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This is one reason why some companies have located engineers in Canada under subsidiaries. Canada not only allows you to deduct R&D costs as an expense, but the
by ttul 2y ago
This is one reason why some companies have located engineers in Canada under subsidiaries. Canada not only allows you to deduct R&D costs as an expense, but there is an extremely generous R&D tax credit that yields a negative tax rate on engineers. For Canadian controlled private companies, this represents as much as a 60% refundable tax credit on R&D salaries. For foreign-owned companies, the benefit is smaller but still significant.
The Trump tax policy was a bizarre move for a country that relies so heavily on homegrown innovation. But then again, so was the entire Trump presidency.
- ckcheng 2y agoWait, you saying in Canada a R&D software company can essentially sell a dollar (of SDE produced goods) for a dollar and get a tax refund from the government?
- ttul 2y agoIf the R&D is going toward intellectual property that is owned by the company, yes. And it doesn’t matter if the company is foreign or locally owned. The program is designed to foster companies hiring engineers and scientists to work in Canada to increase the brain trust within the country.