Income Tax Act 2007

MX 1 When subpart applies
When this subpart applies

(1)

This subpart applies to a person for an income year when—

(a)

the person chooses that the subpart apply to the person for the income year; and

(b)

the corporate eligibility criteria in section MX 2 are met; and

(c)

ignoring this subpart, the person has a net loss for the corresponding tax year; and

(d)

if the person is a member of a group of entities meeting the requirements of subsection (2), the R&D group, in aggregate and ignoring this subpart, has a net loss for the corresponding tax year; and

(e)

the person incurs R&D expenditure in the income year; and

(f)

the wage intensity criteria in section MX 3 are met; and

(g)

intellectual property and know-how that results from the research or development vests in the person, solely or jointly.

Meaning of R&D group

(2)

R&D group means a group of entities for which—

(a)

each member of the group is a company, look-through company, or limited partnership; and

(b)

all the members of the group that are companies are members of the same group of companies (the company group); and

(c)

each member of the group that is a look-through company would be a member of the company group if the look-through company were treated as being a company; and

(d)

each member of the group that is a limited partnership would be a member of the company group if the partnership were treated as being a company and each partner were treated as holding a proportion of the total shares in the company equal to the proportion of the total capital contributions, as defined in section HG 11 (Limitation on deductions by partners in limited partnerships), to the partnership that is capital contributions made by the partner to the partnership.

Defined in this Act: capital contribution, company, group of companies, income year, intellectual property, know-how, limited partnership, look-through company, net loss, partner, partnership share, R&D expenditure, R&D group, tax year

Section MX 1: inserted (with effect on 1 April 2015 and applying for income years beginning on or after that date), on 24 February 2016, by section 213(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section MX 1(1) heading: inserted, on 29 March 2018 (with effect on 1 April 2015), by section 165 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).