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Tax Laws Amendment (Research and Development) Bill 2010

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6147

2008-2009-2010

 

The Parliament of the

Commonwealth of Australia

 

THE SENATE

 

 

 

 

 

Tax Laws Amendment (Research and Development) Bill 2010

 

 

(1)     Clause 2, page 2 (table items 1 to 3), omit “The day this Act receives the Royal Assent” (wherever occurring), substitute “1 July 2011”.

[commencement]

(2)     Clause 2, page 2 (table item 4), omit “the start of the day this Act receives the Royal Assent” (wherever occurring), substitute “1 July 2011”.

[commencement]

(3)     Clause 2, page 2 (table items 5 to 7), omit “The day this Act receives the Royal Assent” (wherever occurring), substitute “1 July 2011”.

[commencement]

(4)     Schedule 1, item 1, page 6 (lines 10 to 12), omit paragraph 355-25(1)(b), substitute:

                     (b)  that are conducted for the purpose of:

                              (i)  generating new knowledge; or

                             (ii)  the creation of new or improved materials, products, devices, processes or services.

[R&D definitions]

(5)     Schedule 1, item 1, page 7 (lines 13 to 18), subclause 355-30(2) TO BE OPPOSED .

[R&D definitions]

(6)     Schedule 1, item 1, page 8 (line 23), omit “.”, substitute “;”.

[feedstock expenditure]

(7)     Schedule 1, item 1, page 8 (after line 23), after paragraph 355-100(1)(g), insert:

                     (h)  section 355-465 (feedstock expenditure).

[feedstock expenditure]

(8)     Schedule 1, item 1, page 27 (line 12) to page 28 (line 32), omit sections 355-460 and 355-470, substitute:

355-465  Feedstock expenditure

             (1)  For the purposes of this section:

                     (a)  an eligible company has eligible feedstock expenditure in respect of a year of income in relation to related research and development activities if the company’s feedstock input in respect of the year of income in relation to those activities exceeded the company’s feedstock output in respect of the year of income in relation to those activities; and

                     (b)  the amount of the excess constitutes the company’s eligible feedstock expenditure in respect of the year of income in relation to those activities.

             (2)  Feedstock expenditure , in relation to an eligible company, means expenditure incurred by the company in acquiring or producing materials or goods to be the subject of processing or transformation by the company in research and development activities, and includes expenditure incurred by the company on any energy input directly into the processing or transformation.

             (3)  Feedstock input , in relation to an eligible company in relation to a year of income, means the company’s feedstock expenditure in respect of materials or goods that were the subject of processing or transformation by the company in research and development activities during the year of income.

             (4)  Feedstock output , in relation to an eligible company in relation to a year of income, means the sum of the amounts worked out under paragraphs (a) and (b) in relation to any products that were obtained by the company during the year of income from the processing or transformation of materials or goods the acquisition or production of which was feedstock expenditure of the company:

                     (a)  if any of those products were sold by the company during the year of income by a transaction or transactions entered into at arm’s length with the buyer or buyers—the amount or amounts received or receivable by the company from the sale or sales;

                     (b)  if any of those products were not sold by the company during the year of income or were sold by the company otherwise than by a transaction or transactions entered into at arm’s length with the buyer or buyers—the amount or amounts (if any) that would have been received by the company by selling those products at the end of the year of income by a transaction or transactions entered into at arm's length with the buyer or buyers

             (5)  Where a company has eligible feedstock expenditure in respect of a year of income, the company can deduct this amount under 355-100(1).

[feedstock expenditure]

(9)     Schedule 2, item 1, page 47 (lines 4 to 10), omit subclause 27A(1) (but not the notes), substitute:

             (1)  The Board must, on application by an R&D entity, register the entity for an income year.

[registration and the role of Innovation Australia]

(10)   Schedule 2, item 1, page 47 (lines 20 to 32), subclause 27A(3) TO BE OPPOSED .

[registration and the role of Innovation Australia]

(11)   Schedule 2, item 1, page 48 (lines 1 to 31), omit clause 27B, substitute:

27B  Findings about applications for registration

             (1)  The Board may make one or more findings in relation to an R&D entity’s application for the purposes of subsection 27A(1) to the effect that all or part of the activities satisfy the definition of R&D activities in section 355-20 of the Income Tax Assessment Act 1997 .

Note:          A finding is reviewable (see Division 5).

             (2)  If the Board makes a finding under subsection (1) in relation to the R&D entity’s registration, the Board may specify in the finding the times to which the finding relates.

Example:    A finding under subsection (1) could specify the times during the registration year that a registered activity was an R&D activity.

             (3)  This section has effect subject to section 32B (findings cannot be inconsistent with any earlier findings).

[registration and the role of Innovation Australia]

(12)   Schedule 2, item 1, page 52 (lines 3 to 30), omit section 27J, substitute:

27J  Findings about a registration

             (1)  The Board may make one or more findings about an R&D entity’s registration under section 27A for an income year to the effect that all or part of the activities satisfy the definition of R&D activities in Section 355-20 of the Income Tax Assessment Act 1997 .

Note:          A finding is reviewable (see Division 5).

             (2)  If the Board makes a finding under subsection (1) in relation to the R&D entity’s registration, the Board may specify in the finding the times to which the finding relates.

Example:    A finding under subsection (1) could specify the times during the registration year that a registered activity was an R&D activity.

             (3)  This section has effect subject to section 32B (findings cannot be inconsistent with any earlier findings).

[registration and the role of Innovation Australia]

(13)   Schedule 2, item 1, page 56 (line 20) to page 57 (line 3), omit subclause 28A(1) (but not the notes), substitute:

             (1)  The Board must, on application by an R&D entity for a finding under this subsection about an activity, do the following:

                     (a)  find that all or part of the activities satisfy the definition of R&D activities in section 355-20 of the Income Tax Assessment Act 1997 for which the entity has been or could be registered under section 27A for an income year; or

                     (b)  find that all or part of the activities do not satisfy the definition of R&D activities in section 355-20 of the Income Tax Assessment Act 1997 for which the entity has been or could be registered under section 27A for an income year.

[registration and the role of Innovation Australia]