Commonwealth Consolidated Acts

TREASURY LAWS AMENDMENT (A TAX PLAN FOR THE COVID-19 ECONOMIC RECOVERY) ACT 2020 - SCHEDULE 4

Income Tax Assessment Act 1997

1   Subsection   6 7 - 30(1)

Omit "if all or part of the amount of the tax offset is worked out using the percentage in item   1 of the table in subsection   355 - 100(1)", substitute "if the amount of the tax offset is worked out in accordance with item   1 of the table in subsection   355 - 100(1) (disregarding subsection   355 - 100(3))".

2   Subsection   6 7 - 30(1) (notes)

Repeal the notes, substitute:

Note:   Otherwise, the tax offset will be a non - refundable tax offset (see item   3 5 of the table in subsection   63 - 10(1)).

3   Subsection   355 - 100(1) (heading)

Repeal the heading, substitute:

If notional deductions are between $20,000 and $150 million

4   Subsection   355 - 100(1) (cell at table item   1 , column headed "The percentage is:")

Repeal the cell, substitute:

5   Subsection   355 - 100(1) (table items   2 and 3, column headed "The percentage is:")

Omit "38.5%", substitute "the R&D entity's * corporate tax rate for the income year".

6   Subsection   355 - 100(1) (note)

Repeal the note, substitute:

Note 1:   The tax offset will be a refundable tax offset if item   1 of the table applies (see section   67 - 30).

Note 2:   The tax offset is increased under subsection   (1A) of this section if item   2 or 3 of the table applies.

7   After subsection   355 - 100(1)

Insert:

R&D premium

  (1A)   If item   2 or 3 of the table in subsection   (1) applies to the * R&D entity, the amount of the * tax offset for the income year is increased by the sum of the amounts (if any) worked out for each item of the following table for that entity:

8   Subsection   355 - 100(2)

Omit "However, if the total of those amounts is less than $20,000, the * R&D entity is instead entitled to a * tax offset for the income year equal to that percentage of", substitute "However, if the total amount mentioned in subsection   (1) is less than $20,000, the * R&D entity is instead entitled to a * tax offset for the income year, worked out in accordance with subsections   (1) and (1A), as if that amount were instead".

9   Subsection   355 - 100(3)

Repeal the subsection   (including the note), substitute:

If notional deductions exceed $150 million

  (3)   Despite subsections   (1) and (1A), if the total amount mentioned in subsection   (1) exceeds $150 million, the * R&D entity is instead entitled to a * tax offset for the income year equal to the sum of:

  (a)   the amount worked out in accordance with those subsections as if that amount were $150 million; and

  (b)   the product of the excess and the R&D entity's * corporate tax rate for the income year.

10   At the end of Subdivision   355 - C

Add:

355 - 115   Working out an R&D entity's total expenses

  (1)   For the purposes of subsection   355 - 100(1A), an * R&D entity's total expenses for an income year is the sum of the amounts covered by subsection   (2).

  (2)   The following amounts are covered by this subsection:

  (a)   the * R&D entity's total expenses for the income year worked out in accordance with:

  (i)   the * accounting principles; or

  (ii)   if accounting principles do not apply in relation to the R&D entity--commercially accepted principles relating to accounting;

  (b)   any amount the R&D entity can deduct for the income year as mentioned in subsection   355 - 100(1), to the extent the amount is not covered by paragraph   ( a) for the income year.

Amounts counted once only

  (3)   For the purposes of subsection   (2):

  (a)   disregard an amount to which paragraph   ( 2)(a) otherwise applies if paragraph   ( 2)(b) has previously applied in relation to the amount; and

  (b)   disregard an amount to which paragraph   ( 2)(b) otherwise applies if paragraph   ( 2)(a) has previously applied in relation to the amount.

11   Section   355 - 750

Repeal the section.

Tax Laws Amendment (Research and Development) Act 2015

12   Subsection   2 (1) (table item   3 )

Repeal the item.

13   Part   2 of Schedule   1

Repeal the Part.

14   Application of amendments

The amendments made by this Schedule apply in relation to assessments for income years commencing on or after 1   July 2021.