Taxation Laws Amendment (Research and Development) Act 2001 (170 of 2001)

Schedule 3   Refundable tax offset

Income Tax Assessment Act 1936

2   After subsection 73B(14)

Insert:

(14AA) A part of an eligible company's deduction for a year of income under subsection (13) or (14) in respect of a particular amount of research and development expenditure (the R&D amount ) is worked out by multiplying the R&D amount by 1 rather than 1.25 if subsection (14AB) applies to the R&D amount.

(14AB) This subsection applies to an R&D amount of an eligible company for a year of income if:

(a) any other person (within the meaning of section 73H) incurred expenditure during that year of income or an earlier one in respect of all or a part of the things for which the R&D amount was for; and

(b) the other person was grouped with the eligible company as mentioned in section 73L at the time the expenditure was incurred by the other person.

(14AC) The part of the eligible company's R&D amount for the year of income that is multiplied by 1.25 under subsection (13) or (14) is:

(R&D amount - Total group markup)

where:

total group markup is:

(a) the sum of the amounts derived by persons during the year of income for goods or services in respect of all or a part of the things for which the R&D amount was for while those persons were grouped with the eligible company as mentioned in section 73L; less

(b) the actual cost to those persons of providing those goods or services.

(14AD) The part of the eligible company's R&D amount for the year of income that is multiplied by 1 rather than 1.25 is the part of the R&D amount representing the total group markup.