On October 31 2013 the CRA announced changes to the Scientific
Research and Experimental Development claim form. The modified T661
form accommodates legislative changes announced in the 2012 and
2013 budgets and the consolidated policy documents released in
The revised form goes into effect as of January 1 2014.
There are three major changes that are reflected in this
A new Part 9 for accommodating mandatory disclosure on the
claim preparer and billing arrangement.
A number of changes to Part 2 of the form to align with the
consolidated policy documents released in December 2012.
Accommodate legislative changes from the 2012 budget with
regards to the elimination of capital and lease expenditures,
revised proxy rate to 55% and the revised base tax credit rate from
20% to 15%.
1. Preparer disclosure on fees
If a claim preparer was engaged in the preparation of
the SR&ED claim, the prescribed information in
respect of SR&ED claim preparers has to be reported
in the new Part 9. The information to be declared is:
The name of each claim preparer that has accepted consideration
to prepare or assist in the preparation of
the SR&ED claim;
The business number of the claim preparer;
The billing arrangement code for the claim preparer as
described in Form T661 Part 9 in the list of Billing arrangement
The billing rate;
Any other billing arrangement (if other than those identified
under Billing arrangement codes in the T661 Part 9); and
The total fee paid, payable or expected to pay.
Certification attesting to whether a claim preparer was or was
not engaged in any aspect of the preparation of the claim is
required. A penalty of $1,000 may be assessed in respect of
each SR&ED claim for which prescribed information
about the claim preparer(s) is missing, incomplete or
The penalty applies in respect of claims filed on or
after the later of January 1, 2014, and the day on which the
enacting legislation receives royal assent.
2. Changes to Part 2 of the T661 form – Consolidated
The revised form aligns with the requirements of the
consolidated SR&ED policy documents released in December
The following changes have been made:
Removed lines 223 to 229 in Part 2. [Location where
work is performed]
Removed lines 230 and 232 in Part 2. The relevant
information from these lines is now requested on lines 620 and 622
in Part 7. [indication of SR or ED]
Removed lines 235 to 238 in Part 2. [indication of new
development or improvement of materials or processes]
Consolidated former Sections B and C in Part 2 so that all
claimants answer the same three questions in Section B. Also
changed the order of the questions in Section B. [same three
section of experimental development required for scientific
Form T661 version (12) may be submitted until December 31,
2013. Starting January 1, 2014, the CRA will accept
only T661 version (13) for all tax years.
3. 2012 budget changes coming into effect as of January 1
The revised form accommodates legislative changes announced in
the 2012 federal budget.
Introduced notes in Parts 3 and 4 to advise that expenditures
for capital property or the right to use capital property can no
longer be claimed after December 31, 2013.
Changed the descriptions for lines 350, 355, 390, and 504 to
reflect that expenditures for capital property or the right to use
capital property can no longer be claimed after
December 31, 2013.
Changed the description for line 820 to accommodate the 10%
reduction in the prescribed proxy amount (PPA) for the number of
days after December 31, 2013, in the tax year. As of 2013 the
prescribed proxy amount (PPA) was reduced from 65% to 60% and as of
January 1 2014 it is reduced to 55%.
The base tax credit rate is reduced from 20% to 15% as of
January 1, 2014. The enhanced rate of 35% continues to apply to
Eligible sub-contracting expenditures inclusion rate had been
reduced from 100% to 80% in 2013 and continues to apply going
The fee disclosure requirement is part of the CRA's wider
effort at determining the efficiency and the degree of beneficial
impact that this program has on innovation for Canadian businesses
through technological advancements.
The changes to the form stemming from the consolidated policy
documents reflect the renewed focus of the CRA towards the
application of the rules that govern the program. While the program
rules have not changed, the application of the guidelines in their
consolidated policy will make non-compliant claims more easily
detectable. Claimants should consult with their MNP SR&ED
practitioners to gain a better understanding of how to respond to
the new consolidated policy guidelines.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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