TORONTO, Nov. 29 /CNW/ - Eighty-six percent of respondents to a survey by
KPMG LLP say that increased Scientific Research and Experimental Development
(SR&ED) tax incentives would influence their company's decisions regarding
supporting further Research and Development (R&D) investments in Canada.
Yet, on the other hand, 36 percent stated that the availability of R&D
tax incentives does not factor into the decision making process when selecting
a geographic location for their R&D activity.
KPMG is submitting its survey findings in advance of the November 30th,
2007, deadline for organizations to submit comments to the Department of
Finance and the Canada Revenue Agency on how to make Canada's R&D tax
incentive program more effective.
KPMG suggests that a lack of certainty in outcome and a lack of
knowledge, experience and understanding are key factors in why the SR&ED tax
incentive is not more top of mind for some Canadian businesses. As well, some
have tried to use the program before, have become frustrated with the process,
and just can't be bothered to factor it into their decision making process.
"Canadian companies are telling us they think the R&D tax incentive
program is a positive one for R&D in Canada," said Alan Katiya, FCA, National
Leader and Partner, KPMG's SR&ED Tax Services Group. "However, there is room
for improvement in the process; the program needs to be administered in a more
effective way to ensure that companies are able to access the benefits
available to them."
Improving the R&D program is not just about providing more money to
organizations--it is also about making the process more relevant to more
organizations. When making their investment decisions, organizations are
putting more emphasis on the availability of qualified labour (84 percent),
corporate tax rates (69 percent), and labour rates (66 percent).
"Relative to any other country in the world, this program is generous and
already very lucrative for Canadian businesses," said David Regan, CA,
Partner-in-Charge of KPMG's SR&ED Tax Services Group in Toronto. "But a
greater focus needs to be put on making the program more accessible to
companies so they are more likely to use the incentives."
KPMG commissioned the survey between November 5th and 26th, 2007, and
received 345 respondents, with 67 percent having spent more than 100 hours
involved in the R&D tax incentive program. Members of more than 20 trade
organizations participated in the survey.
About KPMG in Canada
KPMG LLP, a Canadian limited liability partnership established under the
laws of Ontario, is the Canadian member firm affiliated with KPMG
International, a global network of professional firms providing Audit, Tax,
and Advisory services. Member firms operate in 148 countries and have more
than 113,000 professionals working around the world.
The independent member firms of the KPMG network are affiliated with KPMG
International, a Swiss cooperative. Each KPMG firm is a legally distinct and
separate entity, and describes itself as such.
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