Document ID: chunk:federal_register_of_legislation:C2014C00703:clause:1_2:p5
Version: federal_register_of_legislation:C2014C00703
Segment Type: clause
Provision Reference: sch 1 cl 2 (pt 5/11)
Character Range: 41675–44465

by group mark‑ups
 (2) The amount the *R&D entity can deduct, apart from this section, under section 355‑205 or 355‑480 for the income year is reduced by the amount (the reduction amount) worked out as follows:

      Method statement
           Step 1. For each grouped entity, work out the sum of the amounts derived during the income year, or an earlier income year, by the grouped entity for goods or services relating to one or more of the *R&D activities while:

                (a) the grouped entity was *connected with the *R&D entity; or
                (b) the grouped entity was an *affiliate of the R&D entity or the R&D entity was an affiliate of the grouped entity.

           Step 2. From the sum of those amounts, subtract the actual cost to each grouped entity of providing the goods or services that correspond to those amounts.

If R&D entity has deductions for both R&D expenditure and earlier year associate R&D expenditure
 (3) However, if the *R&D entity can deduct amounts under both sections 355‑205 and 355‑480 for the income year, those amounts are reduced as follows:
 (a) apply the reduction amount to reduce the amount otherwise deductible under section 355‑205 (but not below zero); and
 (b) then apply any remainder of the reduction amount to reduce the amount otherwise deductible under section 355‑480 (but not below zero).

Disregard mark‑ups already taken into account
 (4) For the purposes of step 1 of the method statement in subsection (2), disregard any of the amounts from that step that have already been taken into account under this section for the *R&D entity and the *R&D activities for an earlier income year.

Subdivision 355‑G—Clawback of R&D recoupments

Table of sections
355‑430 What this Subdivision is about
355‑435 When extra income tax is payable
355‑440 Entity receives government recoupment
355‑445 Recoupment could relate to R&D activities
355‑450 Amount on which extra income tax is payable

355‑430  What this Subdivision is about
      An entity must pay extra income tax on its recoupments from government of expenditure on R&D activities for which it has obtained tax offsets under this Division.

355‑435  When extra income tax is payable
  An entity must pay extra income tax on a *recoupment if the conditions in sections 355‑440 and 355‑445 are met for the recoupment.
Note 1: Section 355‑450 sets out how much of the recoupment is subject to extra income tax.
Note 2: A recoupment includes a grant (see subsection 20‑25(1)).

355‑440  Entity receives government recoupment
  The condition in this section is met if the entity receives or becomes entitled to receive the *recoupment from:
 (a) an *Australian government agency; or
 (b) an STB (within the meaning of Division 1AB of Part III of the Income Tax Assessment