Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (No. 5) 1988 No. 153 of 1988 - SECT 12

12. Section 73B of the Principal Act is amended:

   (a)  by inserting in subsection (1) the following definitions:

" 'accelerated expenditure', in relation to an eligible company, means:

   (a)  contracted expenditure of the company; or

   (b)  expenditure incurred by the company in respect of research and
        development activities comprised or included in a project in relation
        to which the company and another company or companies are jointly
        registered under section 39P of the
        Industry Research and Development Act 1986;
'advance R and D expenditure' means research and development expenditure in
respect of which the following conditions are satisfied:

   (a)  the expenditure is incurred after 20 November 1987 under an agreement
        (whenever entered into);

   (b)  the eligible service period in relation to the expenditure ends more
        than 13 months after the day on which the expenditure is incurred;

   (c)  the amount of the expenditure is equal to or greater than $1,000; and

   (d)  the expenditure is not expenditure that is required to be incurred by
        a law, or by an order of a court, of the Commonwealth, a State or a
        Territory;
'agreement' means any agreement, arrangement, understanding or scheme, whether
formal or informal, whether express or implied and whether or not enforceable,
or intended to be enforceable, by legal proceedings;
'eligible service period', in relation to an amount of expenditure under an
agreement, means so much of the service period in relation to the expenditure
as occurs after the expenditure is incurred;
'service period', in relation to an amount of expenditure under an agreement,
means the period during which the thing done under the agreement in return for
the amount of expenditure is done;";

   (b)  by inserting after subsection (10) the following subsection:

"(11) For the purposes of this section:

   (a)  subject to paragraph (b), advance R and D expenditure of an eligible
        company shall be taken to be incurred in equal proportions throughout
        its eligible service period; and

   (b)  where advance R and D expenditure of an eligible company is
        accelerated expenditure and its eligible service period occurs in 2 or
        more years of income-any part of that expenditure that would otherwise
        be taken by paragraph (a) to be incurred in the second or a later year
        of income shall instead be taken to be incurred in equal proportions
        throughout the part of the eligible service period occurring in the
        year of income preceding that second or later year of income.";

   (c)  by inserting in subsection (33B) "in relation to research and
development activities referred to in the certificate that is" after
"expenditure".