Income Tax Assessment Act 1997



Division 355 - Research and Development  

Subdivision 355-C - Entitlement to tax offset  

SECTION 355-105   Deductions under this Division are notional only  

An amount (the notional amount ) that an *R & D entity can deduct under this Division is disregarded except for the purposes of:

(a) working out whether the R & D entity is entitled under section 355-100 to a *tax offset; and

(b) a provision (of this Act or any other Act) that refers to an entitlement of the R & D entity under section 355-100 to a tax offset; and

(c) a provision (of this Act or any other Act) that:

(i) prevents some or all of the notional amount from being deducted; or

(ii) changes the income year for which some or all of the notional amount can be deducted; and

Examples are Divisions 26 and 27 of this Act, Subdivision H of Division 3 of Part III of the Income Tax Assessment Act 1936 and Part IVA of that Act.

(d) a provision (of this Act or any other Act) that includes an amount in assessable income wholly or partly because of the notional amount; and


An example is Subdivision 20-A , which may include in assessable income a recoupment of a loss or outgoing if the entity can deduct an amount for the loss or outgoing.

(e) a provision (of this Act or any other Act) that excludes expenditure from:

(i) the *cost base or *reduced cost base of a *CGT asset; or

(ii) an element of that cost base or reduced cost base.

An example is section 110-45 , which may exclude deductible expenditure from elements of the cost base of an asset.


Subsection (1) does not apply to amounts that the *R & D entity can deduct under the following:

(a)  subsection 355-315(2) ;

(b)  subsection 355-475(1) ;

(c)  subsection 355-525(2) .


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