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

Schedule 4   Enhancing the R&D Tax Incentive

Income Tax Assessment Act 1997

10   At the end of Subdivision 355-C

Add:

355-115 Working out an R &D entity's total expenses

(1) For the purposes of subsection 355-100(1A), an *R&D entity's total expenses for an income year is the sum of the amounts covered by subsection (2).

(2) The following amounts are covered by this subsection:

(a) the *R&D entity's total expenses for the income year worked out in accordance with:

(i) the *accounting principles; or

(ii) if accounting principles do not apply in relation to the R&D entity - commercially accepted principles relating to accounting;

(b) any amount the R&D entity can deduct for the income year as mentioned in subsection 355-100(1), to the extent the amount is not covered by paragraph (a) for the income year.

Amounts counted once only

(3) For the purposes of subsection (2):

(a) disregard an amount to which paragraph (2)(a) otherwise applies if paragraph (2)(b) has previously applied in relation to the amount; and

(b) disregard an amount to which paragraph (2)(b) otherwise applies if paragraph (2)(a) has previously applied in relation to the amount.