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INCOME TAX ASSESSMENT ACT 1997 - SECT 355.210

Conditions for R&D activities

             (1)  An * R&D activity covered by one or more of the following paragraphs is an activity to which this section applies:

                     (a)  the R&D activity is conducted for the * R&D entity solely within Australia;

                     (b)  if the R&D entity is a body corporate carrying on business through a permanent establishment (as described in subsection 355-35(2))--the R&D activity is conducted:

                              (i)  for the body corporate; but

                             (ii)  not for the purposes of that permanent establishment;

                            and the conditions in section 355- 215 (activities conducted for a body corporate by its permanent establishment) are met for the R&D activity;

                     (c)  the R&D activity is conducted for one or more foreign residents who are each:

                              (i)  incorporated under a * foreign law; and

                             (ii)  a resident of a foreign country for the purposes of an agreement of a kind described in subsection 355-35(2);

                            and the conditions in section 355- 220 (activities conducted for a foreign entity) are met for the R&D activity;

                     (d)  the R&D activity is:

                              (i)  conducted for the R&D entity solely outside Australia; and

                             (ii)  covered by a finding in force under paragraph 28C(1)(a) of the Industry Research and Development Act 1986 ;

                     (e)  the R&D activity consists of several parts, with:

                              (i)  some parts being conducted for the R&D entity solely within Australia; and

                             (ii)  the other parts being conducted for the R&D entity outside Australia while covered by a finding in force under paragraph 28C(1)(a) of the Industry Research and Development Act 1986 .

Note:          An activity can be covered by a finding under paragraph 28C(1)(a) of the Industry Research and Development Act 1986 if the activity cannot be conducted in Australia.

             (2)  However, an * R&D activity is not an activity to which this section applies if the activity is conducted, to a significant extent, for one or more other entities not covered by any paragraph of subsection (1).

Note:          An entity would not be covered by, for example, paragraph (1)(c) if the conditions in section 355- 220 were not met for the R&D activity in relation to that entity.



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