Canada Tax Court Issues Decision Clarifying Criteria for SR&ED Expense Deduction

The Canadian Tax Court Dec. 5 issued Decision No. 2025 TCC 183, clarifying the criteria for scientific research and experimental development (SR&ED) activities. The taxpayer, a food processing company, claimed SR&ED deductions for expenses incurred for various projects. The Canadian Minister of National Revenue denied the deductions and the taxpayer appealed. On appeal, the Tax Court found that: 1) the taxpayer failed to show that the projects involved technological uncertainty, systematic testing of hypotheses that involved keeping detailed records of hypotheses tested and results, or the creation of a new or improved product or process that sought to address an ...