Précis: Tom and Gary McCrae each owned 50% of the shares of the taxpayer. The taxpayer paid each of them salary of $30 per hour based on the number of hours they spend in SRED activities. They did not receive salary for the time they spent in other corporate activities but did receive equal amounts of dividends each year. CRA pro-rated the SRED treatment based on total hours spend by each of them and the taxpayer appealed to the Tax Court. The Tax Court found that the amounts of salary claimed by the taxpayer fell within the definition of SRED and did not have to be pro-rated between SRED and non-SRED activities. The appeal was therefore allowed with costs.
AG Shield Ltd. v. R. - TCC: Salary paid to main shareholders was SRED expenseREAD MORE »