Canada Tax Court Issues Decision Clarifying R&D Expense Deduction, Investment Tax Credit

The Canadian Tax Court March 24 issued Decision No. 2023 CCI 35, clarifying the scientific research and experimental development (R&D) expense deduction, and the investment tax credit (ITC), for a taxpayer engaged in the manufacture and resale of handcrafted jewelry. The taxpayer claimed the incentives in relation to expenses incurred during the manufacturing process. The Canadian Minister of National Revenue denied the incentives on the basis that the taxpayer’s work didn’t involve scientific or technological uncertainty. On appeal, the court confirmed the denial, because: 1) the manufacturing activity in question could be solved by usual procedures known to competent specialists; ...