Item 3 Other R&D expenditure

At item 3 enter other R&D expenditure incurred directly in respect of R&D activities carried on by or on behalf of the company. (See paragraph (c) of the definition of 'research and development expenditure', subsection 73B(1) of ITAA 1936.)

Taxation Ruling IT 2552 states that overhead and administrative expenditure is directly in respect of R&D where:

• the eligible R&D activities contributed to all or an identifiable part of the expenditure being incurred, or
• the conduct of eligible R&D activities by the company would be materially impaired if the expenditure was not incurred.

Adjust the amount of other R&D expenditure claimed in accordance with the prepayment provisions (sections 82KZL to 82KZMF of ITAA 1936).

'Other R&D expenditure' does NOT include:

• core technology expenditure
• interest expenditure
• feedstock expenditure (show eligible feedstock expenditure and residual feedstock expenditure as separate items)
• expenditure incurred acquiring or constructing plant, pilot plant or a building, or extending, altering or making improvements to a building, and
• expenditure incurred acquiring or constructing a section 73BA of ITAA 1936 depreciating asset.

At H enter the total amount of other R&D expenditure incurred, excluding any amounts to be entered at items 4 or 5 (the base amount).

At I enter the amount of other R&D expenditure claimable at 100%.

At J enter any amount of other R&D expenditure claimable at 125%.

At K enter any amount of other R&D expenditure claimable at 150%.

The total of the amounts at I, J and K must equal the base amount otherwise, a warning message 'Your claim does not balance' will display in the Excel spreadsheet.

More information

For more information, see:

• subsection 73B(1) of ITAA 1936
• Taxation Ruling IT 2451
• Taxation Ruling IT 2442
• Taxation Ruling IT 2552
• Taxation Ruling IT 2552A
• Guide to the R&D tax concession