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-G - Clawback of R & D recoupments  

SECTION 355-450   Amount on which extra income tax is payable  

Amount on which extra income tax is payable

355-450(1)  
The extra income tax is payable for the trigger year on an amount (the R & D expenditure ) equal to the sum of:


(a) so much of the expenditure referred to in section 355-445 that is deducted under this Division; and


(b) for each asset (if any) for which expenditure referred to in section 355-445 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;

in working out *tax offsets under section 355-100 obtained by the entity (the recipient ), or an entity mentioned in subsection (4), for one or more income years.

Note 1:

Section 12B or 31 of the Income Tax Rates Act 1986 sets the rate at which the entity must pay extra income tax on this amount.

Note 2:

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

355-450(2)  
For the purposes of subsection (1), reduce the expenditure referred to in subparagraph 355-445(b)(i) by any repayments of the *recoupment during an income year. Cap on extra income tax if recoupment relates to a project

355-450(3)  
Despite subsection (1), if the *recoupment is covered by subparagraph 355-445(b)(ii) , the amount of extra income tax payable for the trigger year on the recoupment cannot exceed the following amount:


Net amount of the recoupment × R & D expenditure
Project expenditure

where:

net amount of the recoupment
means the total amount of the *recoupment, less any repayments of the recoupment during an income year.

Related entities

355-450(4)  
The other entities for the purposes of subsection (1) are as follows:


(a) an entity *connected with the recipient;


(b) an *affiliate of the recipient or an entity of which the recipient is an affiliate.


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