Income Tax Act — I-3.3 37
Scientific research and experimental development 37 (1) Where a taxpayer carried on a business in Canada in a taxation year, there may be deducted in computing the taxpayer’s income from the business for the year such amount as the taxpayer claims not exceeding the amount, if any, by which the total of (a) the total of all amounts each of which is an expenditure of a current nature made by the taxpayer in the year or in a preceding taxation year ending after 1973 (i) on scientific research and experimental development related to a business of the taxpayer, carried on in Canada and directly undertaken by the taxpayer, (i.01) on scientific research and experimental development related to a business of the taxpayer, carried on in Canada and directly undertaken on behalf of the taxpayer, (i.1) by payments to a corporation resident in Canada to be used for scientific research and experimental development carried on in Canada that is related to a business of the taxpayer, but only where the taxpayer is entitled to exploit the results of that scientific research and experimental development, (ii) by payments to (A) an approved association that undertakes scientific research and experimental development, (B) an approved university, college, research institute or other similar institution, (C) a corporation resident in Canada and exempt from tax under paragraph 149(1)(j), or (D) [Repealed, 1996, c. 21, s. 9(4)] (E) an approved organization that makes payments to an association, institution or corporation described in any of clauses A to (C) to be used for scientific research and experimental development carried on in Canada that is related to a business of the taxpayer, but only where the taxpayer is entitled to exploit the results of that scientific research and experimental development, or (iii) where the taxpayer is a corporation, by payments to a corporation resident in Canada and exempt from tax because of paragraph 149(1)(j), for scientific research and experimental development that is basic research or applied research carried on in Canada (A) the primary purpose of which is the use of results therefrom by the taxpayer in conjunction with other scientific research and experimental development activities undertaken or to be undertaken by or on behalf of the taxpayer that relate to a business of the taxpayer, and (B) that has the technological potential for application to other businesses of a type unrelated to that carried on by the taxpayer, and (b) the total of all amounts each of which is an expenditure of a capital nature that is (i) made by the taxpayer in the year or in a preceding taxation year on scientific research and experimental development carried on in Canada, directly undertaken by or on behalf of the taxpayer, and related to a business of the taxpayer, and (ii) in respect of property acquired that would be depreciable property of the taxpayer if this section were not applicable in respect of the property, other than land or a leasehold interest in land, (c) the total of all amounts each of which is an expenditure made by the taxpayer in the year or in a preceding taxation year ending after 1973 by way of repayment of amounts described in paragraph 37(1)(d), (c.1) all amounts included by virtue of paragraph 12(1)(v), in computing the taxpayer’s income for any previous taxation year, (c.2) all amounts added because of subsection 127(27), (29) or (34) to the taxpayer’s tax otherwise payable under this Part for any preceding taxation year, and (c.3) in the case of a partnership, all amounts each of which is an excess referred to in subsection 127(30) in respect of the partnership for any preceding fiscal period, exceeds the total of (d) the total of all amounts each of which is the amount of any government assistance or non-government assistance (as those terms are defined in subsection 127(9)) in respect of an expenditure described in paragraph (a) or (b) that, at the taxpayer’s filing-due date for the year, the taxp