INCOME TAX ASSESSMENT ACT 1997 - SECT 355.400 Expenditure incurred while not at arm's length

INCOME TAX ASSESSMENT ACT 1997 - SECT 355.400

    If:

  (a)   an * R&D entity incurs expenditure to another entity on all or part of an * R&D activity; and

  (b)   either:

  (i)   when the R&D entity incurs the expenditure, the R&D entity and the other entity do not deal with each other at * arm's length; or

  (ii)   the other entity is the R&D entity's * associate; and

  (c)   the expenditure exceeds the * market value of the relevant R&D activity or part (as appropriate);

for the purposes of this Division, the R&D entity is treated as if the amount of expenditure it incurred on the relevant R&D activity or part (as appropriate) were equal to that market value.

Note:   For the purposes of a deduction under section   355 - 305 or 355 - 520 for an asset's decline in value, the arm's length rules in Division   40 apply as part of the notional application of that Division under that section.