Canada: SRED Tax Credits
2008 may be the year when I personally change from a "cost center" to a "profit center" at my company as I help with our R&D tax credits report.
Basically, when a Canadian company employs a Canadian worker to do SR&ED - a strictly defined but wider definition than R&D - the government will pay you back somewhere around 48%-70% of the salary you paid out.
The government web site about this is a little confusing, indicating credits of more like 20%-35%, but what they don't say is that you weight wages by about 165% to include non-salary overhead for that employee. There are also province-specific parts that add to the total. The end result is much more than 20%.
Think about that. If you're a privately-held Canadian company, you can be getting back something like 70% of your R&D employee wages. It doesn't matter if you don't even turn a profit; "tax credits" means "free money," not tax writeoffs. It means that hiring Canadian developers has roughly the same cost as outsourcing development to India.
IANA (I Am Not an Accountant), please don't sue me, etc. But if you're a Canadian software company, do yourself a favour and apply for those tax credits.