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-W - Other matters  

SECTION 355-720   Certain related amounts may be reduced if notional deductions exceeded $100 million  

355-720(1)  
The object of this section is to prevent the portion of a *tax offset worked out using the *corporate tax rate being clawed back in later income years.

Note:

This applies when the R & D entity ' s notional deductions exceed $100 million (see subsection 355-100(3) ).

355-720(2)  
For the purposes of working out a matter referred to in column 1 of an item of this table for an income year (the present year ), the *R & D entity may choose to reduce the amount referred to in column 3 of that item if:


(a) subsection 355-100(3) applied to the R & D entity for an earlier income year or the present year (the excess year ); and


(b) the R & D entity ' s deductions for the excess year included deductions covered by a provision referred to in column 2 of that item.


Reducing extra income tax or amounts included in assessable income
Item Column 1
For the purposes of working out this matter:
Column 2
If its excess year deductions included those covered by:
Column 3
This can be reduced:
1 any amount to include in the *R & D entity ' s assessable income for the present year because of a *balancing adjustment event happening for an asset it *held (a) paragraph 40-292(1)(b) ; or
(b) paragraph 355-315(1)(c) ;
for the asset
its adjusted section 40-285 amount (see subsection 40-292(5) or 355-315(3) ) for the present year, the asset and the *balancing adjustment event
2 any amount of extra income tax payable by the *R & D entity under section 355-435 for the present year subsection 355-450(1) those excess year deductions
3 any amount to include in the *R & D entity ' s assessable income for the present year under section 355-465 paragraph 355-465(1)(b) those excess year deductions

Note 1:

Item 2 is about R & D recoupments and item 3 is about feedstock adjustments.

Note 2:

Reducing the amount in column 3 will reduce the amount in column 1.

355-720(3)  
The *R & D entity ' s circumstances may allow it to choose multiple reductions under subsection (2) for the present year. The total of any reductions cannot be more than the amount of its excess under subsection 355-100(3) for the excess year.

355-720(4)  
The way an *R & D entity prepares its income tax returns is sufficient evidence of the making of a choice under this section.

355-720(5)  
A choice under this section is irrevocable.


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