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-D - Notional deductions for R & D expenditure  

SECTION 355-225   Expenditure that cannot be notionally deducted  

Expenditure on buildings, certain assets and interest

355-225(1)  
Sections 355-205 (deductions for R & D expenditure) and 355-480 (deductions for earlier year associate R & D expenditure) do not apply to the following expenditure:


(a) expenditure incurred to acquire or construct:


(i) a building or a part of a building; or

(ii) an extension, alteration or improvement to a building;


(b) expenditure included in the *cost of a tangible *depreciating asset for the purposes of Division 40 (as that Division applies as described in section 355-310 or otherwise);


(c) expenditure incurred for interest (within the meaning of Division 11A of Part III of the Income Tax Assessment Act 1936 ) payable to an entity.

Note 1:

Expenditure covered by paragraph (a) may be deductible under Division 43 (capital works).

Note 2:

The decline in value of an asset covered by paragraph (b) may be notionally deductible under section 355-305 .

Note 3:

Expenditure covered by paragraph (c) may be deductible under section 8-1 .

Expenditure on core technology

355-225(2)  
Sections 355-205 (deductions for R & D expenditure) and 355-480 (deductions for earlier year associate R & D expenditure) do not apply to expenditure incurred in acquiring, or in acquiring the right to use, technology wholly or partly for the purposes of one or more *R & D activities if:


(a) a purpose of the R & D activities was or is:


(i) to obtain new knowledge based on that technology; or

(ii) to create new or improved materials, products, devices, processes, techniques or services to be based on that technology; or


(b) the R & D activities were or are an extension, continuation, development or completion of the activities that produced that technology.


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