Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Fisheries and Forestry) Share this | Hansard source

by leave—I move amendments (14) and (19) on sheet 7011 together:

(14)    Schedule 1, item 1, page 27 (line 6) to page 29 (line 7), omit Subdivision 355-H, substitute:

Subdivision 355-H—Feedstock adjustments

Table of sections

355-460    What this Subdivision is about

355-465    Feedstock adjustment to R&D expenditure

355-470    Experimental production activity

355-475    Application to connected entities and affiliates

355-460 What this Subdivision is about

Where an R&D activity that is an experimental production activity produces product held for sale, applied to own use or further processing, then the value of the tax offset for that R&D activity is reduced by the lower of:

  (a)   the expenditure on feedstock goods, materials and energy that are transformed or processed into the stock or assets; and

  (b)   the value of the feedstock output produced by the R&D activity.

355-465 Feedstock adjustment to R&D expenditure

(1)   This section applies to an *R&D entity and an *experimental production activity for an income year if:

  (a) the entity incurs expenditure in the income year in acquiring or producing feedstock inputs for the *experimental production activity;and

  (b) the entity obtains under section 355-100 *tax offsets for one or more income years for deductions under this Division in relation to the *experimental production activity:

     (i) for expenditure on feedstock inputs for the *experimental production activity; or

     (ii) for expenditure it incurs on any energy input directly into the transformation or processing of such feedstock inputs; and

  (c)    the entity recovers value in the income year from feedstock outputs of the *experimental production activity by:

     (i)   sale of the feedstock outputs; or

     (ii)   using them as feedstock inputs into further processing or transformation; or

     (iii)   applying them to its own use.

(2)   The expenditure eligible for the *tax offset under section 355-100 for the *experimental production activity is reduced in the income year by the lesser of:

  (a)   the total expenditure giving rise to the deductions mentioned in paragraph (1)(b), apart from expenditure that has already been used under this paragraph; and

  (b)   the value recovered under paragraph (1)(c), worked out as follows:

     (i)   if the feedstock output is sold in that year without further transformation or processing after the *experimental production activity, then the value is the consideration received for the goods or materials produced by this *experimental production activity;

     (ii)   otherwise, the value is the market value of the feedstock output at the first point it is able to be valued after the completion of the *experimental production activity.

(3)   For this section, feedstock inputs are goods or materialsthat are transformed or processed during an *experimental production activity into one or more tangible products (the feedstock outputs).

355-470 Experimental production activity

(1)   An experimental production activityis the collection of all the necessary *R&D activities needed to be carried out to achieve the objective of a production trial, except for those activities that are only to acquire or produce feedstock inputs.

(2)   An *experimental production activity includes all *R&D activities required to undertake the trial and produce the feedstock outputs to the point that these can reasonably be valued as finished goods or materials or intermediate goods or materials to be further processed or transformed in activities after the production trial.

355-475 Application to connected entities and affiliates

     This Subdivision applies to a *supply or use of the marketable product by:

  (a)   an entity *connected with the *R&D entity; or

  (b)   an *affiliate of the R&D entity or an entity of which the R&D entity is an affiliate;

as if it were by the R&D entity.

(19)   Schedule 1, item 4, page 43 (line 30), omit the definition of feedstock revenue, substitute:

experimental production activity has the meaning given by section 355-470.