Substituted Accounting Period

March 13th, 2014

  • The R&D tax incentive applies to income years beginning on or after 1 July 2011.
  • If your 2012 tax return is for a substituted accounting period beginning before 1 July 2011, you are unable to claim the R&D tax incentive in your 2012 tax return; however, if you have conducted R&D activities and meet the eligibility requirements for the R&D tax concession, you can claim the R&D tax concession for that year.
  • The answers to these frequently asked questions help you in working out whether to claim the R&D tax incentive or R&D tax concession for your 2012 income year.
  • The answers also provide information about how you can claim the R&D tax concession on your 2012 tax return.

Under the Income Tax Assessment Act 1936 (ITAA 1936), an accounting period is generally a period of 12 months ending on 30 June. However, the Act allows for a substituted accounting period (SAP) to balance on some other date.

Can I claim the R&D tax incentive in my 2011 tax return if my 2011 income year begins before 1 July 2011 but ends after 1 July 2011?

No, the start date for the R&D tax incentive is determined by when your income year begins, not when it ends. If your 2011 income year begins before 1 July 2011, you cannot claim the R&D tax incentive until your first year of income beginning on or after 1 July 2011.

Example:
Company A has a late-balancing September SAP. Company A’s 2011 tax return will be lodged for the period 1 October 2010 to 30 September 2011. As its 2011 income year begins on 1 October 2010, which is before 1 July 2011, it will not be able to claim the R&D tax incentive until its 2012 income year, beginning on 1 October 2011.

Can I claim the R&D tax incentive in my 2012 tax return if my 2012 income year begins before 1 July 2011?

No, if your 2012 income year begins before 1 July 2011, you will not be able to claim the R&D tax incentive until your first income year beginning on or after 1 July 2011.

Example:
Company B has an early-balancing December SAP. Company B’s 2012 tax return will be lodged for the period 1 January 2011 to 31 December 2011. As its 2012 income year begins on 1 January 2011, which is before 1 July 2011, it will not be able to claim the R&D tax incentive until its 2013 income year, beginning on 1 January 2012.

I have an early-balancing December SAP with an income year from 1 January 2011 to 31 December 2011. Can I claim the R&D tax concession from 1 January 2011 to 30 June 2011 and the R&D tax incentive from 1 July 2011 to 31 December 2011?

No, the R&D tax incentive applies to income years beginning on or after 1 July 2011. You cannot claim the R&D tax incentive for an income year beginning before this date. If eligible, you will be able to claim the R&D tax concession for your 2012 income year and claim the R&D tax incentive for your 2013 income year.

I’m unable to claim the R&D tax incentive in my 2012 tax return as my 2012 income year begins before 1 July 2011. How do I claim the R&D tax concession for the 2012 income year?

Courtesy of the ATO website.

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