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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
When calculating the Nova Scotia Research and Development Tax Credit (NS R&D Credit) is the NS R&D credit netted out as government assistance?
Position TAKEN:
No
Reasons FOR POSITION TAKEN:
The definition of an " eligible expenditure" under the NS R&D Credit is based on the definition of a "qualified expenditure" under 127(9) of the Act. Subsection 127(11.1) of the Act is used to calculate the amount of a "qualified expenditure".
November 3, 1994
Mr. J.P. Lavigne Merchandising, Manufacturing
Director and Partnerships Section
Audit Programs Division Franklyn S. Gillman
Audit Directorate 957-9768
Attention: Mara Praulins
7-940895Nova Scotia Research and Development Tax Credit (the "N.S. R&D Credit")
This is in reply to a memorandum dated April 8, 1994 from Murray Lawton to Phil Feely of the Department of Finance in which you requested that we confirm your opinion that the N.S. R&D Credit is calculated before netting out the N.S. R&D Credit as government assistance. We apologize for the delay in replying.
You opined that under paragraph 6(1)(a) of the Nova Scotia Income Tax Act, the N.S. R&D Credit is calculated based on "eligible expenditures" carried out in that Province that is a "qualified expenditure" under subsection 127(9) of the Income Tax Act (Canada)(the "Act"). It is your contention that paragraph 127(11.1)(c) of the Act deals with calculating the amount of a "qualified expenditure" for purposes of computing the federal investment tax credit and is not used for the purpose of defining a "qualified expenditure". Therefore, in computing the N.S. R&D Credit one need only look at determining a "qualified expenditure" under subsection 127(9) of the Act.
We agree with the above analysis.
Acting Director
Manufacturing Industries,
Partnerships and Trusts Division
Rulings Directorate
Policy and Legislation Branch
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