announced changes to capital expenditures, the proxy overhead calculation, arm's-length contract payments as well as changes to simplify the SR&ED program, make the program more cost-effective and streamline the compliance and administration efforts of business and CRA.

 

Previously the CRA announced that it would be making changes to Form T661 to be released in October 2013.

 

Revised Form T661 - CRA changes
The CRA notes that, among other changes, the new version of the form:

 

  • Introduces notes and changes certain descriptions to reflect that expenditures for capital property or the right to use capital property can no longer be claimed after December 31, 2013
  • Changes descriptions to accommodate the 10% reduction in the prescribed proxy amount (PPA) for the number of days after December 31, 2013, in the tax year
  • Introduces new Part 9 to capture SR&ED claim preparer information.
  • Changes previous Part 9-Certification to Part 10.

 

For more information, contact your KPMG adviser.

 

 

 

 

Information is current to November 05, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

Publications

Canadian companies may be interested in these recent publications: