Document ID: chunk:federal_register_of_legislation:C2014C00703:clause:1_2:p3
Version: federal_register_of_legislation:C2014C00703
Segment Type: clause
Provision Reference: sch 1 cl 2 (pt 3/11)
Character Range: 36652–39415

that Division under that section.
Note 2: In the application of Division 13 of Part III of the Income Tax Assessment Act 1936 (about international transfer‑pricing arrangements), this section is disregarded (see subsection 136AB(2) of that Act).

355‑405  Expenditure not at risk
 (1) An *R&D entity cannot deduct expenditure under section 355‑205 or 355‑480 if:
 (a) when it incurs the expenditure, the R&D entity or its *associate had received, or could reasonably be expected to receive, consideration:
 (i) as a direct or indirect result of the expenditure being incurred; and
 (ii) regardless of the results of the activities on which the expenditure is incurred; and
 (b) that consideration is equal to or greater than the expenditure.
Note: Section 355‑205 is about deductions for R&D expenditure. Section 355‑480 is about deductions for earlier year associate R&D expenditure.
 (2) If:
 (a) when an *R&D entity incurs expenditure, the R&D entity or its *associate had received, or could reasonably be expected to receive, consideration:
 (i) as a direct or indirect result of the expenditure being incurred; and
 (ii) regardless of the results of the activities on which the expenditure is incurred; and
 (b) that consideration is less than the expenditure;
the R&D entity cannot deduct under section 355‑205 or 355‑480 so much of the expenditure as is equal to the consideration.
 (3) For the purposes of paragraphs (1)(a) and (2)(a), have regard to:
 (a) anything that happened or existed before or at the time the expenditure is incurred; and
 (b) anything that is likely to happen or exist after that time.
 (4) This section does not apply to expenditure incurred on *R&D activities covered by paragraph 355‑210(1)(b) or (c).
Note: Those paragraphs cover R&D activities conducted for foreign residents.

355‑410  Disposal of R&D results
 (1) This section applies to an *R&D entity if:
 (a) the R&D entity is entitled under section 355‑100 to a *tax offset because it can:
 (i) deduct under section 355‑205 or 355‑480 expenditure incurred on *R&D activities; or
 (ii) deduct under section 355‑305 or 355‑520 an amount for an asset (the R&D asset) used for the purpose of conducting one or more R&D activities; and
 (b) the R&D entity receives or becomes entitled to receive one or more of the following amounts (the results amounts) in an income year (the results year):
 (i) an amount for the results of any of the R&D activities;
 (ii) an amount from granting access to, or the right to use, any of those results;
 (iii) an amount attributable to the R&D entity having incurred the expenditure, including an amount it is entitled to receive regardless of the results of the R&D activities;
 (iv) an amount attributable to the R&D asset being used for