| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1051450065323
Date of advice: 5 November 2018
Ruling
Subject: Non-refundable tax offset rate under section 355-100 ITAA 1997
Is the Company entitled to a non-refundable tax offset equal to 40% of their eligible research and development (R&D) expenditure in their income year ended 31 December 20XX in lieu of 30 June 20XX?
Answer
Yes.
This ruling applies for the following periods:
1 January 20XX to 31 December 20XX
The scheme commences on:
1 January 20XX
Relevant facts and circumstances
The Company is an Australian private company that has an approved substituted accounting period (SAP) for income tax purposes of 1 January 20XX to 31 December 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 355-100
Reasons for decision
The non-refundable tax offset rate under items 2 or 3 of the table at subsection 355-100(1) is 40% for an eligible entity’s income year that begins 1 January 20XX and ends 31December 20XX.
The current non-refundable tax offset rate of 38.5% under items 2 or 3 of the table at subsection 355-100(1) replaced the former rate of 40% in those table items pursuant to Schedule 22 of the Budget Savings (Omnibus) Act 2016 (assented to 16 September 2016). However, pursuant to item 5 of Schedule 22, the new rate applies in relation to assessments for income years commencing on or after 1 July 20XX. That means if an income year begins before 1 July 20XX, the former rates apply for that income year.
Accordingly, where an entity has an approved substituted accounting period for income tax purposes that begins on 1 January each year, the non-refundable tax offset rate of 40% applies in relation to the income year commencing on 1 January 20XX and ending on 31 December 20XX.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
