Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020 (92 of 2020)

Schedule 5   Enhancing the integrity of the R&D Tax Incentive

Part 2   R&D clawback and catch up amounts

Income Tax (Transitional Provisions) Act 1997

44   After subsection 40-293(3)

Insert:

Application of Division 355

(3A) In applying Division 355 of the new Act in relation to the asset for the income year, an R&D entity (the partner ) that is a partner in the R&D partnership and is entitled to one or more new law deductions for one or more income years for the asset, is taken to have:

(a) if the section 40-285 amount is an amount included in the R&D partnership's assessable income - a clawback amount under section 355-449 of the new Act for the income year; or

(b) if the section 40-285 amount is a deduction - a catch up amount under section 355-468 of the new Act for the income year;

equal to the partner's proportion of the following amount:

where:

adjusted section 40-285 amount means:

(a) if the section 40-285 amount is a deduction - the amount of the deduction; or

(b) if the section 40-285 amount is an amount included in the R&D partnership's assessable income - so much of the section 40-285 amount as does not exceed the total decline in value.

sum of new law deductions means the sum of each partner's new law deductions mentioned in paragraph (2)(b) of this section.

total decline in value means the cost of the asset less its adjustable value.