A subsidiary, which carries out SR&ED work on its own behalf and on behalf of its parent, uses the proxy method under s. 37(8)(a)(ii)(B. Before discussing whether the parent (whose employees performed administrative support tasks directly related to the SR&ED performed by the subsidiary) deduct, pursuant to s. 37(1)(a), the expenditures for such administrative support using the traditional method under s. 37(8)(a)(ii)(A), CRA stated:
[E]ven if tasks are not SR&ED of a taxpayer, they may qualify as SR&ED of the taxpayer pursuant to subsection 37(13) if the taxpayer performs those tasks for a person or partnership, at a time when they are not dealing with each other at arm's length, as long as those tasks would be SR&ED if they were performed by the person or partnership. For example, administrative support tasks in respect of the activities of a subsidiary of a taxpayer would not be considered to be SR&ED of the taxpayer because the condition in paragraph 37(13)(b) is not satisfied since the administrative support tasks would not be SR&ED of the subsidiary (as defined in subsection 248(1)) if they were performed by the subsidiary.