ARTICLE · 30 JULY 2020

Tax Implications For R&D Activities Subsidised By JobKeeper Payments

Johnson Winter & Slattery

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Earlier this week the ATO released draft TD 2020/D1 Income tax: notional deductions for R&D activities subsidised by JobKeeper payments to clarify its view on how section 355-405...

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Kathryn Bertram

Julian Wan

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Earlier this week the ATO released draft TD 2020/D1 Income tax: notional deductions for R&D activities subsidised by JobKeeper payments to clarify its view on how section 355-405 of the Income Tax Assessment Act 1997 (Cth) (ITAA97) applies to JobKeeper payments for employees and eligible business participants.

Section 355-405 is the ‘at-risk rule' which states that an R&D entity cannot notionally deduct expenditure under sections 355-205 or 355-480 of the ITAA97 if:

a) when it incurs expenditure, the R&D entity (or an associate) has received, or could reasonably be expected to receive, consideration:

i. as a direct or indirect result of the expenditure being incurred, and

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