To qualify to receive the (SR&ED) tax incentive, the work, for the most part, must be conducted in Canada and must be either basic research, applied research or experimental development:
- Basic research: This is work carried out to advance scientific knowledge without a practical application in view. It is usually done in universities or research institutes.
- Applied research: This is also work carried out to advance scientific knowledge but, unlike basic research, it is done with a specific practical application in view.
- Experimental development: This work is carried out to achieve technological advancement.