Calculation instructions
An eligible company cannot deduct any amount under section 73B (except subsection 73B(14C)), 73BA, 73BH or 73QA for the tax offset year, if it chooses the R&D tax offset for that year. The R&D tax offset does not apply to deductions under subsection 73B(14C) (deduction for expenditure on foreign owned R&D) and under section 73QB (extra deduction for increase in expenditure on foreign owned R&D).
The company can choose to take the R&D tax offset in its company tax return (which includes the research and development tax concession schedule), or by notice in writing to the Commissioner. See Guide to the R&D tax concession for information about the time periods for giving this notice.
The company must be registered with Innovation Australia before it makes its choice.
End of attentionThe company cannot choose to take the R&D tax offset if, at any time during the R&D tax offset year, an exempt entity, the affiliates of an exempt entity, an exempt entity together with its affiliates or two or more exempt entities, legally or beneficially own, or have the right to acquire, the legal or beneficial ownership of interests in the company that carry between them the right to:
- exercise, or control the exercise of, at least 25% of the voting power of the company, or
- receive at least 25% of any distribution of income or capital by the company (refer to subsection 73J(2) of the ITAA 1936).
If you wish to find out whether a company meets the threshold tests for the R&D tax offset, enter the company name, tax file number and (if any) the names and tax file numbers of all entities that are grouped with the company at any time in the year under section 73L of the ITAA 1936, at item 1 in part F of the Research and development tax concession schedule 2010.
In the columns 'Aggregate R&D amount' and 'Entity turnover', enter the amount of each entity's aggregate research and development amount, as defined in subsection 73B(1), and the R&D turnover respectively against the entity's TFN. If you have certain expenditure on research and development activities that you cannot deduct under the R&D tax concession (for example, capital works deductions for buildings used for the purpose of carrying out research and development activities), that expenditure will still form a part of the aggregate research and development amount. Certain expenditures on overseas research and development activities may also form a part of the aggregate research and development amount (see the instructions to item 1 in part B for further details regarding other adjustments that may be required to calculate the aggregate research and development amount of the company and other entities in the group).
If you are calculating the group aggregate research and development amount and R&D group turnover for your company, which is grouped with another company with a substituted accounting period, you should use the 12-month period that is your company's tax offset year and not the 'year of income' of the group member.
If your company has a transitional substituted accounting period that is less or greater than 12 months, you should use the 12-month period that is the tax offset year of your company to calculate the group aggregate research and development amount and R&D group turnover.
If you are using the relevant amounts from part A to determine the aggregate research and development amount of the company, you will need to take into account the above and make any necessary adjustments. Such adjustments relating to the aggregate research and development amount should be included at X item 1 in part B of the Research and development tax concession schedule 2010. These adjustments must also be incorporated in the calculation of the aggregate research and development amount of the company and R&D group members at item 1 in part F of the Research and development tax concession schedule 2010. Adjustments to the R&D group turnover should also be taken into account to calculate the R&D group turnover recorded at that item.
Attach an additional table if there is not enough space to list all group entities. If using an additional table, make sure you enter the sum of the aggregate research and development amounts and the entities' turnover amounts in row e item 1 in part F of the Research and development tax concession schedule 2010.
Total the aggregate research and development amounts and entity turnover amounts, and write the totals at B and C item 1 in part F of the Research and development tax concession schedule 2010 and then transfer these totals to table19.