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LEGISLATIVE AMENDMENTS PENDING: Several proposed legislative
amendments, such as those concerning poly metallic mining and biogas/
biodigesters, are currently in abeyance due to the election cycle. The
rati昀椀cation of these amendments is anticipated post-election. Draft legislation
or consultation phases are underway for the Clean Electricity ITC and the EV
Supply Chain ITC.
EARLY WINS: It is noteworthy that the Canada Revenue Agency (CRA)
has processed 25 claims speci昀椀cally for the clean technology tax credit,
indicating that refunds are commencing.
HIGH LIKELIHOOD OF AUDIT: The CRA has indicated a high likelihood
of audits (potentially 100 per cent initially) for these claims, managed
by the Scienti昀椀c Research and Experimental Development (SRED, also
known as “SHRED”) directorate as part of their training process. These
tax incentives are intended to encourage businesses to conduct research
and development in Canada. The reported average audit duration is
approximately 100 days.
DOCUMENTATION AND DEMONSTRATION: Given the anticipated scrutiny
from the CRA, maintaining meticulous and comprehensive documentation is of
paramount importance. This includes evidence pertaining to labour conditions,
equipment eligibility, and signage. Organizations should ensure thorough
record-keeping to demonstrate reasonable e昀昀orts toward compliance.
CONSULT A PROFESSIONAL: Stakeholders in the clean technology sector are
encouraged to stay informed about further developments and to consult with
tax professionals for guidance in navigating tax credits.
James Sbrolla is a veteran of the 昀椀nancial and environmental
industries. Connie Vitello is editor of Environment Journal. To pitch
an idea for an upcoming Market Watch column, or to suggest a stock,
please contact connie@actualmedia.ca.
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