Income Tax Assessment Act 1936

Div 3 heading inserted by No 172 of 1978.

S 73RB repealed by No 93 of 2011, s 3 and Sch 3 item 44, effective 8 September 2011. For application, savings and transitional provisions see note under s 82KZLB . S 73RB formerly read:

SECTION 73RB INCREASES IN EXPENDITURE ON FOREIGN OWNED R & D BY ELIGIBLE COMPANIES  
73RB(1)
For the purposes of section 73QB , work out the increase in expenditure on foreign owned R & D by the eligible company as follows: Method statement

Step 1.

For the Y ₀ year of income, work out the amount of the expenditure on foreign owned R & D by the eligible company for the year of income (see subsection 73B(14C) and (14D) ) that was incurred by the company in its group membership period. The result is the expenditure on foreign owned R & D by the eligible company in its group membership period for the year of income.

Step 2.

For the Y ₀ year of income, work out how much (if any) of the initial clawback amount (if any) under section 73C relating to expenditure incurred by the eligible company is attributable to the expenditure on foreign owned R & D by the eligible company in its group membership period for the year of income.

Step 3.

Reduce (but not below zero) the result of step 1 for the year of income by the result of step 2 for the year of income. The result is the reduced expenditure on foreign owned R & D by the eligible company in its group membership period for the Y ₀ year of income.

Step 4.

For each of the Y _-1 , Y _-2 and Y _-3 years of income, work out the amount (the notional expenditure on foreign owned R & D by the eligible company in its group membership period for the year of income) of expenditure that:

(a) was incurred by the company in its group membership period; and

(b) would have been expenditure on foreign owned R & D by the eligible company for the year of income (see subsections 73B(14C) and (14D) ) if subsection 73B(2BA) had not been enacted.

Note 1:

This requires counting of expenditure relating to all activities that would have been research and development activities had they been carried on in accordance with a plan described in subsection 73B(2BA) (whether or not they were carried on in that way).

Note 2:

If all relevant activities were carried on in accordance with such a plan, and the eligible company ' s group membership period includes the whole of the year of income, the notional expenditure on foreign owned R & D by the eligible company in its group membership period for the year of income is the same as the expenditure on foreign owned R & D by the company for the year of income.

Step 5.

For each of the Y _-1 , Y _-2 and Y _-3 years of income, work out what would have been the amount of the eligible company ' s initial clawback amount (if any) under section 73C attributable to the notional expenditure on foreign owned R & D by the eligible company in its group membership period for the year of income if subsection 73B(2BA) had not been enacted.

Note:

This requires counting of grants and recoupments described in section 73C relating to expenditure on projects involving activities that would have been research and development activities had they been carried on in accordance with a plan described in subsection 73B(2BA) (whether or not they were carried on in that way).

Step 6.

For each of the Y _-1 , Y _-2 and Y _-3 years of income, reduce (but not below zero) the result of step 4 for the year of income by the result of step 5 for the year of income. The result is the reduced notional expenditure on foreign owned R & D by the eligible company in its group membership period for the year of income.

Step 7.

Add up:

(a) the reduced notional expenditure on foreign owned R & D by the eligible company in its group membership period for the Y _-1 year of income;

(b) the reduced notional expenditure on foreign owned R & D by the eligible company in its group membership period for the Y _-2 year of income; and

(c) the reduced notional expenditure on foreign owned R & D by the eligible company in its group membership period for the Y _-3 year of income.

Step 8.

Divide the result of step 7 by 3.

Step 9.

Subtract the result of step 8 from the reduced expenditure on foreign owned R & D by the eligible company for the Y ₀ year of income (see step 3). The result is the change in expenditure on foreign owned R & D by the eligible company .

Note:

The change in expenditure on foreign owned R & D by the eligible company may be a positive or negative number or zero.

Step 10.

The increase in expenditure on foreign owned R & D by the eligible company is:

(a) the change in expenditure on foreign owned R & D by the eligible company; or

(b) zero, if the change in expenditure on foreign owned R & D by the eligible company is a negative number.

73RB(2)
For the purposes of section 73QB , work out the total increase in expenditure on foreign owned R & D by the eligible companies in the group as follows: Method statement

Step 1.

For each group member that is an eligible company, work out the increase in expenditure on foreign owned R & D by the eligible company under subsection (1) of this section.

Step 2.

Total the results of step 1.

S 73RB inserted by No 164 of 2007 , s 3 and Sch 11 item 37, effective 25 September 2007. For application provision, see note under s 73B(1AAA) . For transitional provisions regarding reduced notional expenditure on foreign owned R & D, see note under s 73P(1) .