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

Schedule 5   Enhancing the integrity of the R&D Tax Incentive

Part 2   R&D clawback and catch up amounts

Income Tax (Transitional Provisions) Act 1997

54   Subsections 355-325(4A) to (4D)

Repeal the subsections, substitute:

Application of Division 355

(4A) In applying Division 355 of the new Act in relation to the asset for the income year, if one or more partners (including the partner) in the R&D partnership is entitled under section 355-100 of the new Act to tax offsets for one or more income years for deductions under section 355-520 of that Act for the asset, the partner is taken to have:

(a) if an amount is taken to be included in the R&D entity's assessable income for the event year as mentioned in subsection (4) of this section - a clawback amount under section 355-448 of the new Act for the income year equal to the amount mentioned in subsection (4B) of this section; or

(b) if the partner is taken to be able to deduct an amount as mentioned in subsection (3) of this section - a catch up amount under section 355-467 of the new Act for the income year equal to the amount of that deduction.

(4B) The amount is an amount equal to the partner's proportion of the following:

where:

adjusted section 40-285 amount means so much of the section 40-285 amount as does not exceed the total decline in value.

sum of new law deductions means the sum of each partner's deductions under section 355-520 of the new Act mentioned in subsection (4A) of this section.

total decline in value means the asset's cost, less its adjustable value, worked out under Division 40 of the new Act as it applies as described in subsection (2) of this section.