Income Tax Assessment Act 1936

Div 3 heading inserted by No 172 of 1978.

 View history note

 Hide history note

S 73P repealed by No 93 of 2011, s 3 and Sch 3 item 44, effective 8 September 2011.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 73P formerly read:

SECTION 73P INTERPRETATION  
73P(1)
For the purposes of interpretation, this section and sections 73QA to 73Z (inclusive) are to be read and construed as if they were part of sections 73B , 73BA and 73BH .

 View history note

 Hide history note

History

S 73P(1) amended by No 164 of 2007 , s 3 and Sch 11 item 24, by substituting " 73QA " for " 73Q " , effective 25 September 2007. For application provision, see note under s 73B(1AAA) .

Act No 164 of 2007 , s 3 and Sch 11 item 80, contains the following transitional provisions:

80 Transitional provisions - reduced notional expenditure on foreign owned R & D  
(1)
This item has effect for the purposes of the application of sections 73P to 73Z (inclusive) of the Income Tax Assessment Act 1936 as amended by this Schedule, if:

(a) in its group membership period including all or part of the year of income (the initial year ) starting after 30 June 2007 and before 1 July 2008, an eligible company has incurred an amount of expenditure that is expenditure on foreign owned R & D by the eligible company in its group membership period for the year of income; and

(b) any of the 3 immediately preceding years of income were not nil expenditure years.

(2)
For the purposes of paragraph 73QB(1)(b) of the Income Tax Assessment Act 1936 , the eligible company is taken to have been able to deduct an amount under subsection 73B(14C) of that Act for each of the following years of income:

(a) the year of income before the initial year;

(b) the year of income 2 years before the initial year;

(c) the year of income 3 years before the initial year.

(3)
The reduced notional expenditure on foreign owned R & D by the eligible company in its group membership period for an earlier year of income described in the second column of an item of the table is taken to be the amount set out in the third column of that item.

Reduced notional expenditure on foreign owned R & D
Item	Earlier year of income	Amount of reduced notional expenditure on foreign owned R & D
1	The year of income before the initial year	90 % of the amount described in paragraph (1)(a)
2	The year of income 2 years before the initial year	80 % of the amount described in paragraph (1)(a)
3	The year of income 3 years before the initial year	70 % of the amount described in paragraph (1)(a)

(4)
To avoid doubt, this item has effect for the purposes of the application of sections 73P to 73Z (inclusive) of the Income Tax Assessment Act 1936 as amended by this Schedule not only for the initial year but also for the next 2 years of income.

Note:

This item will be relevant only to years of income assessments for which can be affected by the amount of reduced notional expenditure on foreign owned R & D for years of income before the initial year.

(5)
A term that is used in this item and has a meaning given by section 73B , or any of sections 73P to 73Z (inclusive), of the Income Tax Assessment Act 1936 as amended by this Schedule has the same meaning in this item.

73P(1A)
Subsection (1) of this section and subsection 73B(9) do not prevent a deduction under section 73QA or 73QB merely because those sections require account to be taken of expenditure incurred by an eligible company in relation to activities carried on wholly or primarily on behalf of a foreign company.

 View history note

 Hide history note

History

S 73P(1A) inserted by No 164 of 2007 , s 3 and Sch 11 item 25, effective 25 September 2007. For application provision, see note under s 73B(1AAA) .

73P(1B)
Subsection (1) of this section does not cause any of section 73CA to apply in relation to expenditure in respect of which deductions are available under both subsection 73B(14C) and section 73QB .

 View history note

 Hide history note

History

S 73P(1B) inserted by No 164 of 2007 , s 3 and Sch 11 item 25, effective 25 September 2007. For application provision, see note under s 73B(1AAA) .

73P(2)
In sections 73QA to 73Z (inclusive):

AA ₀
means a group ' s adjustment amount for the Y ₀ year of income.

AA _{− 1}
means a group ' s adjustment amount for the Y _{− 1} year of income.

adjustment amount
has the meaning given by section 73T .

adjustment balance
has the meaning given by section 73V .

commercial ready grant
means a subsidy or grant that:

(a) is paid to an eligible company under the program known as the Commercial Ready program; and

(b) includes a component for activities of the company that are research and development activities, or would be, apart from subsection 73B(2BA) ; and

(c) is for a year of income in relation to which the company is not registered as mentioned in subsection 73B(10) .

 View history note

 Hide history note

History

Definition of " commercial ready grant " inserted by No 78 of 2007 , s 3 and Sch 3 item 10, applicable to payments received on or after 6 May 2004.

group member
means a primary group member or a secondary group member.

group membership period
of an eligible company has the meaning given by section 73R .

incremental expenditure
means expenditure that:

(a) is research and development expenditure except:

(i) expenditure to lease or hire plant; and

(ii) expenditure under a contract to the extent that it is, in substance, for the acquisition of plant and not for the receipt of services; and

(b) can be taken into account in working out the amount of a deduction under subsection 73B(13) or (14) or could be taken into account in working out the amount of a deduction under subsection 73B(14) apart from paragraph 73B(14)(b) .

Note:

The effects of paragraph (b) of the definition of incremental expenditure include preventing a company from counting as incremental expenditure:

(a) expenditure that the company is required by subsection 73B(9) to disregard because it was incurred by the company for the purpose of carrying on research and development activities on behalf of another person; and

(b) expenditure on overseas research and development activities that is not certified expenditure and so is expenditure for which subsection 73B(17A) denies a deduction under subsection 73B(13) or (14) .

 View history note

 Hide history note

History

Definition of " incremental expenditure " substituted by No 164 of 2007 , s 3 and Sch 11 item 27, effective 25 September 2007. For application provision, see note under s 73B(1AAA) . The definition formerly read:

incremental expenditure
means expenditure that is research and development expenditure except:

(a) expenditure to lease or hire plant; and

(b) expenditure under a contract to the extent that it is, in substance, for the acquisition of plant and not for the receipt of services.

person
has the same meaning as in section 73H .

premium amount
(Repealed by No 164 of 2007 )

 View history note

 Hide history note

History

Definition of " premium amount " repealed by No 164 of 2007 , s 3 and Sch 11 item 28, effective 25 September 2007. For application provision, see note under s 73B(1AAA) . The definition formerly read:

premium amount
has the meaning given by section 73W .

primary group member
has the meaning given by section 73R .

R & D spend
of an eligible company and its group members for a year of income means the sum of:

(a) the amounts worked out for the year of income under steps 1, 2 and 3 of the method statement in subsection 73RA(1) as the reduced expenditure on Australian owned R & D by each eligible company in its group membership period for the year of income; and

(b) the amounts worked out for the year of income under steps 4, 5 and 6 of the method statement in subsection 73RB(1) as the reduced notional expenditure on foreign owned R & D by each eligible company in its group membership period for the year of income.

 View history note

 Hide history note

History

Definition of " R & D spend " substituted by No 164 of 2007 , s 3 and Sch 11 item 29, effective 25 September 2007. For application provision, see note under s 73B(1AAA) . The definition formerly read:

R & D spend
of an eligible company for a year of income means the sum of:

(a) the incremental expenditure of the eligible company for the year of income incurred during its group membership period; and

(b) the incremental expenditure of each group member of the eligible company for the year of income incurred during its group membership period.

RA ₀
(Repealed by No 164 of 2007 )

 View history note

 Hide history note

History

Definition of " RA ₀ " repealed by No 164 of 2007 , s 3 and Sch 11 item 30, effective 25 September 2007. For application provision, see note under s 73B(1AAA) . The definition formerly read:

RA ₀
means a group ' s running average for the Y ₀ year of income.

RA _{− 1}
(short for Running Average for the Y _{− 1} year of income) means half the sum of the R & D spend of the eligible company and its group members for the Y _{− 2} and Y _{− 3} years of income.

 View history note

 Hide history note

History

Definition of " RA _{− 1} " substituted by No 164 of 2007 , s 3 and Sch 11 item 31, effective 25 September 2007. For application provision, see note under s 73B(1AAA) . The definition formerly read:

RA _{− 1}
means a group ' s running average for the Y _{− 1} year of income.

running average
(Repealed by No 164 of 2007 )

 View history note

 Hide history note

History

Definition of " running average " repealed by No 164 of 2007 , s 3 and Sch 11 item 32, effective 25 September 2007. For application provision, see note under s 73B(1AAA) . The definition formerly read:

running average
for a particular year of income is worked out under section 73U .

secondary group member
has the meaning given by section 73R .

start grant
means a subsidy or grant paid to an eligible company:

(a) under an agreement between the company and the Board entered into under the program known as the R & D Start Program; and

(b) in respect of a year of income in relation to which the company is not registered as mentioned in subsection 73B(10) .

viable business
has the meaning given by section 73R .

 View history note

 Hide history note

History

S 73P(2) amended by No 164 of 2007 , s 3 and Sch 11 item 26, by substituting " 73QA " for " 73Q " , effective 25 September 2007. For application provision, see note under s 73B(1AAA) .

73P(3)
For the purposes of the definition of incremental expenditure in subsection (2), where expenditure under a contract is both for the acquisition of plant and for the provision of services, the expenditure must be apportioned on a reasonable basis between them.

73P(4)
None of the expenditure referred to in subsection (3) can be incremental expenditure if a reasonable apportionment is not possible.

73P(5)
A company ' s incremental expenditure for a year of income excludes the total group markup of the company for that expenditure (as worked out under subsection 73B(14AC) ).

73P(6)
In this section and in sections 73QA , 73QB , 73R , 73RA , 73RB , 73T and 73V , particular years of income are identified by the letter " Y " with a further identifier. Under that system:

(a) Y ₀ is the year of income for which an eligible company is working out its assessable income and deductions; and

(b) Y _{− 1} means the year of income before the Y ₀ year of income; and

(c) Y _{− 2} means the year of income 2 years before the Y ₀ year of income; and

(d) Y _{− 3} means the year of income 3 years before the Y ₀ year of income.

 View history note

 Hide history note

History

S 73P(6) amended by No 164 of 2007 , s 3 and Sch 11 item 33, by substituting " 73QA, 73QB, 73R, 73RA, 73RB, 73T and 73V " for " 73Q, 73R, 73S, 73T, 73U, 73V, 73W, 73X and 73Y " , effective 25 September 2007. For application provision, see note under s 73B(1AAA) .

S 73P inserted by No 170 of 2001.