A CCPC has the chance of getting an investment tax credit of 35% for the first 3 million dollars of expenditure in research and development in Canada. The CCPC can then earn 20% of the subsequent expenditure. Other types of companies such as corporations, proprietorship, partnerships and trusts are eligible for a tax credit of 20% for all the qualified expenditure they spent on research and development in Canada.
If a CCPC’ s taxable income does not exceed the qualifying income limit then they may receive a portion of the credit as tax refund after using the credits to reduce their taxable income. Proprietorship and certain trusts may also receive a partial refund for their credits after using the credits to reduce their taxable income. However, corporations other than CCPC may not receive a refund for the tax credit earned for research and development expenditure. They can only use the credits to reduce their taxable income.