IT 2635A - Addendum
Income tax: syndicated research and development arrangements
Please note that the PDF version is the authorised version of this ruling.
FOI status:may be released
NOTICE OF ADDENDUM
This Addendum amends Taxation Ruling IT 2635 as follows:
'Impact of Income Tax Assessment Act 1997 and transitional provisions
'40. Changes to the way in which section 73D of the Act applies have been introduced by Subdivision 20-A of the Income Tax Assessment Act 1997 ('the new Act'). The Subdivision includes in assessable income an amount received by way of insurance, indemnity or other recoupment if it is for a deductible expense and it is not otherwise assessable income. The Subdivision applies to an assessable recoupment of a loss or outgoing, whenever incurred, received in the 1997-98 income year or a later income year: see Subdivision 20-A of the Income Tax (Transitional Provisions) Act 1997.
'41. Section 73D, a reduction of deduction provision, has not been amended but continues to apply to assessments for the 1997-98 income year and later income years (except in relation to an amount received as recoupment in the 1997-98 income year or a later income year).
'42. The explanatory memorandum to the Tax Law Improvement Bill 1996 describes the application of the rewritten sections in Subdivision 20-A of the new Act as follows:"The rewritten sections will apply to recoupment amounts received in the 1997-98 or later income years...In some cases, however, it is necessary that some recoupment provisions of the 1936 Act apply to assessments for the 1997-98 and later income years when those provisions deal with recoupments that were received before the 1997-98 income year....These provisions are "reduction of deductions" recoupment provisions that apply to expenditure deductible over more than one year. Under these provisions, a recoupment may still affect a deduction in the 1997-98 income year or a later income year, even if the initial expenditure was incurred, and the recoupment was received, before the 1997-98 income year." '
Commissioner of Taxation
23 July 1997
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