Document ID: chunk:federal_register_of_legislation:C2011C00519:clause:11_8:p1
Version: federal_register_of_legislation:C2011C00519
Segment Type: clause
Provision Reference: sch 11 cl 8 (pt 1/3)
Character Range: 279885–282592

8  After subsection 73B(14B)
Insert:

Deduction for expenditure on foreign owned R&D

 (14C) An eligible company may deduct for a year of income the amount (the expenditure on foreign owned R&D by the eligible company for the year of income) worked out under subsection (14D) if:
 (a) the eligible company incurs expenditure in the year of income at a time when the eligible company is grouped under section 73L with a foreign company; and
 (b) the expenditure is for the purpose of the carrying on of Australian‑centred research and development activities; and
 (c) the activities are, are to be or were carried on wholly or primarily on behalf of the foreign company; and
 (d) the activities are, are to be or were carried on directly or indirectly under a written agreement between the eligible company and the foreign company and no other parties for the activities to be performed:
 (i) by the eligible company; or
 (ii) by another person directly or indirectly under another agreement to which the eligible company is, or will become, a party; and
 (e) the expenditure is not incurred in connection with an agreement that:
 (i) is between the eligible company and another eligible company that is grouped under section 73L with the eligible company when the expenditure is incurred; and
 (ii) is an agreement for the activities to be performed either by the eligible company or by a person who is not a party to the agreement and is to perform the activities directly or indirectly under another agreement to which the eligible company is, or will become, a party; and
 (f) the expenditure on foreign owned R&D by the eligible company for the year of income is greater than $20,000; and
 (g) the eligible company, and each other eligible company (if any) that is grouped under section 73L with that company at any time in the year of income, is registered under section 39J of the Industry Research and Development Act 1986 in relation to the year of income and all activities that meet both the following conditions:
 (i) the activities are ones that, if subsection (2BA) had not been enacted, would be Australian‑centred research and development activities carried on wholly or primarily on behalf of a foreign company (whether or not the activities would be such Australian‑centred research and development activities taking account of that subsection);
 (ii) the activities are ones in relation to which the eligible company or the other eligible company (as appropriate) incurred expenditure during the year of income.

Note 1: An example of the carrying on or performance of activities indirectly under an agreement that is a contract is the carrying on or performance of the activities under a