rreiner
Open to senior management and Board roles primarily in cybersecurity, as well as IoT, AI, blockchain -- Past roles include 3 x as CEO, 1 x as President, 2 x as Chairman, 1 x a Executive Chairman, 1 x as independent Board member
Location: Montreal, Quebec, Canada -- also have EU citizenship Remote: sure Willing to relocate: unlikely Résumé/CV: https://www.linkedin.com/in/richardreiner/ Email: Use LinkedIn please
This is of some immediate interest to me, so I've been digging into it a bit this morning -- I've been reading CRA's internal guide for SR&ED reviewers, and other fun things. Seems like a nice structure, if it works, i.e. if it stands up to audit scrutiny. It seems to me counterintuitive that a CDN consulting firm taking no financial risk when doing SR&ED for a US customer would be eligible.
Many of the CRA guidance docs cite IP ownership as an eligibility condition. They also point to forms T1145 and T1146 as the mechanism to transfer SR&ED costs & credits between non-arms-length parties, but these apply when both parties are Canadian. In your case you've got non-arms-length parties, one US and one CDN. I can't find any specific CRA statement that applies.
But ultimately all those CRA docs are just guidance,and the ITA prevails. Can you point to the section of the ITA that blesses what you're doing here?
One question: you say "Because QC-inc is just like any other Canadian entity, it was eligible for SR&ED."
But if QC-Inc was doing consulting work, i.e. developing products & technology on contract for another entity (Karabunga), then that work would not be eligible for SR&ED -- an entity isn't eligible unless it retains the IP rights.
How did you work around that?