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INCOME TAX ASSESSMENT ACT 1997 - SECT 355.105

Deductions under this Division are notional only

             (1)  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

Note:       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

Note:       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.

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

             (2)  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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