Published on 21 Feb 97
by THE TAX INSTITUTE
Much of the confusion surrounding the issue of distinguishing plant or pilot plant from prototypes stems from conflicting definitions and information provided in the Income Tax Assessment Act 1936 (the Act) and relevant tax Rulings. For example, paragraph 22 of IT 2552, under the heading of "Cost of a Prototype and similar works", as reproduced in the Guide to Benefits for the R & D Tax Concession, proceeds to discuss pilot plant (not prototypes) in the first sentence. Whilst the amended version of this paragraph now makes the distinction between pilot plant and prototypes clear, it creates further confusion by directly conflicting the definition of pilot plant in section 73B of the Act.
TAX POLICY & RESEARCH DIVISION
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