Document ID: chunk:federal_register_of_legislation:C2025C00014:section:73a:p1
Version: federal_register_of_legislation:C2025C00014
Segment Type: section
Provision Reference: s 73A (pt 1/3)
Character Range: 404149–406819

73A  Expenditure on scientific research
 (1A) This section has effect subject to Division 245 of the Income Tax Assessment Act 1997.
 (1) The following payments made, and expenditure incurred, during the year of income (other than any amount which is allowable as a deduction under any other section of this Act) by a person carrying on a business for the purpose of gaining or producing assessable income shall be allowable deductions:
 (a) Payments to:
 (i) an approved research institute for scientific research related to that business; or
 (ii) an approved research institute, the object of which is the undertaking of scientific research related to the class of business to which that business belongs; and
 (b) Expenditure of a capital nature on scientific research related to that business (except to the extent that it is expenditure on plant, machinery, land or buildings or on alterations, additions or extensions to buildings or in the acquisition of rights in or arising out of scientific research).
 (2) Where, on or after the first day of the year of income ending on 30 June 1946, a taxpayer carrying on a business for the purpose of gaining or producing assessable income incurs expenditure of a capital nature in the construction or acquisition of a building, or part of a building, or in making any alteration or addition to a building, in which scientific research related to that business is to be carried on by or on behalf of the taxpayer, and the building, part of a building, alteration or addition, as the case may be, is of use for scientific research purposes only, an amount equal to one‑third of that expenditure shall be an allowable deduction:
 (a) from the assessable income of the year of income in which the building, part of a building, alteration or addition is first used by or on behalf of the taxpayer for such scientific research; and
 (b) from the assessable income of each of the 2 years of income next succeeding that year of income, if the taxpayer continues to carry on that business during the year in which that assessable income was derived.
 (2A) Subsection (2) does not apply to expenditure incurred by a taxpayer in the construction of a building or part of a building, in the making of an alteration or addition to a building or in the acquisition of a building or part of a building unless:
 (a) either of the following subparagraphs applies:
 (i) that construction or making commenced, or that acquisition occurred, before 21 November 1987;
 (ii) any contract in respect of that construction, making or acquisition was entered into before 21 November 1987; and
 (b) if the expenditure was incurred after 20 November