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  • Treating similar circumstances, arrangements or transactions as a single position

    Similar circumstances, arrangements or transactions are treated as a single position when all of the following apply:

    • the facts associated with a number of circumstances, arrangements or transactions are the same or similar for the purposes of the position, or are related to each other in a way that makes it necessary to take them into account together to determine their treatment for tax purposes
    • a common conclusion is reached on the tax treatment of those circumstances, arrangements or transactions – that is, there is a common basis for lodgment.

    Where you have treated similar circumstances, arrangements or transactions as a single position, you will only need to disclose them on the RTP schedule once, under a single RTP number. You should also state in the Concise description field that you have treated similar circumstances, arrangements, or transactions as a single position.

    Grouping positions relating to research and development tax offset claims

    Broadly, a research and development (R&D) tax offset claim can be made up of a number of R&D projects and a number of positions on a range of aspects of the R&D incentive. These positions impact on the final amount included on the income tax return – for example, whether the:

    • entity is an eligible R&D entity
    • expenditure included in the claim was incurred
    • the expenditure was incurred on eligible R&D activities
    • expenditure was at risk for R&D purposes
    • feedstock provisions have any application.

    An R&D tax offset claim reflected on the tax return may not be a single Category A or B position, instead there may be a number of positions taken within the R&D tax offset claim. Each of these positions must be considered separately to work out whether you have any material RTPs that you must disclose on the RTP schedule.

    However, even if you have a number of projects which make up your R&D tax offset claim, this does not necessarily mean that each project is treated as a separate Category A or B position.

    An R&D entity may decide not to apply the R&D feedstock provisions to certain expenditure incurred in an R&D project. If this decision on the application of the feedstock provisions was also adopted across a range of different R&D projects of the entity, then a single position will exist when all of the following apply:

    • the facts associated with the projects – that is, the circumstances, arrangements or transactions – are the same or similar for the purposes of the position, or are related to each other in a way that it makes it necessary to take them into account together to determine their treatment for tax purposes
    • a common conclusion is reached on the tax treatment of those projects – that is, there is a common basis for lodgment.

    Where the above factors are not satisfied, then these circumstances, arrangements or transactions are not treated as a single position.

    Last modified: 19 Dec 2019QC 58955