Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) The * R&D entity has an amount under this section if:
(a) the entity, or another entity mentioned in subsection (5), receives or becomes entitled to receive a * recoupment from either of the following (otherwise than under the * CRC program):
(i) an * Australian government agency;
(ii) an STB (within the meaning of Division 1AB of Part III of the Income Tax Assessment Act 1936 ); and
(b) the recoupment is received, or the entitlement to receive the recoupment arises, during the present year; and
(i) the recoupment is of expenditure incurred on or in relation to certain activities; or
(ii) the recoupment requires expenditure (the project expenditure ) to have been incurred, or to be incurred, on certain activities.
Note: Paragraph (c) includes expenditure incurred in purchasing a tangible depreciating asset to be used when conducting R&D activities.
(2) The amount is equal to the sum of:
(a) so much of the expenditure referred to in subsection (1) that is deducted under this Division; and
(b) for each asset (if any) for which expenditure referred to in subsection (1) is included in the asset's * cost--each amount (if any) equal to the asset's decline in value that is deducted under this Division;
that is taken into account in working out * tax offsets under section 355 - 100 obtained by the * R&D entity for one or more income years.
Note: Paragraphs (a) and (b) of this subsection refer to amounts notionally deducted under this Division (see section 355 - 105).
Amount is reduced by any repayments of the recoupment
(3) For the purposes of subsection (2), reduce the expenditure referred to in subparagraph (1)(c)(i) by any repayments of the * recoupment during an income year.
Cap on extra income tax if recoupment relates to a project
(4) Despite subsection (2), if the * recoupment is covered by subparagraph (1)(c)(ii), the amount mentioned in subsection (2) for the present year cannot exceed the amount worked out using the following formula:
where:
"net amount of the recoupment" means the total amount of the * recoupment, less any repayments of the recoupment during an income year.
"R&D expenditure" means the amount mentioned in subsection (2), disregarding subsection (3).
(5) The other entities for the purposes of paragraph (1)(a) are as follows:
(a) an entity * connected with the * R&D entity;
(b) an * affiliate of the R&D entity or an entity of which
the R&D entity is an affiliate.