Yukon Research and Development (R&D) Tax Credit

Overview of the Yukon Research and Development (R&D) Tax Credit program:

The Yukon Research and Development (R&D) Tax Credit is a tax incentive program designed to encourage businesses operating in the Yukon Territory to invest in research and development activities. The program provides a tax credit that can be applied against a corporation’s Yukon territorial tax payable, reducing the financial burden associated with innovation and development efforts. This credit aims to stimulate innovation, foster economic growth, and enhance the competitiveness of businesses in the Yukon.

Benefits of the Yukon Research and Development (R&D) Tax Credit program:

• Tax Savings: Businesses can claim a tax credit of up to 15% of eligible R&D expenditures, which directly reduces the amount of Yukon corporate income tax payable. This provides significant financial relief, allowing businesses to reinvest savings into further R&D activities.
• Enhanced Innovation: The tax credit incentivizes companies to engage in R&D activities, leading to the development of new products, processes, and technologies that can enhance their market competitiveness.
• Economic Growth: By encouraging R&D, the program supports the overall economic development of the Yukon Territory, helping to create jobs and foster a more dynamic business environment.
• Leverage for Additional Funding: The Yukon R&D Tax Credit can be combined with other federal and provincial R&D incentives, maximizing financial support for innovation projects.
• Support for Small and Medium Enterprises (SMEs): The program is particularly beneficial for SMEs that may face challenges in funding their R&D

Eligibility criteria of the Yukon Research and Development (R&D) Tax Credit program:

• Yukon-Based Corporation: The applicant must be a corporation that is subject to Yukon corporate income tax and conducts R&D activities within the Yukon Territory.
• Eligible R&D Activities: The R&D activities must qualify under the definitions provided by the Canada Revenue Agency (CRA) for Scientific Research and Experimental Development (SR&ED). These activities typically include:
• Experimental Development: Advancing technology to create new or improve existing materials, devices, products, or processes.
• Applied Research: Conducting research aimed at solving practical problems with a specific objective.
• Basic Research: Research undertaken to increase scientific knowledge without a specific application in mind.
• Eligible Expenditures: The tax credit applies to qualifying R&D expenditures, including salaries, wages, materials, overhead, and contract payments directly related to the R&D activities.