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SR&ED Consulting For the Energy Sector

In the quest for sustainable sources of energy and innovative technologies to optimize energy usage, the energy sector is at the forefront of scientific research and experimental development (SR&ED). The Canadian government appreciates these efforts, providing substantial SR&ED tax incentives to encourage further innovation. For energy businesses, The SR&ED tax incentive program can be invaluable, yet navigating its requirements and application can be complex. That’s where we step in. At G6 Consulting, we expertly provide SR&ED consulting for the energy sector guiding energy companies through the process and maximizing their tax incentives while ensuring a thorough, compliant claim.

What is SR&ED?

The Scientific Research & Experimental Development (SR&ED) program is a federal tax incentive designed to encourage Canadian businesses of all sizes and industries to conduct R&D in Canada. The program provides both refundable and non-refundable tax credits for eligible research activities.

How SR&ED Applies To The Energy Sector

The energy sector offers ample opportunities for claiming SR&ED tax credits. From experimenting with renewable energy technologies to developing energy-efficient methods or improving extraction and production methods, there’s potential for SR&ED within everyday operational challenges.

Typical SR&ED activities in the energy sector might include:

  • Developing novel technologies for oil extraction or natural gas production.
  • Research into the application and integration of renewable energy sources such as wind, solar and wave energy.
  • Advancement of energy storage, transport or distribution technologies.
  • Innovation in energy management systems, improving efficiency while reducing environmental impact.

SR&ED Tax Credits For The Energy Sector

Under the SR&ED program, companies can claim two types of investment tax credits (ITCs):

  • Refundable tax credits: can be used to receive cash refunds, handy for companies with low or no taxable income.
  • Non-refundable tax credits: can be used to offset taxable income.

Canadian-controlled private corporations (CCPCs) conducting qualified SR&ED activities can earn a 35% refundable ITC on the first $3 million of expenditure and a 15% non-refundable ITC on any expenditures exceeding this.

For non-CCPCs, including foreign-controlled corporations or public corporations, a 15% non-refundable ITC on all qualified expenditures is available.

Importantly, in the energy sector, the eligibility and rate of ITCs can vary depending on whether the expenditures are related to oil and gas or renewable energy activities.

Navigating Eligibility and Compliance

Determining what work qualifies for SR&ED within the energy sector isn’t always straightforward. Traditional R&D may be easy to identify; however, SR&ED also includes experimental development—work undertaken to achieve technological advancements for creating or improving materials, devices, or processes.

Key points to consider:

  • Technological uncertainties must be present. Incremental improvements can be claimed if they advance technology or scientific understanding.
  • A systematic approach must be adopted, with project evidence documenting the process, progress, failures, and successes.

Tailored SR&ED Consulting For The Energy Sector

At G6 Consulting, we’ve assisted scores of energy sector clients in identifying and claiming their SR&ED tax credits. Drawing on our deep understanding of the energy industry’s unique challenges and opportunities, we offer comprehensive consulting throughout the SR&ED process—from qualifying work identification to claim filing, reviewing and defence services.

The pursuit of innovative energy solutions is key to our sustainable future. Let us help you recoup your investments into this critical path, making the most of SR&ED to drive your business forward. Contact us today for tailored SR&ED consulting for the energy sector.


Get your SR&ED done right with G6 Consulting Inc – Canada’s R&D Tax Credit Experts!

G6 Consulting can work with you to build your claim, co-ordinate with your accountant, submit your claim and get you your cheque. No cost until you get paid

Check out our SR&ED overview page to learn more about SR&ED and how to qualify

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