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INCOME TAX ASSESSMENT ACT 1997 - SECT 355.715

Implications for other deductions and tax offsets

             (1)  If an * R&D entity is entitled under section 355-100 to a * tax offset for an income year for expenditure it can deduct under section 355- 205, 355-480 or 355-580, that expenditure:

                     (a)  cannot be taken into account by any entity in working out a deduction under any other Division of this Act for any income year; and

                     (b)  cannot be taken into account by any entity in working out a tax offset under any other Division of this Act for any income year.

Note:          Section 355- 205 is about R&D expenditure, section 355-480 is about earlier year associate R&D expenditure, and section 355-580 is about CRC contributions.

             (2)  If an * R&D entity is entitled under section 355-100 to a * tax offset for an income year for a deduction under section 355- 305, 355- 315, 355-520 or 355- 525 of an amount equal to the decline in value of an asset, that decline in value:

                     (a)  cannot be taken into account by any entity in working out a deduction under any other Division of this Act (other than section 40-292 or 40-293) for any income year; and

                     (b)  cannot be taken into account by any entity in working out a tax offset under any other Division of this Act for any income year;

to the extent that the decline in value is attributable to the use of the asset for the purpose of conducting one or more of the * R&D activities to which the deduction relates.

Note 1:       A deduction may be available under section 40- 25 to the extent that the asset's decline in value is attributable to another purpose. If so, that deduction under section 40- 25 will not take into account the asset's decline in value to the extent that it is attributable to the R&D activities (see also subsection 40-25(2)).

Note 2:       Section 355- 305 is about the decline in value of R&D assets, section 355- 315 is about balancing adjustments for R&D assets, section 355-520 is about the decline in value of R&D partnership assets, and section 355- 525 is about balancing adjustments for R&D partnership assets.

Note 3:       Sections 40-292 and 40-293 deal with balancing adjustments when deductions have been available for the asset's decline in value both under this Division and section 40- 25.



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