Item 4 is a component of paragraph (c) of the definition of research and development expenditure in subsection 73B(1) of ITAA 1936 'Other R&D expenditure'. You will need to show any expenditure incurred under a contract to another party (other than a RRA) that is directly for R&D activities carried on by or on behalf of the company.
This item excludes:
- contracted expenditure carried out by an RRA (enter this at item 1), and
- expenditure under a contract that is, in substance, for the acquisition of plant.
Adjust the amount of 'contract other' expenditure you claim in accordance with the prepayment provisions (sections 82KZL to 82KZMF of ITAA 1936). Subsection 73B(9) of ITAA 1936 does not allow a deduction for expenditure incurred on R&D activities on behalf of any other person.
If the payment is to another group member, adjust the amount of expenditure claimed in accordance with the intra-group mark-up provisions (subsections 73B(14AA)-(14AD) of ITAA 1936).
At N enter the total amount of contract other expenditure incurred (the base amount).
At O enter any amount of the contract other expenditure claimable at 100%.
At P enter any amount of the contract other expenditure claimable at 125%.
At Q enter any amount of the contract other expenditure claimable at 150%.
The total of the amounts at O, P and Q must equal the base amount otherwise, a warning message 'Your claim does not balance' will display in the Excel spreadsheet.
More information
For more information, see:
- subsection 73B(1) of ITAA 1936
- Taxation Ruling IT 2451
- Taxation Ruling IT 2442
- Guide to the R&D tax concession