Commonwealth Consolidated Acts Commonwealth Consolidated Acts
Income Tax Assessment Act 1936
1 Subsection 6(1)
Insert:
"consolidated group" has the same meaning as in the Income Tax Assessment Act 1997 .
2 Subsection 6(1)
Insert:
"head company" of a consolidated group or a MEC group has the same meaning as in the Income Tax Assessment Act 1997 .
3 Subsection 6(1)
Insert:
"MEC group" has the same meaning as in the Income Tax Assessment Act 1997 .
4 Subsection 6(1)
Insert:
"member" of a consolidated group or MEC group has the same meaning as in the Income Tax Assessment Act 1997 .
5 Subsection 6(1)
Insert:
"subsidiary member" of a consolidated group or a MEC group has the same meaning as in the Income Tax Assessment Act 1997 .
6 Subsection 6(1)
Insert:
"tax cost is set" has the same meaning as in the Income Tax Assessment Act 1997 .
7 After section 73B
Insert:
The purpose of sections 73BAB, 73BAC, 73BAD, 73BAE and 73BAF is to ensure that the research and development concession interacts properly with the consolidation regime in Part 3 - 90 of the Income Tax Assessment Act 1997 .
73BAB Head company treated as registered
Sections 73B to 73Z (inclusive) of this Act apply to the head company of a consolidated group or MEC group as if the head company:
(a) were an eligible company; and
(b) were registered under section 39J of the Industry Research and Development Act 1986 in relation to particular activities in respect of a year of income;
during any period that a subsidiary member of the group is an eligible company and registered under section 39J of that Act in relation to those activities in respect of that year of income.
73BAC Expenditure history: joining entity
(1) For the purposes of sections 73P to 73Z (inclusive), where a company (the joining company ) becomes a member of a consolidated group or MEC group, those provisions have effect after the joining company became a member as if:
(a) any incremental expenditure (see section 73P) incurred by the joining company before it became a member had been incurred by the head company of the group; and
(b) any amounts the joining company has deducted or can deduct for that expenditure had been deducted by the head company.
(2) Subsection ( 1) has effect after any application of subsection 73R(3) or (4) (exceptions to R&D membership period rules).
Note: This provision overrides section 701 - 5 of the Income Tax Assessment Act 1997 (the consolidation entry history rule) for the purposes of the incremental expenditure provisions.
73BAD Expenditure history: leaving entity
(1) For the purposes of sections 73P to 73Z (inclusive), where a company (the leaving company ) ceases to be a member of a consolidated group or MEC group, those provisions have effect after the leaving company ceased to be a member as if:
(a) any incremental expenditure (see section 73P) actually incurred by the leaving company while it was a member of the group had been incurred by it rather than by any other member of the group; and
(b) any amounts the head company of the group has deducted or can deduct for that expenditure had been deducted by the leaving company.
(2) Subsection ( 1) has effect before any application of subsection 73R(3) or (4) (exceptions to R&D membership period rules).
Note: This provision overrides section 701 - 40 of the Income Tax Assessment Act 1997 (the consolidation exit history rule) for the purposes of the incremental expenditure provisions.
73BAE Recoupment where entity leaves group
(1) All or part of an amount that would, apart from this subsection, be allowable as a deduction to the head company of a consolidated group or MEC group under section 73B or 73BA for a year of income is not allowable as such a deduction if:
(a) the expenditure that would have given rise to the deduction was incurred by another company that was a subsidiary member of the group; and
(b) the other company ceased, during or after that year of income, to be a subsidiary member of the group; and
(c) the other company would have been denied a deduction for all or that part of the amount for that year of income because it received a recoupment or grant to which section 73C would apply if the other company had never been a subsidiary member of the group.
(2) The other company must, within 60 days after the end of the financial year in which it received or became entitled to receive the recoupment or grant, give the head company details in the approved form of the part of the initial clawback amount for the recoupment or grant (see section 73C) to be applied by the head company in determining the reduction in the amount referred to in subsection ( 1).
73BAF Preventing double deductions
(1) This section applies to the head company of a consolidated group or MEC group if, after the tax cost is set for a depreciating asset, the company can deduct an amount (the reduction amount ) for expenditure in relation to the asset under section 73B for a year of income.
(2) The company's deduction for the decline in value of the asset under Division 40 of the Income Tax Assessment Act 1997 , and its notional Division 40 deduction under section 73BC of this Act, for the year of income are reduced (but not below nil) by the reduction amount.
(3) Any part of the reduction amount remaining after that reduction is applied to reduce the company's deductions for the decline in value of the asset under Division 40 of the Income Tax Assessment Act 1997 , and its notional Division 40 deduction under section 73BC of this Act, for later years of income.
Income Tax Assessment Act 1997
8 Section 701 - 5 (note)
Omit "Note", substitute "Note 1".
9 At the end of section 701 - 5
Add:
Note 2: Section 73BAC of the Income Tax Assessment Act 1936 overrides this rule for the purposes of the research and development incremental expenditure provisions.
10 At the end of subsection 701 - 40(1)
Add:
Note: Section 73BAD of the Income Tax Assessment Act 1936 overrides this rule for the purposes of the research and development incremental expenditure provisions.
11 After paragraph 701 - 40(2)(c)
Insert:
(d) any registration under section 39J of the Industry Research and Development Act 1986 for particular research and development activities;
Taxation Administration Act 1953
12 Section 286 - 1 of Schedule 1
Omit "to the Commissioner".
13 Section 286 - 25 of Schedule 1
Omit "to the Commissioner".
14 At the end of section 286 - 75 of Schedule 1
Add:
(3) You are also liable to an administrative penalty if:
(a) you are required under subsection 73BAE(2) of the Income Tax Assessment Act 1936 to give written details of an initial clawback amount (see section 73C of that Act) to another company by a particular day; and
(b) you do not give the details to the other company by that day.
15 Subsection 286 - 80(2) of Schedule 1
Repeal the subsection, substitute:
(2) The base penalty amount is:
(a) for failing to lodge a return, notice or other document on time or in the * approved form--1 penalty unit for each period of 28 days or part of a period of 28 days starting on the day when the document is due and ending when you give it to the Commissioner (up to a maximum of 5 penalty units); or
(b) for failing to give written details as mentioned in subsection 286 - 75(3)--1 penalty unit for each period of 28 days or part of a period of 28 days starting on the day when the details are due and ending when you give the details.
Note: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit.
Example: An entity lodges a return 31 days late. The base penalty amount under subsection ( 2) is 2 penalty units.