• Part A: Calculation of notional R&D deduction

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Show the notional R&D deduction amounts at Part A in whole dollars only. Do not multiply the amounts in Part A by the offset percentage to which the company is entitled, this is done in Part E - R&D tax offset calculation.

    In allocating notional R&D deduction amounts to the items 1 to 9 in Part A choose the item most appropriate to the expenditure or decline in value amount in question.

    Australian owned R&D column

    Show in this column all amounts that relate to R&D activities that the company has conducted for itself where it is a corporation that is:

    • incorporated under an Australian law, or
    • incorporated under foreign law but an Australian resident for income purposes.

    Foreign owned R&D column

    Show in this column all amounts that your company (an R&D entity) incurs for either:

    • itself, if it is a foreign corporation that is a resident of a country with which Australia has a comprehensive double tax agreement, or
    • another company that meets the above requirements.

    The activities must be conducted under a written agreement between the entities.

    Additionally, show amounts in this column for amounts incurred if the R&D entity is a foreign corporation carrying on business through a permanent establishment in Australia, where the R&D activities are conducted for itself and not also conducted for that permanent establishment.

    If you are claiming amounts in this column, you will also need to consider other taxation implications in regard to your related-party international dealings. For further information, see International dealings schedule instructions and the taxation rulings referred to within that publication.

    If an R&D entity is entitled under section 355-100 of the ITAA 1997 to an R&D tax offset for an income year for expenditure it can notionally deduct under sections 355-205, 355-480 or 355-580 of the ITAA 1997, that expenditure:

    • cannot be taken into account by any entity in working out a deduction under any provision for any income year, and
    • cannot be taken into account by any entity in working out another tax offset under any provision for any income year.

    If an R&D entity is entitled under section 355-100 of the ITAA 1997 to an R&D tax offset for an income year for the decline in value under sections 355-305, 355-315, 355-520 or 355-525 of the ITAA 1997, that decline in value (to the extent that the asset is used for the purpose of conducting R&D activities):

    • cannot be taken into account by any entity in working out a deduction under any other provision (other than section 40-292 or 40-293 of the ITAA 1997) for any income year, and
    • cannot be taken into account by any entity in working out another tax offset under any other provision for any income year.
    Danger

    Do not include any amounts at Part A for building expenditure, interest expenditure, core technology expenditure, non-arm's length amounts, not-at-risk amounts, group mark up amounts or expenditure incurred, but not paid, to associates.

    End of danger
    Last modified: 21 Dec 2012QC 26005