CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-45
-
RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS
Division 355
-
Research and Development
History
Div 355 inserted by No 93 of 2011, s 3 and Sch 4 item 15, effective 8 September 2011.
No 93 of 2011, s 3 and Sch 4 items 1 to 6 contains the following application, savings and transitional provisions:
Schedule 4
-
Application, savings and transitional provisions
Part 1
-
Application provisions
1 Application of repeals and amendments
(1)
The repeals and amendments made by this Act apply:
(a)
so far as they affect assessments
-
to assessments for income years commencing on or after 1 July 2011; and
(b)
so far as they relate to income years but do not affect assessments
-
to income years commencing on or after 1 July 2011; and
(c)
otherwise
-
to acts done or omitted to be done, states of affairs existing, or periods ending on or after the commencement of the first income year commencing on or after 1 July 2011.
Note:
For the purposes of an assessment for an income year commencing on or after 1 July 2011, regard may still be had to acts done or omitted to be done, states of affairs existing, or periods ending during an earlier income year. For example, regard may be had to expenditure incurred by other entities in income years commencing before 1 July 2011 for the purposes of paragraph
355-415(1)(b)
of the
Income Tax Assessment Act 1997
.
(2)
However, each of the following applies in relation to the 2011-12 financial year and all later financial years:
(a)
section
29E
of the
Industry Research and Development Act 1986
(as inserted by Schedule 2);
(b)
the repeal of paragraph
39H(b)
of the
Industry Research and Development Act 1986
;
(c)
section
46
of the
Industry Research and Development Act 1986
(as amended by this Act).
Part 2
-
General savings provisions
2 Object
2
The object of this Part is to ensure that, despite the repeals and amendments made by this Act, the full legal and administrative consequences of:
(a)
any act done or omitted to be done; or
(b)
any state of affairs existing; or
(c)
any period ending;
before such a repeal or amendment applies, can continue to arise and be carried out, directly or indirectly through an indefinite number of steps, even if some or all of those steps are taken after the repeal or amendment applies.
3 Making and amending assessments, and doing other things etc., in relation to past matters
(1)
Even though a provision is repealed or amended by this Act, the repeal or amendment is disregarded for the purpose of doing any of the following under any Act or legislative instrument (within the meaning of the
Legislative Instruments Act 2003
):
(a)
making or amending an assessment (including under a provision that is itself repealed or amended);
(b)
exercising any right or power, performing any obligation or duty or doing any other thing (including under a provision that is itself repealed or amended);
in relation to any act done or omitted to be done, any state of affairs existing, or any period ending, before the repeal or amendment applies.
Note:
Examples of things covered by this subitem are as follows:
(a) an eligible company may object under Part
IVC
of the
Taxation Administration Act 1953
in an income year commencing on or after 1 July 2011 about a notice given under former section
73I
of the
Income Tax Assessment Act 1936
for an income year commencing before 1 July 2011;
(b) an eligible company seeking registration under former section
39J
of the
Industry Research and Development Act 1986
for an income year commencing before 1 July 2011 may do so during an income year commencing on or after 1 July 2011;
(c) Innovation Australia may give a certificate under former section
39M
of the
Industry Research and Development Act 1986
in an income year commencing on or after 1 July 2011 about research and development activities registered for an income year commencing before 1 July 2011.
(2)
Even though a provision is repealed or amended by this Act, the repeal or amendment is disregarded so far as it relates to a state of affairs:
(a)
that exists after the repeal or amendment applies; and
(b)
that relates to:
(i)
an act done or omitted to be done; or
(ii)
a state of affairs existing; or
(iii)
a period ending;
before the repeal or amendment applies.
Note:
Examples of things covered by this subitem are as follows:
(a) an amount may be included in an eligible company
'
s assessable income under former subsection
73BF(4)
of the
Income Tax Assessment Act 1936
for an income year commencing on or after 1 July 2011 if the company receives in that income year an amount for the results of research and development activities for which the company had deductions under former section
73BA
of that Act in an income year commencing before 1 July 2011;
(b) an eligible company
'
s deduction under section
73B
of the
Income Tax Assessment Act 1936
for expenditure incurred during an income year commencing before 1 July 2011 is reduced because of section
73C
of that Act if, in an income year commencing on or after 1 July 2011, the company receives a recoupment of that expenditure from the Commonwealth.
(3)
To avoid doubt, this item extends to the repeal of subsection
286-75(3)
, and paragraph
286-80(2)(b)
, in Schedule
1
to the
Taxation Administration Act 1953
. In particular, if, in a particular case, the period in respect of which an administrative penalty is payable under subsection
286-75(3)
in that Schedule:
(a)
has not begun; or
(b)
has begun but not ended;
when those provisions are repealed, then, despite the repeal, those provisions continue to apply in the particular case until the end of the period.
4 Saving of provisions about effect of assessments
4
If a provision or part of a provision that is repealed or amended by this Act deals with the effect of an assessment, the repeal or amendment is disregarded in relation to assessments made, before or after the repeal or amendment applies, in relation to any act done or omitted to be done, any state of affairs existing, or any period ending, before the repeal or amendment applies.
5 Repeals disregarded for the purposes of dependent provisions
5
If the operation of a provision (the
subject provision
) of any Act or legislative instrument (within the meaning of the
Legislative Instruments Act 2003
) made under any Act depends to any extent on a provision that is repealed by this Act, the repeal is disregarded so far as it affects the operation of the subject provision.
6 Schedule does not limit operation of the
Acts Interpretation Act 1901
6
This Schedule does not limit the operation of the
Acts Interpretation Act 1901
.
Subdivision 355-E
-
Balancing adjustments for decline in value deductions for assets used in R
&
D activities
History
Subdiv 355-E inserted by No 93 of 2011, s 3 and Sch 4 item 15, effective 8 September 2011. For application, savings and transitional provisions see note under Div
355
heading.
SECTION 355-325
Balancing adjustment
-
R
&
D partnership assets only used for R
&
D activities
Partner has old law R
&
D decline in value deductions
355-325(1)
This section applies to an R
&
D entity (the
partner
) if:
(a)
a balancing adjustment event happens in an income year (the
event year
) commencing on or after 1 July 2011 for an asset held by an R
&
D partnership; and
(b)
the R
&
D partnership cannot deduct an amount under section
40-25
, as that section applies apart from:
(i)
Division
355
of the
Income Tax Assessment Act 1997
(the
new Act
); and
(ii)
former section
73BC
of the
Income Tax Assessment Act 1936
(the
old Act
);
for the asset for an income year; and
(c)
either or both of the following subparagraphs apply:
(i)
the partner can deduct (the
old law deductions
) under former section
73BA
or
73BH
of the old Act an amount for one or more income years for the asset;
(ii)
the partner chooses tax offsets under former section
73I
of the old Act instead of deductions (also the
old law deductions
) under those former sections for one or more income years for the asset; and
(d)
the partner is registered under section
27A
of the
Industry Research and Development Act 1986
for one or more R
&
D activities for the event year; and
(e)
if Division
40
of the new Act applied as described in subsection (2) of this section:
(i)
the R
&
D partnership could deduct for the event year an amount under subsection
40-285(2)
of that Act for the asset and the balancing adjustment event; or
(ii)
an amount would be included in the R
&
D partnership
'
s assessable income for the event year under subsection
40-285(1)
of that Act for the asset and the balancing adjustment event.
Note 1:
This section applies even if the partner is entitled under section
355-100
of the new Act to tax offsets for one or more income years for deductions under section
355-520
of that Act for the asset.
Note 2:
Section
40-293
of this Act may apply if paragraph (c), but not paragraph (b), of this subsection is satisfied.
History
S 355-325(1) amended by No 92 of 2020, s 3 and Sch 5 item 50, by omitting
"
(the
new law deductions
)
"
before
"
under section 355-520
"
from note 1, effective 1 January 2021 and applicable in relation to assessments for income years commencing on or after 1 July 2021.
Changed application of Division 40
355-325(2)
For the purposes of paragraph (1)(e), assume that Division
40
of the new Act applied with the changes described in section
355-310
of that Act, but with these changes to that section:
|
Changes to be made to section 355-310 of the new Act
|
|
Item
|
For a reference in section 355-310 to
…
|
substitute a reference to
…
|
| 1 |
section
355-315 |
this section |
| 2 |
the purpose of conducting one or more of the R
&
D activities to which the R
&
D deductions (within the meaning of that section) relate |
both:
(a) the purpose of conducting one or more of the research and development activities (within the meaning of former section 73B of the old Act) to which the old law deductions relate; and
(b) the purpose of conducting one or more of the R
&
D activities to which the new law deductions (if any) relate |
| 3 |
R
&
D entity |
R
&
D partnership |
Deduction
355-325(3)
If the R
&
D partnership could deduct for the event year an amount under subsection
40-285(2)
of the new Act for:
(a)
the asset; and
(b)
the event;
if Division
40
of that Act applied as described in subsection (2) of this section, the partner is taken to be able to deduct under subsection
355-525(2)
of the new Act the partner
'
s proportion of that amount for the event year.
History
S 355-325(3) amended by No 92 of 2020, s 3 and Sch 5 item 52, by repealing the note, effective 1 January 2021 and applicable in relation to assessments for income years commencing on or after 1 July 2021. The note formerly read:
Note:
The partner may be entitled to a tax offset under section 355-100 (about R
&
D) of the new Act for the deduction.
Amount to be included in assessable income
355-325(4)
If an amount (the
section 40-285 amount
) would be included in the R
&
D partnership
'
s assessable income for the event year under subsection
40-285(1)
of the new Act for the asset and the event if Division
40
of that Act applied as described in subsection (2) of this section, the sum of:
(a)
the partner
'
s proportion of that amount; and
(b)
the following amount;
is taken to be included in the partner
'
s assessable income for the event year under subsection
355-525(3)
of the new Act:
where:
adjusted section 40-285 amount
means so much of the section
40-285
amount as does not exceed the total decline in value.
old law 1.25 rate deductions
means the sum of the partner
'
s notional Division
40
deductions, and notional Division
42
deductions, (if any) for the assets that were multiplied by 1.25 in working out the old law deductions.
total decline in value
means the asset
'
s cost, less its adjustable value, worked out under Division
40
of the new Act as it applies as described in subsection (2).
History
S 355-325(4) amended by No 92 of 2020, s 3 and Sch 5 item 53, by substituting the formula, effective 1 January 2021 and applicable in relation to assessments for income years commencing on or after 1 July 2021. The formula formerly read:
Application of Division 355
355-325(4A)
In applying Division
355
of the new Act in relation to the asset for the income year, if one or more partners (including the partner) in the R
&
D partnership is entitled under section
355-100
of the new Act to tax offsets for one or more income years for deductions under section
355-520
of that Act for the asset, the partner is taken to have:
(a)
if an amount is taken to be included in the R
&
D entity
'
s assessable income for the event year as mentioned in subsection (4) of this section
-
a clawback amount under section
355-448
of the new Act for the income year equal to the amount mentioned in subsection (4B) of this section; or
(b)
if the partner is taken to be able to deduct an amount as mentioned in subsection (3) of this section
-
a catch up amount under section
355-467
of the new Act for the income year equal to the amount of that deduction.
History
S 355-325(4A) substituted by No 92 of 2020, s 3 and Sch 5 item 54, effective 1 January 2021 and applicable in relation to assessments for income years commencing on or after 1 July 2021. S 355-325(4A) formerly read:
Amount to be included in assessable income may be reduced if notional deductions exceeded $100 million
355-325(4A)
For the purposes of subsection (4), the partner may choose to reduce the adjusted section 40-285 amount in that subsection if:
(a)
subsection 355-100(3) of the
Income Tax Assessment Act 1997
applied to the partner for an earlier income year or the event year (the
excess year
); and
(b)
the partner
'
s deductions for the excess year included deductions covered by paragraph (1)(c) of this section for the asset.
S 355-325(4A) inserted by No 13 of 2015, s 3 and Sch 1 item 7, applicable in relation to an R
&
D entity
'
s assessments for income years commencing on or after 1 July 2014.
355-325(4B)
The amount is an amount equal to the partner
'
s proportion of the following:
| Adjusted section
40-285
amount |
× |
Sum of new law deductions
|
| Total decline in value |
where:
adjusted section 40-285 amount
means 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 deductions under section
355-520
of the new Act mentioned in subsection (4A) of this section.
total decline in value
means the asset
'
s cost, less its adjustable value, worked out under Division
40
of the new Act as it applies as described in subsection (2) of this section.
History
S 355-325(4B) substituted by No 92 of 2020, s 3 and Sch 5 item 54, effective 1 January 2021 and applicable in relation to assessments for income years commencing on or after 1 July 2021. S 355-325(4B) formerly read:
Amount to be included in assessable income may be reduced if notional deductions exceeded $100 million
355-325(4B)
Subsection 355-720(3) of the
Income Tax Assessment Act 1997
applies to the partner as if a reduction under subsection (2) of that section for the present year included a reduction under subsection (4A) of this section for the event year.
S 355-325(4B) inserted by No 13 of 2015, s 3 and Sch 1 item 7, applicable in relation to an R
&
D entity
'
s assessments for income years commencing on or after 1 July 2014.
355-325(4C)
(Repealed by No 92 of 2020)
History
S 355-325(4C) repealed by No 92 of 2020, s 3 and Sch 5 item 54, effective 1 January 2021 and applicable in relation to assessments for income years commencing on or after 1 July 2021. S 355-325(4C) formerly read:
355-325(4C)
The way the partner prepares its income tax returns is sufficient evidence of the making of a choice under subsection (4A).
S 355-325(4C) inserted by No 13 of 2015, s 3 and Sch 1 item 7, applicable in relation to an R
&
D entity
'
s assessments for income years commencing on or after 1 July 2014.
355-325(4D)
(Repealed by No 92 of 2020)
History
S 355-325(4D) repealed by No 92 of 2020, s 3 and Sch 5 item 54, effective 1 January 2021 and applicable in relation to assessments for income years commencing on or after 1 July 2021. S 355-325(4D) formerly read:
355-325(4D)
A choice under subsection (4A) is irrevocable.
S 355-325(4D) inserted by No 13 of 2015, s 3 and Sch 1 item 7, applicable in relation to an R
&
D entity
'
s assessments for income years commencing on or after 1 July 2014.
Normal rules do not apply for the asset and the event
355-325(5)
Neither of the following sections:
(a)
section
355-525
of the new Act;
(b)
former section
73BF
of the old Act (as that section applies because of Part 2 of Schedule 4 to the
Tax Laws Amendment (Research and Development) Act 2011
);
to the extent that they would otherwise apply apart from this section to the partner for the event, do so apply to the partner for the event.
Note 1:
Section
355-525
of the new Act would otherwise apply for the event in a case where the partner had new law deductions.
Note 2:
Former section
73BF
of the old Act may otherwise apply for the event in respect of the old law deductions.
History
S 355-325 inserted by No 93 of 2011, s 3 and Sch 4 item 15, effective 8 September 2011. For application, savings and transitional provisions see note under Div
355
heading.
View history note
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