What is a feedstock adjustment?
A feedstock adjustment is an amount you include in your assessable income. It applies when you obtain an R&D tax incentive offset for your feedstock expenditure incurred on R&D activities, where those activities produce either of the following:
- marketable products
- products you apply to your own use.
The feedstock adjustment applies to expenditure on the following:
- goods or materials (feedstock inputs) that are transformed or processed during R&D activities in producing one or more tangible products (feedstock outputs)
- energy that is input directly into that transformation or processing.
The feedstock provisions apply to both core and supporting R&D activities that transform or process feedstock inputs. The provisions are not confined to mass production activities.
Where a feedstock adjustment is triggered, you must include an amount in your assessable income. This may be in the current or in a future income year, depending on when the output is sold or applied.