INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 355 - Research and Development  

Subdivision 355-F - Integrity Rules  

SECTION 355-400   355-400   Expenditure incurred while not at arm ' s length  


If:


(a) an *R & D entity incurs expenditure to another entity on all or part of an *R & D activity; and


(b) either:


(i) when the R & D entity incurs the expenditure, the R & D entity and the other entity do not deal with each other at *arm ' s length; or

(ii) the other entity is the R & D entity ' s *associate; and


(c) the expenditure exceeds the *market value of the relevant R & D activity or part (as appropriate);

for the purposes of this Division, the R & D entity is treated as if the amount of expenditure it incurred on the relevant R & D activity or part (as appropriate) were equal to that market value.

Note:

For the purposes of a deduction under section 355-305 or 355-520 for an asset ' s decline in value, the arm ' s length rules in Division 40 apply as part of the notional application of that Division under that section.


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