Ontario Business Research Institute Tax Credit

To be eligible for the Ontario Business-Research Institute Tax Credit, corporations must meet the following criteria: 1. Carry on business in the tax year through a permanent establishment in Ontario. 2. Not be exempt from corporation income tax. 3. Enter into an eligible contract with an eligible research institute. 4. Not be connected to the eligible research institute. Eligible research institutes generally include Ontario universities, Ontario community colleges, hospital research institutes (large teaching hospitals), Ontario Centres of Excellence, federal Network of Centres of Excellence operating in Ontario, and non-profit organizations designated as eligible research institutes by the Ontario Minister of Finance. Corporations are considered connected to an eligible research institute during a tax year if: - The eligible research institute owns shares of the corporation with more than 10% of the voting rights attached to voting securities or a fair market value of more than 10% of the total issued shares. - The eligible research institute and the corporation are members of the same partnership or do not deal at arm's length. - A partnership where the eligible research institute is a member owns shares of the corporation. - The corporation and the eligible research institute are connected under prescribed rules. Additionally, an eligible contract is an agreement between the corporation and an eligible research institute to perform scientific research and experimental development in Ontario related to a business carried on in Canada by the corporation, with the corporation entitled to exploit the results of the research. Qualified expenditures must be made as a payment of money, qualify for the federal investment tax credit, and be incurred for scientific research and experimental development performed by the eligible research institute in Ontario. Corporations can claim the tax credit on Schedule 568 and file it with their T2 corporation income tax return. It is important to complete and file Schedule 569 for each eligible contract.

There are evaluation and selection criteria for this grant.

• The corporation must carry on business in Ontario through a permanent establishment
• The corporation must not be exempt from corporation income tax
• The corporation must enter into an eligible contract with an eligible research institute
• The corporation must not be connected to the eligible research institute
• The eligible research institute must meet the criteria specified
• The contract must meet certain requirements and be entered into after a specified date
• The expenditure must qualify as a qualified expenditure with an eligible research institute

To apply for the Ontario Business-Research Institute Tax Credit, eligible corporations need to follow these steps: 1. Ensure your corporation carries on business through a permanent establishment in Ontario and is not exempt from corporation income tax. 2. Enter into an eligible contract with a qualified research institute in Ontario to perform scientific research and experimental development work related to your business in Canada. 3. Make qualified expenditures on the research and development work that meet the criteria outlined in the program. 4. Claim the tax credit on Schedule 568 and file it with your T2 corporation income tax return, along with completing and filing Schedule 569 for each eligible contract. 5. Submit the necessary documentation and forms to the Canada Revenue Agency who administers the tax credit on behalf of Ontario. If you have any questions, you can contact the Canada Revenue Agency at 1-800-959-5525 for assistance.

- Qualified expenditures are capped at $20 million annually with a maximum tax credit of $4 million. - Eligible research institutes include Ontario universities, community colleges, hospital research institutes, and non-profit organizations designated by the Ontario Minister of Finance. - Corporations can claim the tax credit on Schedule 568 and must file it with their T2 corporation income tax return. - Each eligible contract must be completed and filed using Schedule 569. - The Canada Revenue Agency administers the tax credit on behalf of Ontario through the federal income tax system. - For further questions, applicants can contact the Canada Revenue Agency at 1-800-959-5525.