In order to encourage companies to invest in innovation and facilitate the commercialization of innovation, the tax deduction is granted on the paid costs associated with registering patents, trademarks, designs and plant varieties (called “qualifying intellectual property rights” or “IP” in the following paragraphs), in accordance with Section 14A of the Income Tax Act. Note d): From YA 2011 to YA 2018, an additional 300% can be added to the expenses of R and D eligible for staff costs (excluding administrative costs) and consumables under the PIC scheme. In order to encourage businesses, especially smaller ones, to register and protect their IPs, the Minister of Finance announced in Budget 2018 that the tax deduction would be for qualified ip registration fees: if the entity has benefited from a tax deduction on the costs of registering qualified intellectual property rights and whether it sells all or part of these intellectual property rights , transferred or sold. Recovery adjustments can be made: under the PIC plan, eligible costs apply to a 400% tax deduction (basic deduction of 100% and 300% increased deduction) subject to a specified spending limit. The deduction registration fee is an official and a career fee. (1) In accordance with paragraph 16 of FRS 16, the cost of a tangible asset includes the first estimate of the costs of dismantling and disposing of the element, the restoration of the site on which the article is located, the obligation for which a business is created, either at the time of the acquisition of the business or as a result of the use of the case for a certain period of time, for purposes other than the production of stocks during that period. All costs of R and D that were not claimed in the YA with respect to the reference period during which they were incurred in the first place are not deductible in the following ASAs. In order to qualify for a tax deduction, registration fees must be incurred during the period of entitled: the section 14Q deduction is granted only if the company pursues the profession for which the costs of research and development D were hired. If the trade, business or profession is permanently suspended for a period of 3 YAs, the section 14Q deduction ceases effectively from that YA. The balance of the 14Q deduction to be claimed is not deducted in subsequent ASAs. Company A has entered into a lease to lease office space for two years with a monthly rent of $US 5,000 for 2018 and 2019.
The landlord offered company A a 2-month rent-free period for the first year, with the monthly rent not to be paid until the third month. The total cost of the rental is $50,000 for YA 2019 and $60,000 for YA 2020. For example, eligible costs are research on the state of the art and translation costs when IP offices are to be submitted in their native language. Businesses claiming a tax deduction for registration fees are not required to provide supporting documentation of their income tax return.