SR&ED is the largest and most important corporate tax incentive program in Canada. However, when most people think about this program, they think about hi-tech, like IT and software, or robotics, machinery. Notwithstanding that there are a myriad of eligible categories and industries, it is amazing that so many professionals in the medical field overlook this program.
It’s clear to most that pharmaceutical companies are performing SR&ED. They develop new drugs and then conduct clinical trials to determine whether the product results in any medical benefits. Pharmaceutical claims are big, no doubt.
But what about doctors or clinicians? They aren’t developing new products, so how could they possibly qualify? Well, because you don’t have to develop a medicinal product in order to qualify for SR&ED. Ask any CRA auditor and you will be told that the SR&ED program is all about advancements in knowledge, within an area of science or technology.
So, let’s ask ourselves? Do doctors gain new knowledge within their practices? Yes, sometimes. Doctors often perform clinical trials within their practice. Some doctors are specialists, or surgeons, and are involved in leading-edge investigations and research. If they don’t conduct a formal clinical trial, they often identify medical hypotheses that can be tested with the data that is collected and analyzed within their practice, or at their place of work, which could be a hospital or clinic. This work may qualify under the SR&ED program, resulting in refundable ITCs (Investment Tax Credits). If a corporation qualifies for an ITC, then the corporation will also qualify for an associated provincial tax credit.
Most likely the average GP attending to typical patient complaints (colds, flu, sore back) will not be performing SR&ED within their practice. But some clinics and practices might qualify – like fertility clinics, podiatrists, dental implants, rehabilitation clinics, pain clinics, plastic surgeons. If you have identified a medical and/or scientific uncertainty, and you systematically collect data within your practice that is analyzed in an attempt to gain new scientific knowledge, then that work could qualify for a tax refund.
Find out more about eligibility within the medical field.