Item 1



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End of attention

Contracted expenditure - RRA

(relevant to Australian owned and foreign owned R&D)

Show at this item expenditure incurred by an eligible company to a registered Australian research agency (RRA) for the performance by the RRA of research and development activities on behalf of the company or wholly or primarily on behalf of a grouped foreign company. The Definitions list defines 'registered Australian research agency (RRA)'.

The RRA must not be an associate of the eligible company and must have been registered with Innovation Australia in respect of the class of activities on which the expenditure was incurred.

Expenditure incurred on Australian owned R&D cannot be 'contracted expenditure' unless, when the expenditure was incurred, the eligible company was capable of using, or had formulated a plan to use, any results of the R&D directly in connection with a business that the company carried on or proposed to carry on (subsection 73B(1B) of the ITAA 1936). This restriction does not apply to expenditure incurred on foreign owned R&D.

At item 1 show eligible expenditure on items included in paragraph (c) of the definition of 'contracted expenditure' under subsection 73B(1) of the ITAA 1936. These amounts should be adjusted as required under subsection 73B(11) of the ITAA 1936 for advance R&D expenditure and accelerated expenditure.

At A show the total amount of eligible contracted expenditure (the base amount).

At B show any amount of contracted expenditure on Australian owned R&D claimable at 100%.

At C show any amount of contracted expenditure on Australian owned R&D claimable at 125%.

At D show any amount of contracted expenditure on foreign owned R&D.

The total of the amounts at B, C and D must equal the base amount at A.

For more information, see:

  • subsections 73B(1), 73B(1B), 73B(13), 73B(14C) and 73B(14D) of the ITAA 1936
  • Guide to the R&D tax concession.
Last modified: 02 Jun 2010QC 22870