Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020 (92 of 2020)

Schedule 5   Enhancing the integrity of the R&D Tax Incentive

Part 2   R&D clawback and catch up amounts

Income Tax (Transitional Provisions) Act 1997

42   After subsection 40-292(3)

Insert:

Application of Division 355

(3A) In applying Division 355 of the new Act in relation to the asset for the income year, the R&D entity is taken to have:

(a) if the section 40-285 amount is an amount included in the R&D entity's assessable income - a clawback amount under section 355-447 of the new Act for the income year; or

(b) if the section 40-285 amount is a deduction - a catch up amount under section 355-466 of the new Act for the income year;

equal to the following amount:

where:

adjusted section 40-285 amount means:

(a) if the section 40-285 amount is a deduction - the amount of the deduction; or

(b) if the section 40-285 amount is an amount included in the R&D entity's assessable income - so much of the section 40-285 amount as does not exceed the total decline in value.

total decline in value means the cost of the asset less its adjustable value.