Taxation Law ITAA 1997 - PDF
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Added on 2021-06-14
Taxation Law ITAA 1997 - PDF
Added on 2021-06-14
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Running head: TAXATION LAWTaxation LawName of the StudentName of the UniversityAuthors NoteCourse ID
TAXATION LAW1Table of ContentsIntroduction:...............................................................................................................................2Overview of the regularity government:....................................................................................2ITAA 1997:................................................................................................................................3Research and development.........................................................................................................4Overview:...............................................................................................................................4Effectiveness of incentives:....................................................................................................5Tax reformation:.....................................................................................................................6Future Direction:....................................................................................................................7Conclusion:............................................................................................................................7Reference List:...........................................................................................................................9
TAXATION LAW2Introduction: There are several countries that provide substantial subsidies for the innovationsrelating to the research and development. During the year 1985-86 Australia introduced thesystem of research and development as the most tax incentive in the world that provides thefirms with the facilities of deducting a wide range of expenditure by 150 per cent (Woellneret al., 2016). The application of the research and development tax concession during the year1985 took place when the policy of industry was shifting in the direction of greaterintegration with the international economy. The concession along with the Research and Development programs that wereintroduced as the reorienting the Australian firms and changing the attitudes of themanagement in the direction of research and development (Barkoczy 2016). The Australiangovernments have introduced access of Research and Development as the support mechanismthat grants soft loans with encouragement towards syndicate Research and Developmentconcessions that have completely dominated the expenses of government during the lastdecade. The tax concessions that is offered is regarded very generous in terms of theAustralian standards. Irrespective of the discount in the rate of concessions, Australian offersthe third most generous treatment of tax of research and development among the other OECDnations. Overview of the regularity government: The research and development tax incentives provides the small business with theencouragement to indulge in the Research and Development activities that would benefitAustralian and giving tax offset to the small business for the eligible research anddevelopment activities (Basu 2016). The Research and Development programme was initiallyintended to be temporary measure which was due to be terminated on 30 June 1991. During
TAXATION LAW3the month of march, it was declared as the permanent measurement although a single subjectbut several changes over time. The basic regularity of the Research and Development is to offer tax incentive to thesmall business in order to undertake greater level of research and development in Australia.The detailed objective of the Research and Development tax concessions is regarded as thewider concept which has evolved over the time period (Long, Campbell and Kelshaw 2016).The objective of the 150 per cent tax concession is promote the Australian companies toundertake more innovative and internationally competitive by growing the investment in theResearch and Development. The objective of the tax concession was to enhance theconditions of the commercialisation of the new procedure and technologies through which theproducts are developed in Australia. The taxation ruling of 92/2 explains that there are certain types of expenditure that areincurred in the procedure of scientific research and development based on subsection 73A (1)of the ITAA 1936 (Cao et al. 2015). The income tax deductions must be allowed under thesubsection 73A (1) of the ITAA 1936 if the expenditure is not considered as allowable underany other section of the Act. Small business is allowed to claim deduction under this rulinggive the payments are made to the approved scientific research institute associated to thebusiness of the taxpayer. A small business is allowed to claim deductions given the paymentsare made to the approved research institutes that has undertaken the purpose of undertakingthe scientific research associated to the taxpayer’s business class. ITAA 1997: The income tax assessment act 1997 is regarded as the act of parliament of Australia.It is regarded as the main statutes in which income tax is computed. There are severalsections of the act however the main considerations are the tax incentive for the Research and
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