(1) An * R&D entity cannot deduct expenditure under section 355 - 205 or 355 - 480 if:
(a) when it incurs the expenditure, the R&D entity or its * associate had received, or could reasonably be expected to receive, consideration:
(i) as a direct or indirect result of the expenditure being incurred; and
(ii) regardless of the results of the activities on which the expenditure is incurred; and
(b) that consideration is equal to or greater than the expenditure.
Note: Section 355 - 205 is about deductions for R&D expenditure. Section 355 - 480 is about deductions for earlier year associate R&D expenditure.
(a) when an * R&D entity incurs expenditure, the R&D entity or its * associate had received, or could reasonably be expected to receive, consideration:
(i) as a direct or indirect result of the expenditure being incurred; and
(ii) regardless of the results of the activities on which the expenditure is incurred; and
(b) that consideration is less than the expenditure;
the R&D entity cannot deduct under section 355 - 205 or 355 - 480 so much of the expenditure as is equal to the consideration.
(3) For the purposes of paragraphs (1)(a) and (2)(a), have regard to:
(a) anything that happened or existed before or at the time the expenditure is incurred; and
(b) anything that is likely to happen or exist after that time.
(4) This section does not apply to expenditure incurred on * R&D activities covered by paragraph 355 - 210(1)(b) or (c).
Note: Those paragraphs cover R&D activities conducted for foreign
residents.