2018 SR&ED TAX CASES
| SR&ED TOPIC | APPELLANT | PRIMARY ISSUE | WIN / LOSS | RULING & RATIONALE | IMPLICATIONS & OPPORTUNITIES | SIGNIFICANCE | |
|---|---|---|---|---|---|---|---|
| Technological eligibility | |||||||
| Defining Prior Art | Lehigh | Advance if others have achieved? | LOSS | Need evidence of prior art search | Document at start of each project | MODERATE | |
| S58 shortcut to ruling | Lehigh | Can Judge omit need for evidence | LOSS | SR&ED issues to complex | No short-cut to ruling using S. 58 | MODERATE | |
| Systematic Investigation | Mac & Mac Hydrodemolition | Lack of records | LOSS | Lack of detailed measurements | Generate & retain evidence | MODERATE | |
| Financial issues | |||||||
| Intent of capital | VLN | If >90% SR&ED intent | LOSS | Actual SR&ED use 36% | Evidence of intent needs to explain use | LOW | |
| Fine for SR&ED fraud | Tempora | Level of fine | LOSS | Each of 3 charged 100% | fine is 300% of amount claimed | HIGH | |
| Government assistance | Borealis Geopower | Use of trust to defer recognition | LOSS | includes “expected to receive” | Use accrual basis when costs incurred | MODERATE | |
| Shareholder benefit | Guy Laliberte | Space flight $4 vs. $42 million | LOSS | full amount taxable | Denied as marketing expense | MODERATE | |