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-D - Notional deductions for R & D expenditure  

SECTION 355-205   When notional deductions for R & D expenditure arise  

355-205(1)  
An *R & D entity can deduct for an income year (the present year ) expenditure it incurs during that year to the extent that the expenditure:


(a) is incurred on one or more *R & D activities:


(i) for which the R & D entity is registered under section 27A of the Industry Research and Development Act 1986 for an income year; and

(ii) that are activities to which section 355-210 (conditions for R & D activities) applies; and


(b) if the expenditure is incurred to the R & D entity's *associate - is paid to that associate during the present year.

Note 1:

If the matters in subparagraphs (a)(i) and (ii) are not satisfied until a later income year, the R & D entity will need to wait until then before it can deduct the expenditure for the present year.

Note 2:

The R & D activities will need to be conducted during the income year the R & D entity is registered for those activities (see sections 27A and 27J of the Industry Research and Development Act 1986 ).

Note 3:

The entity may also be able to deduct expenditure incurred to an associate in an earlier income year (see section 355-480 ).

Note 4:

Expenditure incurred in income years starting on or after 1 July 2011 may be deductible for activities registered for income years starting before 1 July 2011 (see section 355-200 of the Income Tax (Transitional Provisions) Act 1997 ).

355-205(2)  
This section has effect subject to section 355-225 (excluded expenditure), Subdivision 355-F (integrity rules) and subsection 355-580(3) (CRC contributions).


 

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