Item 3 Other R&D expenditure

(relevant to Australian owned and foreign owned R&D)

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

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.

You cannot claim this type of expenditure in respect of Australian owned R&D unless your aggregate R&D amount is greater than $20,000.

You cannot claim this type of expenditure in respect of foreign owned R&D unless your expenditure on foreign owned R&D is greater than $20,000.

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

'Other R&D expenditure' does not include:

• core technology expenditure
• interest expenditure
• feedstock expenditure (show eligible feedstock expenditure and residual feedstock expenditure (Australian owned R&D only) as separate items)
• expenditure incurred acquiring or constructing tangible assets, plant, pilot plant (including certain prototypes) or a building, or extending, altering or making improvements to a building
• expenditure incurred acquiring or constructing a section 73BA depreciating asset
• other expenditure in respect of Australian owned R&D where your aggregate R&D amount is less than or equal to $20,000
• other expenditure in respect of foreign owned R&D where your expenditure on foreign owned R&D is less than or equal to $20,000

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

At I enter any amount of other R&D expenditure on Australian owned R&D claimable at 100%.

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

At K enter any amount of other R&D expenditure on foreign owned R&D.

More information

For more information, see:

• subsection 73B(1) of the ITAA 1936
• Guide to the R&D tax concession.