CATA Challenges High-Tech Tax Credit System

OTTAWA, Jan. 24 -- The Canadian high-tech association CATAAlliance (CATA) has released a series of reports, "Improving Access to SR&ED Investment Tax Credits," as part of its effort to persuade the Canadian government to change the way it delivers the scientific research and experimental development (SR&ED) tax credit system.

"We believe that improving accessibility of the refundable SR&ED Investment Tax Credits (ITCs) will be critical to achieving the technology leadership that the government is anticipating will result in Canadian jobs under the goals of Canada's Innovation Agenda," said CATA President John Reid. "Without better program access, we will be hard pressed to meet the goal of moving Canada from fourteenth to the top five in SR&ED performance."

Reid added, "The companies that are the leaders of, and breeders of, Canada's economic progress should not lose out on tax credits merely due to the complex, capricious nature of the rules for obtaining the credits."

The reports were developed under the direction of Russ Roberts, CATA's senior research director and a senior director with Deloitte and Touche.

CATA surveys revealed that almost half of companies interviewed say they don't use the credits, because the system is too cumbersome and complex to be useful.

Roberts said, "Simplification of the system will not only help claimants, but it will save time and eliminate unnecessary costs for CCRA, the administrator of the program." He added, "Confusion can be eliminated and extremely costly disputes can be avoided for all parties."

CATA's report focuses on the disparities in treatment of credits available to early stage, mid-evolution and mature corporations.

For more information, visit: www.cata.ca