Income Tax Assessment Act 1936

Div 3 heading inserted by No 172 of 1978.

S 73C repealed by No 93 of 2011, s 3 and Sch 3 item 44, effective 8 September 2011. For application, savings and transitional provisions see note under s 82KZLB . S 73C formerly read:

SECTION 73C RECOUPED EXPENDITURE ON RESEARCH AND DEVELOPMENT ACTIVITIES  
73C(1)
For the purposes of interpretation, this section is to be read and construed as if it were part of section 73B .

73C(2)
This section applies where:

(a) an eligible company has, at any time on or after 1 July 1985, incurred expenditure (in this section called the relevant expenditure ) on research and development activities that formed or form part of a particular project carried on by or on behalf of the company; and

(b) the company has, whether before or after the commencement of this section, received, or become entitled to receive, a recoupment of, or a grant in respect of, the whole or any part of the relevant expenditure by or from the Commonwealth, a State or a Territory, an STB (within the meaning of Division 1AB ) or an authority constituted by or under a law of the Commonwealth, of a State or of a Territory, or another person has received or become entitled to receive such a recoupment or grant where the other person is, at the time of receipt or entitlement, grouped with the first-mentioned company as mentioned in section 73L .

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S 73C(2) amended by No 170 of 2001, No 169 of 1995 and No 216 of 1991.

73C(2A)
A reference in this section to a recoupment of, or a grant in respect of, the whole or any part of expenditure incurred by an eligible company on research and development activities that formed or form part of a particular project carried on by or on behalf of the company does not include a reference to a recoupment or grant where the recoupment or grant is made:

(a) by or from the Commonwealth; and

(b) under the program known as the Co-operative Research Centres Program.

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S 73C(2A) inserted by No 80 of 1992.

73C(3)
Where this section applies to a company in respect of relevant expenditure in relation to a particular project:

(a) the relevant expenditure is subject to the application of clawback in accordance with this section; and

(b) for the purposes of this section the initial clawback amount in relation to the relevant expenditure is an amount equal to twice the amount, or twice the total of the amounts, as the case may be, that the company or the grouped person (see paragraph (2)(b)) has received, or become entitled to receive, as a recoupment of, or as a grant in respect of, any of the relevant expenditure as mentioned in paragraph (2)(b).

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S 73C(3)(b) amended by No 170 of 2001.

73C(4)
A deduction is not allowable, and is to be taken never to have been allowable, under section 73B in respect of any relevant expenditure that was incurred before 21 November 1987 and in respect of which this section applies to the company, and that expenditure is, subject to the provisions of this section relating to clawback, to be disregarded for the purposes of the application of section 73B to the company.

73C(5)
The following subsections apply only if the relevant expenditure includes, or consists wholly of, expenditure incurred on or after 21 November 1987.

73C(6)
Where the relevant expenditure includes both expenditure incurred before 21 November 1987 and expenditure incurred on or after that date:

(a) if the initial clawback amount is equal to or less than the relevant expenditure that was incurred before that date, clawback applies to so much of the relevant expenditure that was incurred before that date as does not exceed the initial clawback amount; or

(b) if the initial clawback amount exceeds the relevant expenditure that was incurred before that date, the following provisions have effect:

(i) clawback applies to so much of the relevant expenditure as was incurred before that date;

(ii) if the excess (in the following subparagraphs called the excess clawback amount ) is equal to or greater than so much of the relevant expenditure as was or is incurred on or after that date (in this subsection called the deductible relevant expenditure ) - clawback applies to the whole of the deductible relevant expenditure;

(iii) if the excess clawback amount is less than the deductible relevant expenditure - clawback applies to so much of the deductible relevant expenditure as does not exceed the excess clawback amount;

(iv) for the purpose of applying clawback to deductible relevant expenditure as mentioned in subparagraph (iii):

(A) regard is to be had first to the earliest year of income of the company in which any deductible relevant expenditure was incurred and then, if necessary, in chronological order to each later year of income; and

(B) to the extent that clawback is applied to deductible relevant expenditure incurred in a year of income of the company, the excess clawback amount to be applied to such expenditure incurred in a later year of income is reduced accordingly; and

(C) if the part of the excess clawback amount that is applicable to deductible relevant expenditure incurred in a year of income is less than that expenditure and that expenditure comprises 2 or more kinds of expenditure - that part of the excess clawback amount is to be apportioned among those kinds of expenditure in such manner as the Commissioner determines, being an apportionment that will minimise any reduction in the deduction allowable to the company under section 73B , 73BA or 73BH in respect of that expenditure.

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S 73C(6) amended by No 170 of 2001.

73C(7)
Where the relevant expenditure consists wholly of expenditure incurred on or after 21 November 1987 the following provisions have effect:

(a) if the initial clawback amount is equal to or greater than the relevant expenditure - clawback applies to the whole of that expenditure;

(b) if the initial clawback amount is less than the relevant expenditure - clawback applies to so much of the relevant expenditure as does not exceed the initial clawback amount;

(c) for the purpose of applying clawback to relevant expenditure as mentioned in paragraph (b):

(i) subject to subparagraph (ii), regard is to be had to the years of income of the company in the following order:

(A) the year of income, or, in chronological order, each year of income, in which the company or the grouped person (see paragraph (2)(b)) received, or became entitled to receive, an amount that is taken into account in ascertaining the initial clawback amount;

(B) in reverse chronological order, each year of income before the year, or the earliest year, of income referred to in sub-subparagraph (A);

(C) in chronological order, each year of income to which regard has not been had under sub-subparagraph (A) or (B); and

(ii) if the company or the grouped person did not receive, or become entitled to receive, any part of the initial clawback amount until after the last year of income in which any of the relevant expenditure was incurred, regard is to be had first to the latest year of income in respect of which a deduction was allowed, or is allowable, under section 73B , 73BA or 73BH in respect of any of that expenditure or would have been allowable under that section if the company or the grouped person had not chosen a tax offset under section 73I and then, in reverse chronological order, to each of the earlier years of income; and

(iii) to the extent that clawback is applied to relevant expenditure incurred in a year of income of the company, the initial clawback amount to be applied to such expenditure incurred in another year of income is reduced accordingly; and

(iv) if the part of the initial clawback amount that is applicable to relevant expenditure incurred in a year of income is less than that expenditure and that expenditure comprises 2 or more kinds of expenditure - that part of the initial clawback amount is to be apportioned among those kinds of expenditure in such manner as the Commissioner determines, being an apportionment that will minimise any reduction in the deduction allowable to the company under section 73B , 73BA or 73BH in respect of that expenditure.

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S 73C(7) amended by No 170 of 2001.

73C(8)
Where clawback applies to contracted expenditure incurred on or after 21 November 1987, subsection 73B(13) has effect in relation to that expenditure as if there were omitted from that subsection multiplied by 1.25 .

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S 73C(8) amended by No 78 of 1996 and No 224 of 1992.

73C(9)
If clawback applies to expenditure (other than contracted expenditure) incurred on or after 21 November 1987, subsections 73B(4E) and (14), paragraph 73B(15)(a) , paragraph 73B(15)(a) and subsections 73BA(3) and 73BH(2) have effect as if multiplied by 1.25 were omitted from those subsections and that paragraph.

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[ CCH Note: The result of this amendment is that the words " paragraph 73B(15)(a) " appear twice consecutively in s 73C(9).]

S 73C(9) amended by No 170 of 2001, No 78 of 1996 and substituted by No 181 of 1994.

73C(10)
Except as provided by subsections (8) and (9), the application of clawback to any expenditure does not have any effect for the purposes of section 73B , 73BA or 73BH .

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S 73C(10) amended by No 170 of 2001.

S 73C inserted by No 167 of 1989.