Document ID: chunk:federal_register_of_legislation:C2011C00519:clause:11_73qb:p1
Version: federal_register_of_legislation:C2011C00519
Segment Type: clause
Provision Reference: sch 11 cl 73QB (pt 1/2)
Character Range: 296888–299514

73QB  Extra deduction for increase in expenditure on foreign owned research and development

Prerequisites for deduction

 (1) An eligible company may deduct an amount for the Y0 year of income if:
 (a) the company can deduct an amount for that year under subsection 73B(14C) for expenditure incurred in the company's group membership period; and
 (b) for each of the Y‑1, Y‑2 and Y‑3 years of income, any of the following conditions is met:
 (i) the eligible company could deduct for the year of income an amount under subsection 73B(14C) for expenditure in its group membership period;
 (ii) one of the eligible company's other group members could deduct for the year of income an amount under subsection 73B(14C) for expenditure in its group membership period;
 (iii) the year of income is one (a nil expenditure year) for which both the conditions in subsection (2) are met;
  (whether or not the same condition in this paragraph is met for 2 or more of those years, and whether or not such a condition is met by the same company for 2 or more of those years); and
 (c) the amount (the eligible company's share of the foreign owned part of the adjusted increase in expenditure on R&D by the group) worked out under subsection (4) is more than zero.

 (2) For the purposes of subparagraph (1)(b)(iii), the conditions for a nil expenditure year are as follows:
 (a) neither the eligible company nor any other group member (determined under section 73R) of the eligible company existed at any time in the nil expenditure year or the 10 immediately preceding years of income;
 (b) at no time in the nil expenditure year or the 10 immediately preceding years of income did any of the following carry on business in Australia:
 (i) a foreign company that was grouped under section 73L with the eligible company at any time in the Y0, Y‑1, Y‑2 or Y‑3 year of income;
 (ii) a foreign company that was grouped under section 73L with another group member (under section 73R) of the eligible company at any time during the other group member's group membership period (under section 73R);
 (iii) a person who was grouped under section 73L with a foreign company described in subparagraph (i) or (ii) at any time in the nil expenditure year or the 10 immediately preceding years of income.

Note: Section 73R provides for:

(a) primary group members to be determined on the basis of the relationship between companies at the end of the Y0 year of income; and

(b) secondary group members to be determined on the basis of the relationship between a company and a primary group member during the primary group member's group membership