Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 378 - Digital games (tax offset for Australian expenditure on digital games)  

Subdivision 378-B - Qualifying Australian development expenditure  

SECTION 378-40   Qualifying Australian development expenditure  

378-40(1)    
A company ' s qualifying Australian development expenditure on a *digital game is the company ' s *development expenditure on the game to the extent to which the expenditure:

(a)    satisfies subsection (2) ; and

(b)    is incurred for, or is reasonably attributable to, goods and services provided or acquired in Australia.

The relevance test

378-40(2)    
An item of a company ' s *development expenditure on a *digital game:

(a)    if the item of expenditure is substantially attributable to developing the game - satisfies this subsection in full; and

(b)    if the item of expenditure is not substantially attributable to developing the game - satisfies this subsection to the extent that the expenditure is attributable to developing the game.

Expenditure that does not qualify

378-40(3)    
For the purposes of a *digital game in respect of which a company applies for a certificate under subsection 378-25(1) (completion certificate), an item of the company ' s *development expenditure on the game is not qualifying Australian development expenditure to the extent it is incurred after the earliest of the following:

(a)    the day on which the game is *completed;

(b)    the day on which the company applies for the certificate;

(c)    the day on which the game has been available to the general public for the purposes of conducting testing for one year.

378-40(4)    
For the purposes of a *digital game in respect of which a company applies for a certificate under subsection 378-25(3) (porting certificate), an item of the company ' s *development expenditure on the game is not qualifying Australian development expenditure to the extent it is incurred after the earlier of the following:

(a)    the day on which the game is *ported;

(b)    the day on which the company applies for the certificate.

378-40(5)    
You cannot count the same expenditure as *qualifying Australian development expenditure for the purposes of more than one certificate under section 378-25 .

Example:

Expenditure on porting a digital game that is claimed as qualifying Australian development expenditure for the purposes of a certificate under subsection 378-25(3) (porting certificate) cannot be claimed for the purposes of a certificate under subsection 378-25(5) (ongoing development certificate).