Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p6
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 6/18)
Character Range: 5195337–5198154

activities
355‑448 Balancing adjustments for R&D partnership assets only used for R&D activities
355‑449 Balancing adjustments for R&D partnership assets partially used for R&D activities
355‑450 Amount to be included in assessable income

Operative provisions

355‑435  When this Subdivision applies
  This Subdivision applies to an *R&D entity for an income year (the present year) if:
 (a) the R&D entity has an amount (a clawback amount) under section 355‑440, 355‑445, 355‑446, 355‑447, 355‑448 or 355‑449 for the present year; and
 (b) the R&D entity has received, or is entitled to receive, a *tax offset under section 355‑100 for one or more income years (each an offset year) in relation to that clawback amount.

355‑440  R&D recoupments
 (1) The *R&D entity has an amount under this section if:
 (a) the entity, or another entity mentioned in subsection (5), receives or becomes entitled to receive a *recoupment from either of the following (otherwise than under the *CRC program):
 (i) an *Australian government agency;
 (ii) an STB (within the meaning of Division 1AB of Part III of the Income Tax Assessment Act 1936); and
 (b) the recoupment is received, or the entitlement to receive the recoupment arises, during the present year; and
 (c) either:
 (i) the recoupment is of expenditure incurred on or in relation to certain activities; or
 (ii) the recoupment requires expenditure (the project expenditure) to have been incurred, or to be incurred, on certain activities.
Note: Paragraph (c) includes expenditure incurred in purchasing a tangible depreciating asset to be used when conducting R&D activities.
 (2) The amount is equal to the sum of:
 (a) so much of the expenditure referred to in subsection (1) that is deducted under this Division; and
 (b) for each asset (if any) for which expenditure referred to in subsection (1) is included in the asset's *cost—each amount (if any) equal to the asset's decline in value that is deducted under this Division;
that is taken into account in working out *tax offsets under section 355‑100 obtained by the *R&D entity for one or more income years.
Note: Paragraphs (a) and (b) of this subsection refer to amounts notionally deducted under this Division (see section 355‑105).

Amount is reduced by any repayments of the recoupment
 (3) For the purposes of subsection (2), reduce the expenditure referred to in subparagraph (1)(c)(i) by any repayments of the *recoupment during an income year.

Cap on extra income tax if recoupment relates to a project
 (4) Despite subsection (2), if the *recoupment is covered by subparagraph (1)(c)(ii), the amount mentioned in subsection (2) for the present year cannot exceed the amount worked out using the following formula:
where:
net amount of the recoupment means the total amount of the *recoupment, less