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Clawback and R&D partnerships

Last updated 8 February 2023

There are special rules in Subdivision 355-J of the ITAA 1997 regarding the R&D tax incentive for certain types of partnerships known as R&D partnerships.

If you are a partner of an R&D partnership you may also have to include in your assessable income your proportion of the clawback adjustment for recoupments that relate to expenditure on R&D activities by the R&D partnership.

Specifically, you are taken to have:

  • incurred your proportion of partnership expenditure when the R&D partnership incurred that expenditure (including expenditure to acquire a depreciating asset)
  • received your proportion of the recoupment when the R&D partnership received the recoupment.

These deeming rules mean that each R&D entity that is a partner of an R&D partnership can then determine if a clawback adjustment applies, when it applies and work out the amount of the clawback adjustment.

R&D partnerships do not make a clawback adjustment.