Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS

Division 355 - Research and Development

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History

Div 355 inserted by No 93 of 2011, s 3 and Sch 1 item 1, 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-C - Entitlement to tax offset

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SECTION 355-105 Deductions under this Division are notional only

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355-105(1)
An amount (the notional amount ) that an *R & D entity can deduct under this Division is disregarded except for the purposes of:

(a) working out whether the R & D entity is entitled under section 355-100 to a *tax offset; and

(b) a provision (of this Act or any other Act) that refers to an entitlement of the R & D entity under section 355-100 to a tax offset; and

(c) a provision (of this Act or any other Act) that:

(i) prevents some or all of the notional amount from being deducted; or

(ii) changes the income year for which some or all of the notional amount can be deducted; and

Note:

Examples are Divisions 26 and 27 of this Act, Subdivision H of Division 3 of Part III of the Income Tax Assessment Act 1936 and Part IVA of that Act.

(d) a provision (of this Act or any other Act) that includes an amount in assessable income wholly or partly because of the notional amount; and

Note:

An example is Subdivision 20-A , which may include in assessable income a recoupment of a loss or outgoing if the entity can deduct an amount for the loss or outgoing.

(e) a provision (of this Act or any other Act) that excludes expenditure from:

(i) the *cost base or *reduced cost base of a *CGT asset; or

(ii) an element of that cost base or reduced cost base.

Note:

An example is section 110-45 , which may exclude deductible expenditure from elements of the cost base of an asset.

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355-105(2)

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Subsection (1) does not apply to amounts that the *R & D entity can deduct under the following:

(a) subsection 355-315(2) ;

(b) subsection 355-475(1) ;

(c) subsection 355-525(2) .

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