Tax Incentives for Scientific Research and Development Activities
Added on 2020-05-16
10 Pages2374 Words342 Views
Running head: TAXATION LAWTaxation LawName of the StudentName of the UniversityAuthors NoteCourse ID
TAXATION LAW1Scientific Research and development activities get the tax incentives:Introduction:The activities of research and development provides the listed with the opportunity ofavailing tax incentives and simultaneously encourages the companies in indulging in theactivities of research and development. According to the Australian taxation office listedcompanies that executes the activities of scientific research and development is entitled ofreceiving tax incentives1. For listed companies the activities of research and development hastwo core constituents. The first constituent is related with the obtaining the tax incentivesrelating to some kind of eligible entities that have annual turnover over more than $20 millionwhereas the second constituents is related with the non-refundable tax offsets for thecompanies that are eligible for obtaining tax incentives. A noteworthy factor concerning the research and development is that it enables thelisted companies in obtaining the tax offset for that are conducting the eligible research anddevelopment by reducing the tax liabilities of the firm2. The tax offset usually ranges from38.5% to 43.5% which is obtainable in respect of the cost occurred by the companies on theactivities depending upon the annual turnover of the firm.1Snape, John, and Jeremy De Souza.Environmental taxation law: policy, contexts andpractice. Routledge, 2016.2Cao, Liangyue, et al. "Understanding the economy-wide efficiency and incidence of majorAustralian taxes."Treasury WP1 (2015).
TAXATION LAW2Discussion: According to the “Taxation Ruling of TR 92/2”, a business under section 73A of theact is entitled to claim allowable deductions for the scientific research and developmentperformed by the entity3. The “Taxation Ruling of 92/2” lay down the description in respectof the forms of expenses that is occurred by the listed companies in performing the researchand development scientific in nature would be regarded as an allowable deductions undersection “73A (1) of the ITAA 1936”. It is worth mentioning that the deductions for taxpurpose would be only considered allowable for the listed companies under the subsection73A (1) and the expenditure cannot be considered as allowable under any other section. For listed companies an allowable deductions can be claimed if the expenses isoccurred on carrying out the scientific research and development and the payment is made tothe approve research institute. In other words allowable deductions relating to tax can beconsidered allowable in subsection 73A (1) if the payments is made to the approved researchinstitute that have the objective of undertaking the scientific research related to the categoriesof tax payer business4. For listed companies allowable deductions would be consideredallowable given the expenses is occurred by the taxpayer for its business is possessing capitalnature and is entirely occurred in conducting the research that is related to the taxpayersbusiness. A noteworthy considered is stated under the “Taxation ruling of TR 92/2” no formof permissible deductions would be considered under the subsection 73A (1) if it is made tothe bodies that are not approved under the act. 3Blackstone, William and Thomas McIntyre Cooley,Commentaries On The Laws OfEngland(Callaghan and Cockcroft, 2014)4Coleman, Cynthia and Kerrie Sadiq,Principles Of Taxation Law 2013
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
The Research and Development Tax Incentiveslg...
|10
|2766
|292
Taxation Law Assignment: Taxation Ruling 92/2lg...
|12
|2761
|68
Implications of R&D Incentives - Doclg...
|12
|2764
|35
Assignment on Taxation Law (Doc)lg...
|11
|1671
|31
Taxation Law ITAA 1997 - PDFlg...
|11
|2737
|54
Professional Practice Taxationlg...
|9
|1393
|47