Commonwealth Consolidated Acts Commonwealth Consolidated ActsIncome Tax Assessment Act 1997
1 Subsection 67 - 30(1)
Before "the amount", insert "all or part of".
2 Section 67 - 30 (note 2)
Repeal the note, substitute:
Note 2: This subsection can apply to an entitlement under any subsection of section 355 - 100.
3 Subsection 355 - 100(1) (heading)
Repeal the heading, substitute:
If notional deductions are between $20,000 and $100 million
4 At the end of section 355 - 100
Add:
If notional deductions exceed $100 million
(3) Despite subsection ( 1), if the total of those amounts exceeds $100 million, the * R&D entity is instead entitled to a * tax offset for the income year equal to the sum of:
(a) that percentage of $100 million; and
(b) the product of the excess and the * corporate tax rate.
Note: The R&D entity may be able to reduce related amounts that would otherwise be:
(a) included in its assessable income because of a balancing, or feedstock, adjustment; or
(b) payable as extra income tax because of an R&D recoupment;
(see section 355 - 720).
5 At the end of section 355 - 525
Add:
Amount to be included in assessable income may be reduced if notional deductions exceeded $100 million
(4) For the purposes of subsection ( 3), the partner may choose to reduce the adjusted section 40 - 285 amount in that subsection if:
(a) subsection 355 - 100(3) 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.
(5) Subsection 355 - 720(3) applies to the partner as if a reduction under subsection ( 2) of that section for the present year included a reduction under subsection ( 4) of this section for the event year.
(6) The way the partner prepares its income tax returns is sufficient evidence of the making of a choice under subsection ( 4).
(7) A choice under subsection ( 4) is irrevocable.
6 At the end of Subdivision 355 - W
Add:
355 - 720 Certain related amounts may be reduced if notional deductions exceeded $100 million
(1) The object of this section is to prevent the portion of a * tax offset worked out using the * corporate tax rate being clawed back in later income years.
Note: This applies when the R&D entity's notional deductions exceed $100 million (see subsection 355 - 100(3)).
(2) For the purposes of working out a matter referred to in column 1 of an item of this table for an income year (the present year ), the * R&D entity may choose to reduce the amount referred to in column 3 of that item if:
(a) subsection 355 - 100(3) applied to the R&D entity for an earlier income year or the present year (the excess year ); and
(b) the R&D entity's deductions for the excess year included deductions covered by a provision referred to in column 2 of that item.
Reducing extra income tax or amounts included in assessable income | |||
Item | Column 1 For the purposes of working out this matter: | Column 2 If its excess year deductions included those covered by: | Column 3 This can be reduced: |
1 | any amount to include in the * R&D entity's assessable income for the present year because of a * balancing adjustment event happening for an asset it * held | (a) paragraph 40 - 292(1)(b); or (b) paragraph 355 - 315(1)(c); for the asset | its adjusted section 40 - 285 amount (see subsection 40 - 292(5) or 355 - 315(3)) for the present year, the asset and the * balancing adjustment event |
2 | any amount of extra income tax payable by the * R&D entity under section 355 - 435 for the present year | subsection 355 - 450(1) | those excess year deductions |
3 | any amount to include in the * R&D entity's assessable income for the present year under section 355 - 465 | paragraph 355 - 465(1)(b) | those excess year deductions |
Note 1: Item 2 is about R&D recoupments and item 3 is about feedstock adjustments.
Note 2: Reducing the amount in column 3 will reduce the amount in column 1.
(3) The * R&D entity's circumstances may allow it to choose multiple reductions under subsection ( 2) for the present year. The total of any reductions cannot be more than the amount of its excess under subsection 355 - 100(3) for the excess year.
(4) The way an * R&D entity prepares its income tax returns is sufficient evidence of the making of a choice under this section.
(5) A choice under this section is irrevocable.
355 - 750 Review of rate when notional deductions exceed $100 million
(1) The Minister must cause a review of the operation of subsection 355 - 100(3) (about the rate of tax offset when notional deductions exceed $100 million) to be undertaken as soon as possible after the fifth anniversary of the commencement of that subsection.
(2) The Minister must cause a copy of the report of the review to be tabled in each House of the Parliament within 15 sitting days of receiving it.
Income Tax (Transitional Provisions) Act 1997
7 After subsection 355 - 325(4)
Insert:
Amount to be included in assessable income may be reduced if notional deductions exceeded $100 million
(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.
(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.
(4C) The way the partner prepares its income tax returns is sufficient evidence of the making of a choice under subsection ( 4A).
(4D) A choice under subsection ( 4A) is irrevocable.
8 At the end of Division 355
Add:
Subdivision 355 - W -- Other matters
Table of sections
355 - 720 Certain related amounts may be reduced if notional deductions exceeded $100 million
355 - 720 Certain related amounts may be reduced if notional deductions exceeded $100 million
Section 355 - 720 of the Income Tax Assessment Act 1997 also applies as if the table in subsection ( 1) of that section included the following item:
1A | any amount to include in the * R&D entity's assessable income for the present year because of a * balancing adjustment event happening for an asset it * held | (a) paragraph 40 - 292(1)(b) of the Income Tax (Transitional Provisions) Act 1997 ; or (b) paragraph 355 - 320(1)(c) of that Act | its adjusted section 40 - 285 amount (see subsection 40 - 292(3) or 355 - 320(4) of that Act) for the present year, the asset and the * balancing adjustment event |
9 Application of amendments
The amendments made by this Part apply in relation to an R&D entity's assessments for income years commencing on or after 1 July 2014.