Is the full-scale test model of an item of equipment, which is the subject matter of the taxpayer’s research and development (R&D) activities, a ‘section 73BA depreciating asset’ within the meaning of that term in section 73BB of the Income Tax Assessment Act 1936 (ITAA 1936) for which the taxpayer has a ‘notional Division 40 deduction’ within the meaning of section 73BC of the ITAA 1936? Yes. The full-scale test model is a ‘section 73BA depreciating asset’ because the test […]
Can an eligible company claim a deduction for certain ‘unpaid wages’ under subsection 73B(14) of the Income Tax Assessment Act 1936 (ITAA 1936)? No. The company cannot claim a deduction under subsection 73B(14) of the ITAA 1936 in respect of the ‘unpaid wages’ that have not been incurred by the company. The company is an ‘eligible company’ which undertakes on its own behalf ‘research and development activities’, as defined by subsection 73B(1) of the ITAA 1936. The company’s ‘research and development activities’ […]
Can the head company of a consolidated group claim deductions under section 73B of the Income Tax Assessment Act 1936 (ITAA 1936) for research and development expenditure incurred by a subsidiary member where the only member of the consolidated group registered in relation to the relevant research and development activities is another subsidiary member? Yes. The head company can claim a deduction under section 73B of the ITAA 1936 in respect of the research and development expenditure of the subsidiary member. In […]
Does subsection 73B(9) of the Income Tax Assessment Act 1936 (ITAA 1936), when affected by the single entity rule (section 701-1 of the Income Tax Assessment Act 1997 (ITAA 1997), prevent the head company of a consolidated group from claiming a deduction under section 73B of the ITAA 1936, for expenditure on research and development activities carried out on behalf of a subsidiary member of the consolidated group? No Research and development activities carried out ‘on behalf of’ a subsidiary member of […]