SECTION 73BA DEDUCTION FOR CERTAIN ASSETS ETC. USED FOR THE PURPOSE OF CARRYING ON RESEARCH AND DEVELOPMENT ACTIVITIES
The object of this section is to provide a tax incentive, in the form of a deduction, to make eligible companies more internationally competitive by:
(a) encouraging the development by eligible companies of innovative products, processes and services; and
(b) increasing investment by eligible companies in defined research and development activities; and
(c) promoting the technological advancement of eligible companies through a focus on innovation and high technical risk in defined research and development activities; and
(d) encouraging the use by eligible companies of strategic research and development planning; and
(e) creating an environment that is conducive to increased commercialisation of new processes and product technologies developed by eligible companies.
The benefits of the tax incentive are targeted by being limited to particular expenditure on certain defined activities.
73BA(2) Entitlement to deduction.
If an eligible company has a notional Division 40 deduction for a section 73BA depreciating asset for a year of income, the company is entitled to a deduction under this section for the asset for the year of income.
73BA(3) Amount of deduction.
If the eligible company's aggregate research and development amount for the year of income is more than $20,000, the deduction is equal to the notional Division 40 deduction multiplied by 1.25. If not, it equals the notional Division 40 deduction.
73BA(4) No deduction if earlier small business or Division 40 low-value pool deductions allowable.
An eligible company is not entitled to a deduction under this section for a section 73BA depreciating asset for any period if the company was entitled to:
(a) a deduction for the asset for any earlier period under Subdivision 328-D (about small business entities) of the Income Tax Assessment Act 1997; or
(b) a deduction for the asset for any earlier period under Division 40 of that Act, in a case to which section 40-440 (about low-value pools) of that Act applied.
[CCH Note: S 73BA(5) and (6) omitted from Bill.]
S 73BA(4) amended by No 80 of 2007, s 3 and Sch 3 item 98, by substituting "small business entities" for "STS taxpayers" in para (a), applicable in relation to the 2007-08 income year and later income years.
73BA(7) Expenditure deductible etc. under this section not deductible under other provisions.
If the whole or a part of an amount of expenditure incurred by an eligible company:
(a) has been allowed or is or may become allowable as a deduction under this section; or
(b) would have been so allowed or become so allowable if the company had not chosen a tax offset under section 73I;
that whole or part is not an allowable deduction, and is not to be taken into account in working out the amount of an allowable deduction, from the assessable income of the company of any year of income under any other provision of this Act.
In this section:
aggregate research and development amount has the same meaning as in section 73B.
eligible company has the same meaning as in section 73B.
notional Division 40 deduction has the meaning given by section 73BC.
research and development activities has the same meaning as in section 73B.
section 73BA depreciating asset has the meaning given by section 73BB.