Income Tax Assessment Act 1997
The *R & D entity has an amount under this section if: (a) the entity, or another entity mentioned in subsection (5), receives or becomes entitled to receive a *recoupment from either of the following (otherwise than under the *CRC program):
(i) an *Australian government agency;
(b) the recoupment is received, or the entitlement to receive the recoupment arises, during the present year; and (c) either:
(ii) an STB (within the meaning of Division 1AB of Part III of the Income Tax Assessment Act 1936 ); and
(i) the recoupment is of expenditure incurred on or in relation to certain activities; or
(ii) the recoupment requires expenditure (the project expenditure ) to have been incurred, or to be incurred, on certain activities.
Paragraph (c) includes expenditure incurred in purchasing a tangible depreciating asset to be used when conducting R & D activities.355-440(2)
The amount is equal to the sum of: (a) so much of the expenditure referred to in subsection (1) that is deducted under this Division; and (b) for each asset (if any) for which expenditure referred to in subsection (1) is included in the asset ' s *cost - each amount (if any) equal to the asset ' s decline in value that is deducted under this Division;
that is taken into account in working out *tax offsets under section 355-100 obtained by the *R & D entity for one or more income years.
Paragraphs (a) and (b) of this subsection refer to amounts notionally deducted under this Division (see section 355-105 ).Amount is reduced by any repayments of the recoupment 355-440(3)
For the purposes of subsection (2), reduce the expenditure referred to in subparagraph (1)(c)(i) by any repayments of the *recoupment during an income year. Cap on extra income tax if recoupment relates to a project 355-440(4)
Despite subsection (2), if the *recoupment is covered by subparagraph (1)(c)(ii), the amount mentioned in subsection (2) for the present year cannot exceed the amount worked out using the following formula:
|Net amount of the recoupment||×||R & D expenditure|
The other entities for the purposes of paragraph (1)(a) are as follows: (a) an entity *connected with the *R & D entity; (b) an *affiliate of the R & D entity or an entity of which the R & D entity is an affiliate.