SR&ED Excluded Work

• Market research or sales promotion

Market research, advertising, and sales promotion primarily aimed at marketing or selling products or services are not eligible for SR&ED.

• Quality control of materials, devices, products or processes

Quality control or quality assurance activities that focus on maintaining the quality or consistency of existing products or processes without seeking technological advancements are excluded. SR&ED is more concerned with activities that push the boundaries of current knowledge and capabilities.

• Routine development or testing

Routine development or testing work that involves standard practices, incremental improvements, or activities that are part of a business's regular course of operations. Routine tasks that do not advance scientific knowledge or resolve technological uncertainties are typically excluded.

• Research in the social sciences or the humanities

Research in the social sciences or the humanities typically does not meet the program's criteria for eligibility because it may not advance scientific knowledge or resolve technological uncertainties.

• Prospecting, exploring or drilling for, or producing, minerals, petroleum or natural gas

These activities related to these sectors, such as traditional exploration, drilling operations, or mineral extraction, do not qualify for SR&ED tax incentives.

• Commercial production of a new or improved material, device or product or the commercial use of a new or improved process

Work related to the production or commercialization of products or services, including scaling up production processes or achieving cost reduction goals, is generally excluded from SR&ED. The program is focused on the earlier stages of research and experimentation.

• Style changes

Style changes typically refer to cosmetic or aesthetic modifications that do not involve advancing scientific knowledge or resolving technological uncertainties. These changes are typically related to the appearance or design of a product or service rather than its underlying technology or functionality.

• Routine data collection

Pure data collection, market surveys, or activities that do not involve a systematic investigation to overcome technological uncertainties are not considered SR&ED-eligible.

• Duplication of Existing Knowledge

Duplicating existing knowledge or simply recreating known solutions without any scientific or technological uncertainties is not considered eligible.

• Training

Activities associated with employee training are typically not eligible unless they are directly related to a qualifying SR&ED project.