Income Tax Act s. 127(9): Definition of Government Assistance

Government assistance (grants, subsidies, forgivable loans, provincial R&D credits and the like) reduces the expenditure base on which federal SR&ED investment tax credits are calculated. The definition in subsection 127(9) determines what counts, and it is deliberately broad: it catches “any other form of assistance” from any government, municipality or public authority. Whether a particular receipt, for example IRAP funding or a provincial credit, is government assistance is a recurring question in SR&ED claim preparation.

Text of the Provision

127(9) “government assistance” means assistance from a government, municipality or other public authority whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance other than as a deduction under subsection 127(5) or 127(6);

Source: Income Tax Act (Canada), subsection 127(9), definition “government assistance”, as consolidated May 14, 2010. Archived excerpt; subsequent amendments are not reflected. For the current text see the Income Tax Act at Justice Laws.