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Act No. 13 of 2015 as amended, taking into account amendments up to Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020
An Act to amend the law relating to taxation, and for related purposes
Administered by: Treasury
Registered 10 Feb 2021
Start Date 01 Jan 2021
Table of contents.

Commonwealth Coat of Arms of Australia

Tax Laws Amendment (Research and Development) Act 2015

No. 13, 2015

Compilation No. 1

Compilation date:                              1 January 2021

Includes amendments up to:            Act No. 92, 2020

Registered:                                         10 February 2021

About this compilation

This compilation

This is a compilation of the Tax Laws Amendment (Research and Development) Act 2015 that shows the text of the law as amended and in force on 1 January 2021 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Legislation Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on the Legislation Register for the compiled law.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Editorial changes

For more information about any editorial changes made in this compilation, see the endnotes.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on the Legislation Register for the compiled law.

Self‑repealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

  

  

  


Contents

1............ Short title............................................................................................. 1

2............ Commencement................................................................................... 1

3............ Schedule(s)......................................................................................... 1

Schedule 1—Reduced tax offset rate for expenditure above $100 million              3

Part 1—Main amendments                                                                                         3

Income Tax Assessment Act 1997                                                                              3

Income Tax (Transitional Provisions) Act 1997                                                    6

Endnotes                                                                                                                                      8

Endnote 1—About the endnotes                                                                              8

Endnote 2—Abbreviation key                                                                                10

Endnote 3—Legislation history                                                                             11

Endnote 4—Amendment history                                                                           12


An Act to amend the law relating to taxation, and for related purposes

1  Short title

                   This Act may be cited as the Tax Laws Amendment (Research and Development) Act 2015.

2  Commencement

             (1)  Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1.  Sections 1 to 3 and anything in this Act not elsewhere covered by this table

The day this Act receives the Royal Assent.

5 March 2015

2.  Schedule 1, Part 1

The day this Act receives the Royal Assent.

5 March 2015

Note:          This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

             (2)  Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3  Schedule(s)

                   Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1Reduced tax offset rate for expenditure above $100 million

Part 1Main amendments

Income Tax Assessment Act 1997

1  Subsection 67‑30(1)

Before “the amount”, insert “all or part of”.

2  Section 67‑30 (note 2)

Repeal the note, substitute:

Note 2:       This subsection can apply to an entitlement under any subsection of section 355‑100.

3  Subsection 355‑100(1) (heading)

Repeal the heading, substitute:

If notional deductions are between $20,000 and $100 million

4  At the end of section 355‑100

Add:

If notional deductions exceed $100 million

             (3)  Despite subsection (1), if the total of those amounts exceeds $100 million, the *R&D entity is instead entitled to a *tax offset for the income year equal to the sum of:

                     (a)  that percentage of $100 million; and

                     (b)  the product of the excess and the *corporate tax rate.

Note:          The R&D entity may be able to reduce related amounts that would otherwise be:

(a)    included in its assessable income because of a balancing, or feedstock, adjustment; or

(b)    payable as extra income tax because of an R&D recoupment;

(see section 355‑720).

5  At the end of section 355‑525

Add:

Amount to be included in assessable income may be reduced if notional deductions exceeded $100 million

             (4)  For the purposes of subsection (3), the partner may choose to reduce the adjusted section 40‑285 amount in that subsection if:

                     (a)  subsection 355‑100(3) applied to the partner for an earlier income year or the event year (the excess year); and

                     (b)  the partner’s deductions for the excess year included deductions covered by paragraph (1)(c) of this section for the asset.

             (5)  Subsection 355‑720(3) applies to the partner as if a reduction under subsection (2) of that section for the present year included a reduction under subsection (4) of this section for the event year.

             (6)  The way the partner prepares its income tax returns is sufficient evidence of the making of a choice under subsection (4).

             (7)  A choice under subsection (4) is irrevocable.

6  At the end of Subdivision 355‑W

Add:

355‑720  Certain related amounts may be reduced if notional deductions exceeded $100 million

             (1)  The object of this section is to prevent the portion of a *tax offset worked out using the *corporate tax rate being clawed back in later income years.

Note:          This applies when the R&D entity’s notional deductions exceed $100 million (see subsection 355‑100(3)).

             (2)  For the purposes of working out a matter referred to in column 1 of an item of this table for an income year (the present year), the *R&D entity may choose to reduce the amount referred to in column 3 of that item if:

                     (a)  subsection 355‑100(3) applied to the R&D entity for an earlier income year or the present year (the excess year); and

                     (b)  the R&D entity’s deductions for the excess year included deductions covered by a provision referred to in column 2 of that item.

 

Reducing extra income tax or amounts included in assessable income

Item

Column 1

For the purposes of working out this matter:

Column 2

If its excess year deductions included those covered by:

Column 3

This can be reduced:

1

any amount to include in the *R&D entity’s assessable income for the present year because of a *balancing adjustment event happening for an asset it *held

(a) paragraph 40‑292(1)(b); or

(b) paragraph 355‑315(1)(c);

for the asset

its adjusted section 40‑285 amount (see subsection 40‑292(5) or 355‑315(3)) for the present year, the asset and the *balancing adjustment event

2

any amount of extra income tax payable by the *R&D entity under section 355‑435 for the present year

subsection 355‑450(1)

those excess year deductions

3

any amount to include in the *R&D entity’s assessable income for the present year under section 355‑465

paragraph 355‑465(1)(b)

those excess year deductions

Note 1:       Item 2 is about R&D recoupments and item 3 is about feedstock adjustments.

Note 2:       Reducing the amount in column 3 will reduce the amount in column 1.

             (3)  The *R&D entity’s circumstances may allow it to choose multiple reductions under subsection (2) for the present year. The total of any reductions cannot be more than the amount of its excess under subsection 355‑100(3) for the excess year.

             (4)  The way an *R&D entity prepares its income tax returns is sufficient evidence of the making of a choice under this section.

             (5)  A choice under this section is irrevocable.

355‑750  Review of rate when notional deductions exceed $100 million

             (1)  The Minister must cause a review of the operation of subsection 355‑100(3) (about the rate of tax offset when notional deductions exceed $100 million) to be undertaken as soon as possible after the fifth anniversary of the commencement of that subsection.

             (2)  The Minister must cause a copy of the report of the review to be tabled in each House of the Parliament within 15 sitting days of receiving it.

Income Tax (Transitional Provisions) Act 1997

7  After subsection 355‑325(4)

Insert:

Amount to be included in assessable income may be reduced if notional deductions exceeded $100 million

          (4A)  For the purposes of subsection (4), the partner may choose to reduce the adjusted section 40‑285 amount in that subsection if:

                     (a)  subsection 355‑100(3) of the Income Tax Assessment Act 1997 applied to the partner for an earlier income year or the event year (the excess year); and

                     (b)  the partner’s deductions for the excess year included deductions covered by paragraph (1)(c) of this section for the asset.

          (4B)  Subsection 355‑720(3) of the Income Tax Assessment Act 1997 applies to the partner as if a reduction under subsection (2) of that section for the present year included a reduction under subsection (4A) of this section for the event year.

          (4C)  The way the partner prepares its income tax returns is sufficient evidence of the making of a choice under subsection (4A).

          (4D)  A choice under subsection (4A) is irrevocable.

8  At the end of Division 355

Add:

Subdivision 355‑WOther matters

Table of sections

355‑720    Certain related amounts may be reduced if notional deductions exceeded $100 million

355‑720  Certain related amounts may be reduced if notional deductions exceeded $100 million

                   Section 355‑720 of the Income Tax Assessment Act 1997 also applies as if the table in subsection (1) of that section included the following item:

1A

any amount to include in the *R&D entity’s assessable income for the present year because of a *balancing adjustment event happening for an asset it *held

(a) paragraph 40‑292(1)(b) of the Income Tax (Transitional Provisions) Act 1997; or

(b) paragraph 355‑320(1)(c) of that Act

its adjusted section 40‑285 amount (see subsection 40‑292(3) or 355‑320(4) of that Act) for the present year, the asset and the *balancing adjustment event

9  Application of amendments

The amendments made by this Part apply in relation to an R&D entity’s assessments for income years commencing on or after 1 July 2014.


Endnotes

Endnote 1—About the endnotes

The endnotes provide information about this compilation and the compiled law.

The following endnotes are included in every compilation:

Endnote 1—About the endnotes

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4—Amendment history

Abbreviation key—Endnote 2

The abbreviation key sets out abbreviations that may be used in the endnotes.

Legislation history and amendment history—Endnotes 3 and 4

Amending laws are annotated in the legislation history and amendment history.

The legislation history in endnote 3 provides information about each law that has amended (or will amend) the compiled law. The information includes commencement details for amending laws and details of any application, saving or transitional provisions that are not included in this compilation.

The amendment history in endnote 4 provides information about amendments at the provision (generally section or equivalent) level. It also includes information about any provision of the compiled law that has been repealed in accordance with a provision of the law.

Editorial changes

The Legislation Act 2003 authorises First Parliamentary Counsel to make editorial and presentational changes to a compiled law in preparing a compilation of the law for registration. The changes must not change the effect of the law. Editorial changes take effect from the compilation registration date.

If the compilation includes editorial changes, the endnotes include a brief outline of the changes in general terms. Full details of any changes can be obtained from the Office of Parliamentary Counsel.

Misdescribed amendments

A misdescribed amendment is an amendment that does not accurately describe the amendment to be made. If, despite the misdescription, the amendment can be given effect as intended, the amendment is incorporated into the compiled law and the abbreviation “(md)” added to the details of the amendment included in the amendment history.

If a misdescribed amendment cannot be given effect as intended, the abbreviation “(md not incorp)” is added to the details of the amendment included in the amendment history.

 

Endnote 2—Abbreviation key

ad = added or inserted

o = order(s)

am = amended

Ord = Ordinance

amdt = amendment

orig = original

c = clause(s)

par = paragraph(s)/subparagraph(s)

C[x] = Compilation No. x

/sub‑subparagraph(s)

Ch = Chapter(s)

pres = present

def = definition(s)

prev = previous

Dict = Dictionary

(prev…) = previously

disallowed = disallowed by Parliament

Pt = Part(s)

Div = Division(s)

r = regulation(s)/rule(s)

ed = editorial change

reloc = relocated

exp = expires/expired or ceases/ceased to have

renum = renumbered

effect

rep = repealed

F = Federal Register of Legislation

rs = repealed and substituted

gaz = gazette

s = section(s)/subsection(s)

LA = Legislation Act 2003

Sch = Schedule(s)

LIA = Legislative Instruments Act 2003

Sdiv = Subdivision(s)

(md) = misdescribed amendment can be given

SLI = Select Legislative Instrument

effect

SR = Statutory Rules

(md not incorp) = misdescribed amendment

Sub‑Ch = Sub‑Chapter(s)

cannot be given effect

SubPt = Subpart(s)

mod = modified/modification

underlining = whole or part not

No. = Number(s)

commenced or to be commenced

 

Endnote 3—Legislation history

 

Act

Number and year

Assent

Commencement

Application, saving and transitional provisions

Tax Laws Amendment (Research and Development) Act 2015

13, 2015

5 Mar 2015

5 Mar 2015 (s 2(1) items 1, 2)

 

Treasury Laws Amendment (A Tax Plan for the COVID‑19 Economic Recovery) Act 2020

92, 2020

14 Oct 2020

Sch 4 (items 12–14): 1 Jan 2021 (s 2(1) item 7)

Sch 4 (item 14)

 

Endnote 4—Amendment history

 

Provision affected

How affected

s 2........................................

am No 92, 2020

Schedule 1

 

Part 2...................................

rep No 92, 2020

item 10.................................

rep No 92, 2020

item 11.................................

rep No 92, 2020

item 12.................................

rep No 92, 2020

item 13.................................

rep No 92, 2020

item 14.................................

rep No 92, 2020

item 15.................................

rep No 92, 2020

item 16.................................

rep No 92, 2020

item 17.................................

rep No 92, 2020