TAXATION LAWS AMENDMENT ACT 1988No. 11, 1988 - SECT 13 Expenditure on research and development activities

TAXATION LAWS AMENDMENT ACT 1988No. 11, 1988 - SECT 13

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

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

" 'associate' has the same meaning as in section 26AAB;
'non-associate', in relation to an eligible company, means a person who is not
an associate of the company;";

   (b)  by inserting after subsection (1) the following subsection:

"(1A) For the purpose of determining whether a person is an associate of
another person within the meaning of this section, the definition of
'relative' in subsection 6 (1) and the definition of 'associate' in subsection
26AAB (14) apply as if a reference in the definition concerned to the spouse
of a person included a reference to another person who, although not legally
married to the person, lives with the person on a bona fide domestic basis as
the husband or wife of the person.";

   (c)  by adding at the end of paragraph (2) (f) "or";

   (d)  by omitting paragraph (2) (g);

   (e)  by inserting after subsection (2) the following subsection:

"(2A) For the purposes of the definition of 'research and development
activities' in subsection (1), activities carried on by or on behalf of an
eligible company by way of the development of computer software shall not be
taken to be systematic, investigative or experimental activities unless the
computer software is developed for the purpose, or for purposes that include
the purpose, of sale, rent, licence, hire or lease to 2 or more non-associates
of the company (counting a non-associate of the company and the associates of
such a non-associate together as one person).";

   (f)  by inserting after subsection (5) the following subsection:

"(5A) This section does not apply to expenditure incurred by an eligible
company in the acquisition or construction of a building or of an extension,
alteration or improvement to a building unless:

   (a)  in the case of acquisition-any contract in respect of that acquisition
        was entered into before 21 November 1987;

   (b)  in the case of construction-either of the following subparagraphs
        applies:

        (i)    that construction commenced before 21 November 1987;

        (ii)   any contract in respect of that construction was entered into
               before 21 November 1987; and

   (c)  if the expenditure was incurred after 20 November 1987-the company
        intended, on 20 November 1987, that the building, or the extension,
        alteration or improvement to the building, as the case may be, would
        be for use by the company exclusively for the purpose of the carrying
        on by or on behalf of the company of research and development
        activities.".