A Bill for an Act about a minerals resource rent tax, and for
related purposes
The Parliament of Australia enacts:
Chapter 1—Introduction
Part 1‑1—Preliminary
Division 1—Preliminary
1‑1
Short title
This Act may be cited as the Minerals
Resource Rent Tax Act 2011.
1‑5
Commencement
This Act commences on 1 July 2012.
1‑10
Object of this Act
The object of this Act is to ensure that
the Australian community receives an adequate return for its *taxable resources,
having regard to:
(a) the inherent value of the
resources; and
(b) the non‑renewable nature of the
resources; and
(c) the extent to which the resources
are subject to Commonwealth, State and Territory royalties.
This Act does this by taxing above normal profits made by
miners (also known as economic rents) that are reasonably attributable to the
resources in the form and place they were in when extracted.
1‑15
Administration of this Act
The Commissioner has the general
administration of this Act.
Note: An effect of this provision is that people who
acquire information under this Act are subject to the confidentiality
obligations in Division 355 in Schedule 1 to the Taxation
Administration Act 1953.
1‑20
Extension to external Territories
The *MRRT law extends to every external
Territory other than the Australian Antarctic Territory.
1‑25
Extraterritorial application
The *MRRT law extends to acts, omissions,
matters and things outside *Australia (except where a contrary intention appears).
Part 1‑2—A guide to this Act
Division 2—Overview of this Act
2‑1
What this Act is about
This Act works out a miner’s MRRT
liability on mining profits made from extracting taxable resources (mainly coal
and iron ore) for a mining project interest for a year.
A mining project interest is
principally a share of the output of an undertaking to extract taxable
resources. Mining profit consists of mining revenue less mining expenditure.
The sum of the miner’s mining profits for its interests are taxed at the MRRT
rate.
Mining revenue is mainly that part of
the revenue the miner makes from supplying, exporting or using extracted
taxable resources (or things produced from them) that reasonably relates to the
form and place the resources were in at their valuation point (usually when leaving
the run‑of‑mine stockpile).
Mining expenditure is mainly the costs
of finding and extracting the taxable resources and getting them to their valuation
point.
Mining profit may be reduced by
allowances for past losses, for the miner’s existing investments at 2 May
2010 (called a starting base allowance), and for the miner’s Commonwealth, State
and Territory mining royalty amounts. Some allowances can be transferred to
other mining project interests to reduce their mining profits.
If the total mining profits of the
miner and certain connected entities is $50 million or less, a low‑profit
offset will ensure that the miner has no liability for MRRT. The offset is
phased‑out for profits between $50 million and $100 million.
2‑5
How this Act is arranged
(1) This Act is arranged in a way that
reflects the principle of moving from the general case to the particular.
(2) In this respect, the conceptual structure
of the Act is something like a pyramid. The pyramid shape illustrates the way
the MRRT law is organised, moving down from the central or core provisions at
the top of the pyramid, to general rules of wide application and then to the
more specialised topics.
Note: Provisions relating to the administration of
the MRRT and to collection and recovery of amounts of MRRT or instalments of
MRRT are contained in Schedule 1 to the Taxation Administration Act
1953.
Division 3—Defined terms
3‑1
When defined terms are identified
(1) Many of the terms used in the MRRT law are
defined.
(2) Most defined terms in this Act are
identified by an asterisk appearing at the start of the term: as in “*MRRT year”.
3‑5
When terms are not identified
(1) Once a defined term has been identified
by an asterisk, later occurrences of the term in the same subsection are not
usually asterisked.
(2) Terms are not asterisked in the non‑operative
material contained in this Act.
Note: The non‑operative material is described in Division 4.
(3) The following basic terms used throughout
the Act are not identified with an asterisk:
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Common definitions that
are not asterisked
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Item
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Term
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1
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Commissioner
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2
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extract
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3
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miner
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4
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mining project interest
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5
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MRRT
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3‑10
Identifying the defined term in a definition
Within a definition, the defined term is
identified by bold italics.
Division 4—Status of guides and other non‑operative material
4‑1
Non‑operative material
(1) In addition to the operative provisions
themselves, this Act contains other material to help readers identify
accurately and quickly the provisions that are relevant to them and to help them
understand those provisions.
(2) This other material falls into 2 main
categories, see sections 4‑5 and 4‑10.
4‑5 Guides
(1) One category is the guide in many
Divisions. Under the heading “What this Division is about’, a short explanation
of the Division appears in boxed text.
(2) Guides form part of this Act but are not
operative provisions. In interpreting an operative provision, guides may only
be considered for limited purposes. These are set out in subsection 245‑10(2).
4‑10
Other material
The other category consists of material
such as notes and examples. These also form part of the Act. They are usually distinguished
by font size from the operative provisions, but are not kept separate from
them.
Chapter 2—General liability rules
Part 2‑1—Core rules
Division 10—Core rules
Table of sections
10‑1 A miner’s liability for MRRT
10‑5 The MRRT liability for a mining project
interest
10‑10 MRRT allowances
10‑15 The effect of low profits on a miner’s
liability for MRRT
10‑20 Payment of MRRT
10‑25 MRRT years
10‑1 A
miner’s liability for MRRT
A miner is liable to pay MRRT, for an *MRRT year, equal
to the sum of its *MRRT
liabilities for each of its mining project interests for that year.
Note: For mining project interests,
see Part 2‑2.
10‑5
The MRRT liability for a mining project interest
Work out the miner’s MRRT
liability for a mining project interest for an *MRRT year as follows:
Method statement
Step 1. Work out the miner’s
*mining
profit for the mining project interest for the *MRRT year.
Note: For
the mining profit, see Part 2‑3.
Step 2. Work out the miner’s *MRRT allowances
for the mining project interest for the *MRRT year.
Note: For
MRRT allowances, see section 10‑10.
Step 3. Subtract the *MRRT allowances
from the *mining
profit.
Step 4. Multiply the result by
the *MRRT
rate. This is the miner’s MRRT liability for the mining project
interest for the *MRRT
year.
Note 1: For
the MRRT rate, see section 300‑1.
Note 2: If
the result from step 3 is zero, the miner’s MRRT liability will also be zero.
10‑10
MRRT allowances
The MRRT allowances, and
the order in which they are applied in working out *MRRT liabilities, are as follows:
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MRRT allowances
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Item
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Order of applying the
MRRT allowances
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See:
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1
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*Royalty
allowance
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Part 3‑1
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2
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*Transferred
royalty allowance
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Part 3‑2
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3
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*Pre‑mining
loss allowance
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Part 3‑3
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4
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*Mining
loss allowance
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Part 3‑4
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5
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*Starting
base allowance
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Part 3‑5
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6
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*Transferred
pre‑mining loss allowance
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Part 3‑6
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|
7
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*Transferred
mining loss allowance
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Part 3‑7
|
Note: MRRT allowances are made up of allowance
components, up to the amount of the relevant mining profit.
10‑15
The effect of low profits on a miner’s liability for MRRT
If the miner has an offset under section 45‑5
or 45‑10 for the *MRRT
year, the amount of MRRT that the miner must pay for the MRRT year is reduced
by the amount of the offset.
Note 1: For low profit offsets, see Part 2‑4.
Note 2: A miner is not liable to pay MRRT for the MRRT
year if the miner has chosen to use the simplified MRRT method under Division 200.
10‑20
Payment of MRRT
The miner must pay to the Commonwealth
its *assessed
MRRT for the *MRRT
year on or before the day on which the assessed MRRT becomes due and payable.
Note 1: For payment of MRRT, see Part 2‑5.
Note 2: Division 115 in Schedule 1 to the Taxation
Administration Act 1953 provides for payment of MRRT by instalments.
Note 3: Rehabilitation tax offsets reduce the amount of
MRRT that the miner must pay: see section 225‑25.
10‑25
MRRT years
An MRRT year is a *financial year
starting on or after 1 July 2012.
Note: Other accounting periods may be MRRT years if
a miner uses, for income tax purposes, an accounting period other than a
financial year: see Division 190 (Substituted accounting periods).
Part 2‑2—Mining project interests
Division 15—Mining project interests
Guide to Division 15
15‑1
What this Division is about
The concept of a mining project interest
is central to the MRRT. A miner’s liability is based on its MRRT liabilities
for each of its mining project interests.
Note: Chapter 4 contains special rules about
mining project interests, including combining, transferring and splitting of
mining project interests, and their suspension and termination.
Table of sections
Operative provisions
15‑5 When an entity has a mining project interest
15‑10 Iron ore mining project interests to be
kept separate
15‑15 Meaning of production
right
15‑20 Meaning of project
area
Operative provisions
15‑5
When an entity has a mining project interest
Mining project interest arising from a mining venture
(1) An *entity has a mining project
interest to the extent that the entity is entitled to share in the
output of a *mining
venture in which the entity participates (whether actively or otherwise, and
whether alone or with one or more other entities).
Note 1: There may be more than one mining venture to
extract taxable resources from an area covered by a production right.
Note 2: Changing or renewing a mining venture does not
cause the termination day of a mining project interest: see section 135‑15.
(2) If the *mining venture relates to one or more *production rights,
the *entity
has a separate mining project interest in relation to each
production right.
Example: Scouting Resources participates in a mining
venture relating to the extraction of taxable resources from an area covered by
3 production rights. Scouting Resources has 3 mining project interests, one in
relation to each production right.
Meaning of mining venture
(3) An undertaking is a mining venture if
the purpose, or a purpose, of the undertaking is:
(a) to extract some or all of the *taxable resources
from the area covered by one or more *production rights; and
(b) to produce an output that is a
taxable resource extracted under the authority of the production right or
rights, or something produced using such a taxable resource.
Example: CheckCo and BelCo enter into a contractual
arrangement under which they agree to jointly extract and process iron ore from
the whole area covered by a mining lease, and each take an equal share of the
ore once it has been pelletised.
Participation in this undertaking gives
rise to a mining project interest for each of CheckCo and BelCo, comprising
their respective entitlements to share in the pellets produced from the mining
venture.
Residual mining project interest
(4) An *entity has a mining project
interest to the extent that:
(a) the entity is entitled to extract *taxable resources
from the area covered by a *production right; and
(b) there is no *mining venture,
relating to the extraction of those taxable resources, that gives rise to a
mining project interest for one or more entities under subsection (1).
Note 1: The start of a mining venture relating to the
extraction of those taxable resources is treated as a mining project transfer
(if the venture relates to all of the resources), or otherwise, a mining
project split: see section 120‑25 (for transfers) or 125‑35 (for splits).
Note 2: Changing or renewing a production right does
not cause the termination day of a mining project interest: see section 135‑10.
Example: LesseeCo holds a mining lease, with a term of 21
years, to extract coal from an area. LesseeCo enters into a sublease with
DiggerCo, giving DiggerCo the exclusive right to extract coal from the whole
area for a period of 3 years.
LesseeCo has a mining project interest
under this subsection comprising its entitlement to extract coal from the area
after the expiration of the 3 year sublease.
If there is no mining venture relating to
the coal that may be extracted under the sublease, DiggerCo has a mining
project interest under this subsection comprising its entitlement to extract
the coal under the sublease.
Further entitlements constitute new mining project
interest
(5) If, after the *entity becomes entitled as
mentioned in subsection (1) or (4), the entity becomes so entitled to a
further extent, the entity is taken to have a separate mining project
interest corresponding to that further extent.
Note: The separate mining project interests are
combined into a single mining project interest under Division 115 if the
requirements of that Division are met.
Example: CheckCo and BelCo each have a mining project
interest comprising an entitlement to share in the output of a mining venture
in which they both participate.
CheckCo transfers its interest in the
mining venture to BelCo (Division 120, about transferring mining project
interests, applies). BelCo then has a mining project interest comprising the
entitlement it acquired from CheckCo to share in the output of the venture. That
mining project interest is separate from CheckCo’s original mining project
interest.
Royalties not to give rise to mining project interest
(6) To avoid doubt, a *mining royalty or a *private mining
royalty is not an output mentioned in subsection (1), unless it is a
private mining royalty that is payable in kind.
Example: CheckCo and BelCo each participate in a mining
venture that produces pelletised iron ore from the area covered by a production
right. Under the contractual arrangement between the parties, CheckCo is
entitled to take all the pelletised iron ore, and is required to pay BelCo an
amount of money calculated by reference to the quantity of iron ore extracted
under the mining venture.
CheckCo has a mining project interest
under subsection (1), BelCo does not.
However, if CheckCo was required to pay
BelCo in pelletised iron ore, BelCo would also have a mining project interest
under subsection (1).
15‑10
Iron ore mining project interests to be kept separate
If, apart from this section, a mining
project interest would relate to both iron ore and *taxable resources other than iron ore,
treat the interest as:
(a) a mining project interest relating
to iron ore; and
(b) another mining project interest
relating to taxable resources other than iron ore.
15‑15
Meaning of production right
(1) A production right is:
(a) an authority or right (however
described) under an *Australian
law to extract a *taxable
resource from a particular area in *Australia; or
(b) if an authority or right (however
described) under an Australian law is not required to extract a taxable
resource from a particular area—an interest in an area in *Australia that
allows a person to extract a taxable resource from the area.
Examples: The following are some examples of production
rights:
(a) a mining lease;
(b) a mining lease subject to environmental approval;
(c) a mining licence.
(2) However, an *exploration right is not a production
right.
Note: An exploration right may give rise to a pre‑mining
project interest: see section 70‑25.
15‑20
Meaning of project area
The project area for a
mining project interest is so much of the area covered by a *production right
as is:
(a) for a mining project interest arising
under subsection 15‑5(1)—the area to which the *mining venture mentioned in that
subsection relates; or
(b) for a mining project interest arising
under subsection 15‑5(4)—the area to which the entitlement giving rise to the
mining project interest relates.
Note: The project area for a mining project interest
may also be, or be part of, the project area for another mining project
interest.
Division 20—Taxable resources
Guide to Division 20
20‑1
What this Division is about
The concept of a taxable resource is
central to whether an entity has a mining project interest, and to the other
concepts (such as mining profits) that govern an entity’s MRRT liabilities.
Table of sections
Operative provisions
20‑5 What are taxable
resources
Operative provisions
20‑5 What
are taxable resources
(1) A taxable resource is a
quantity of any of the following:
(a) iron ore;
(b) coal;
(c) anything produced from a process
that results in iron ore or coal being consumed or destroyed without
extraction;
(d) coal seam gas extracted as a
necessary incident of mining coal.
Example: Gas extracted on an ongoing basis from a coal
mine, or a proposed coal mine (if it is not extracted as part of a separate
commercial operation) in order to comply with engineering requirements, mine safety
laws or environmental conditions would be a taxable resource because its
extraction is a necessary incident of mining the coal.
Gas extracted before coal mining begins as
part of an independent commercial operation would not be a taxable resource because
its extraction would not be a necessary incident of coal mining. Instead, that
gas would be subject to taxation under the Petroleum Resource Rent Tax
Assessment Act 1987.
(2) In deciding whether something is a taxable
resource, disregard:
(a) the use to which it is or will be
put; and
(b) what is or will be produced from
it after extraction.
(3) A quantity of a thing may be a taxable
resource even if its extent is not known (for example, before it is
extracted).
Part 2‑3—Mining profits
Division 25—Mining profits
Guide to Division 25
25‑1
What this Division is about
A miner’s mining profit is a component
of its MRRT liability for a mining project interest for an MRRT year. It is the
excess of mining revenue over mining expenditure for the interest for the year.
Table of sections
Operative provisions
25‑5 How to work out the mining profit for a mining project interest
Operative provisions
25‑5
How to work out the mining profit for a mining project interest
Work out a miner’s mining profit
for a mining project interest for an *MRRT year as follows:
Method statement
Step 1. Work out the miner’s *mining revenue for
the mining project interest for the *MRRT year.
Note: For
the mining revenue, see Division 30.
Step 2. Work out the miner’s *mining expenditure
for the mining project interest for the *MRRT year.
Note: For
the mining expenditure, see Division 35.
Step 3. If the *mining revenue
exceeds the *mining
expenditure, the difference is the miner’s mining profit for the mining
project interest for the *MRRT year.
Step 4. If the *mining revenue
does not exceed the *mining
expenditure, the miner’s mining profit for the mining project
interest for the *MRRT
year is zero.
Note: Mining
expenditure that exceeds mining revenue is a mining loss that may be applied in
working out a mining loss allowance (see Part 3‑4) or a transferred mining
loss allowance (see Part 3‑7).
Division 30—Mining revenue
Table of Subdivisions
Guide to Division 30
30‑A A miner’s mining revenue
30‑B Revenue from supply, export or use of taxable
resources
30‑C Other revenue
30‑D Miscellaneous
Guide to Division 30
30‑1
What this Division is about
A miner’s mining revenue for a mining
project interest may consist of revenue from:
(a) taxable
resources extracted from the project area for the mining project interest, to
the extent that the revenue is reasonably attributable to the taxable resources
in the form and place they were in when they were at their valuation point; and
(b) recoupment of
mining expenditure relating to the mining project interest; and
(c) compensation
for loss of taxable resources for the mining project interest; and
(d) amounts for
supply of taxable resources if the amounts are not attributable to particular
taxable resources.
Subdivision 30‑A—A miner’s mining revenue
Table of sections
30‑5 A miner’s mining
revenue
30‑5 A
miner’s mining revenue
A miner’s mining revenue
for a mining project interest that the miner has, for an *MRRT year, is the
sum of all the amounts that, under this Act, are included in the miner’s mining
revenue for that interest for that year.
Note: Most of the amounts are covered by this
Division. However, the following amounts may also be included in a miner’s
mining revenue:
(a) amounts that are in effect recoupment of the value of
starting base assets (see section 90‑65);
(b) amounts arising as a result of adjustments to take
account of changes in circumstances (see Division 160);
(c) amounts arising as a result of balancing adjustment
events for starting base assets (see Division 165).
Subdivision 30‑B—Revenue from supply, export or use of taxable resources
Table of sections
30‑10 When amounts from taxable resources etc.
are included in mining revenue
30‑15 Meaning of mining revenue event
30‑20 Meaning of initial
supply
30‑25 Working out amounts to be included
30‑30 Meaning of arm’s
length consideration
30‑35 When supplies are made
30‑10
When amounts from taxable resources etc. are included in mining revenue
An amount is included in a miner’s mining
revenue for a mining project interest for an *MRRT year if:
(a) a *taxable resource has been extracted from
the *project
area for the mining project interest; and
(b) during the year, a *mining revenue
event happens in relation to the taxable resource.
30‑15
Meaning of mining revenue event
(1) A mining revenue event
happens in relation to a *taxable resource extracted from the *project area for a mining project
interest if the miner who has the interest:
(a) makes an *initial supply of the taxable
resource, but not after its exportation from *Australia; or
(b) exports the taxable resource from
Australia, but not after paragraph (a) has applied to the taxable
resource; or
(c) makes an initial supply of or
uses, or exports from Australia, something produced using the taxable resource,
but not after paragraph (a) or (b), or this paragraph, has already applied
in relation to the taxable resource.
Note: There is a mining revenue event (but only one)
in relation to each quantity of taxable resource.
(2) However, a mining revenue event
does not happen for use of a thing produced using a *taxable resource, to the extent
that:
(a) the use takes place in the course
of operations or activities of a kind mentioned in paragraph 35‑20(1)(a) for
the mining project interest; and
(b) those operations or activities do
not involve doing anything to, or with, other taxable resources extracted from
the *project
area for the interest after those other taxable resources reach the form and
location they are in when a mining revenue event happens in relation to them;
and
(c) the use does not give rise to:
(i) an amount of *mining expenditure
for the miner; or
(ii) an amount that is
taken into account for the miner under step 2 of the method statement in
section 30‑25; or
(iii) an amount that is
taken into account for the miner under step 3 of the method statement in
section 175‑25 (alternative valuation method).
30‑20
Meaning of initial supply
(1) An initial supply of a *taxable resource,
or something produced using a taxable resource, is the first *supply of the
taxable resource or thing a miner makes, disregarding a supply covered by subsection (2).
(2) However, a *supply of a *taxable resource, or something produced
using such a taxable resource, is not an initial supply if:
(a) the supply is made between *entities in the
course of a *mining
venture in relation to which each of the entities has a mining project
interest; or
(b) the supply does not result in a
change in the ownership of the taxable resource or the thing produced using
such a taxable resource.
30‑25
Working out amounts to be included
(1) Work out the amount to be included under
section 30‑10, in relation to a *mining revenue event that happens in relation to a
*taxable
resource, as follows:
Method statement
Step 1. Work out under subsection (2)
the revenue amount for the *mining revenue event.
Step 2. Using the method that
satisfies subsection (3), work out how much of that revenue amount is
reasonably attributable to the *taxable resource:
(a) in the form
in which it existed when it was at its *valuation point; and
(b) at the place
where it was located when it was at its valuation point.
The amount worked
out under this step is the amount to be included under section 30‑10.
Revenue amount
(2) The revenue amount mentioned in step 1 of
the method statement in subsection (1) is:
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Working out the revenue
amount
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Item
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Column 1
If the amount to be included relates to ...
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Column 2
Then the revenue amount is ...
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1
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A *supply of the *taxable resource, or a thing produced using the taxable
resource
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The consideration received or receivable for the supply
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2
|
An exportation from *Australia of the *taxable
resource, or a thing produced using the taxable resource
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What would be the *arm’s length consideration for a *supply of the
taxable resource or thing at the time and place the taxable resource or thing
is loaded for export
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3
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Use of a thing produced from the *taxable resource
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What would be the *arm’s length consideration for a *supply of the
thing at the time and place of the use.
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Note: Supplies covered by item 1 of the table
that are not at arm’s length may, in appropriate cases, attract the operation
of Division 205 (anti‑profit shifting).
(3) The method to use in step 2 of the method
statement in subsection (1) is the one that produces the most appropriate
and reliable measure of how much of the revenue amount is reasonably
attributable as mentioned in that step, having regard to:
(a) the miner’s circumstances,
including, but not limited to, the functions performed, assets used, and risks
borne by the miner in carrying on its *mining operations, *transformative operations and *resource marketing
operations for the mining project interest; and
(b) the available information.
(4) In using the method that satisfies subsection (3),
make the following assumptions, to the extent that they are relevant to that
method:
(a) that a distinct and separate *entity (the notional
downstream entity) does all the things (including using all the assets)
that the miner actually does in carrying on the *downstream mining operations, *transformative
operations and *resource
marketing operations for the mining project interest;
(b) that the notional downstream
entity does not acquire an interest in the *taxable resource;
(c) that the miner and the notional
downstream entity deal wholly independently with one another;
(d) that:
(i) there is a market for
what the notional downstream entity is assumed by paragraph (a) to do; and
(ii) that market is
competitive in the sense that the returns to the notional downstream entity
would be no more or less than are necessary for it to commit capital, and in
particular are commensurate with the non‑diversifiable risks inherent in the
things it does.
(5) Without limiting subsection (3), a
miner is taken for the purposes of step 2 in the method statement in subsection (1)
to use the method that satisfies subsection (3) if the miner works out how
much of the revenue amount is reasonably attributable as mentioned in that step
by:
(a) reducing the revenue amount by an
amount that, having regard to the matters mentioned in paragraphs (3)(a)
and (b), is sufficient for a notional downstream entity to recover the following
costs relating to what it is assumed by subsection (4) to do:
(i) any operating costs;
(ii) any depreciation of
the assets that the notional downstream entity is taken to have used;
(iii) a cost of capital
sufficient to justify the continued commitment of the capital; and
(b) adding back to the revenue amount
so much (if any) of the costs mentioned in paragraph (a) of this
subsection as relate to things done to the extent that they were not taken into
account in the revenue amount.
However, the costs mentioned in paragraph (a) of this
subsection only include costs to the extent that they reasonably relate to the *taxable resource
in relation to which the *mining revenue event happens.
Meaning of transformative operations
(6) Operations or activities are transformative
operations, for a mining project interest, to the extent that the operations
or activities:
(a) are operations or activities of a
kind mentioned in paragraph 35‑20(1)(a) for the mining project interest; and
(b) involve doing something to, or
with, the *taxable
resources after they reach the form and location they are in when they are
first applied to producing something in relation to which a *mining revenue
event of a kind mentioned in paragraph 30‑15(1)(c) happens; and
(c) do not involve doing anything to,
or with, those taxable resources after they reach the form and location they
are in when that mining revenue event happens.
Meaning of resource marketing operations
(7) Operations or activities are resource
marketing operations, for a mining project interest, to the extent that
the operations or activities involve marketing, selling, shipping or delivering
of *taxable
resources in relation to which a *mining revenue event happens.
30‑30
Meaning of arm’s length consideration
(1) The arm’s length consideration
for a *supply
is the amount that would reasonably be expected to be received or receivable by
the miner as consideration for the supply if:
(a) the miner made the supply under an
agreement between the miner and another *entity; and
(b) they were dealing wholly
independently with one another in relation to the supply.
(2) The method used to determine that amount
is to be the method that produces the most appropriate and reliable measure of
that amount having regard to:
(a) the miner’s circumstances,
including, but not limited to, the functions performed, assets used, and risks
borne by the miner in carrying on its *mining operations, *transformative operations and *resource marketing
operations for the mining project interest; and
(b) the available information.
(3) However, if it is not possible to work
out the arm’s length consideration in accordance with subsections (1) and
(2), the arm’s length consideration for a *supply is the amount that is, in
the Commissioner’s opinion, fair and reasonable.
30‑35
When supplies are made
Treat the time when a miner makes a *supply for the
purposes of this Act as the earliest of the following:
(a) when consideration for the supply
is received or becomes receivable;
(b) when what is being supplied is
delivered;
(c) when ownership of what is being
supplied passes.
Subdivision 30‑C—Other revenue
Table of sections
30‑40 Recoupment or offsetting of mining
expenditure
30‑45 Recoupment of payments that give rise to
royalty credits
30‑50 Compensation for loss of taxable
resources
30‑55 Amounts that do not relate to a
particular mining revenue event
30‑40
Recoupment or offsetting of mining expenditure
(1) An amount is included in a miner’s *mining revenue for
a mining project interest for an *MRRT year to the extent that:
(a) during the year, the amount is
received, or becomes receivable, by any of the following *entities:
(i) the miner;
(ii) an entity *connected with the
miner;
(iii) an *affiliate of the
miner;
(iv) an entity of which the
miner is an affiliate;
(v) an affiliate of an
entity covered by subparagraph (ii);
(vi) an entity connected
with an entity covered by subparagraph (ii), (iii) or (iv); and
(b) payment of the amount has, or
would have, the purpose or effect of *recouping or offsetting some or all of an amount
of expenditure (including future expenditure); and
(c) the amount does not give rise to
an adjustment under Division 160 (adjustments for changes in
circumstances).
Example: In the 2012‑13 MRRT year, a miner receives a
subsidy for employing apprentices. In the 2013‑14 MRRT year, the miner incurs
mining expenditure for the relevant mining project interest in the form of
wages paid to the apprentices.
To the extent that the subsidy offsets
those wages, it is included in the miner’s mining revenue for the mining
project interest for the 2012‑13 MRRT year.
(2) However, that amount is reduced (if
necessary) to reflect the proportion of the amount of expenditure mentioned in paragraph (1)(b)
that is, or will be, included in *mining expenditure for the mining project interest.
30‑45
Recoupment of payments that give rise to royalty credits
An amount is included in a miner’s *mining revenue for
a mining project interest for an *MRRT year if the amount is an excess royalty recoupment
mentioned in subsection 60‑30(2) for the interest.
Note: Royalty recoupments are generally applied to
reduce royalty credits under section 60‑30. However, if there are
insufficient royalty credits the excess is mining revenue under this section.
30‑50
Compensation for loss of taxable resources
(1) An amount is included in a miner’s *mining revenue for
a mining project interest for an *MRRT year to the extent that:
(a) during the year, the amount is
received, or becomes receivable, by any of the following *entities:
(i) the miner;
(ii) an entity *connected with the
miner;
(iii) an *affiliate of the
miner;
(iv) an entity of which the
miner is an affiliate;
(v) an affiliate of an
entity covered by subparagraph (ii);
(vi) an entity connected
with an entity covered by subparagraph (ii), (iii) or (iv); and
(b) the amount is by way of insurance,
compensation or indemnity relating to loss of, destruction of or damage that:
(i) happens to a *taxable resource
extracted from the *project
area for the mining project interest, or to a thing produced using such a
taxable resource; and
(ii) happens before a *mining revenue
event happens in relation to the taxable resource; and
(c) the amount is reasonably
attributable to the taxable resource, as mentioned in step 2 of the method
statement in subsection 30‑25(1).
(2) Work out the extent to which the amount
is reasonably attributable to the *taxable resource as so mentioned by applying section 30‑25
as if the amount were a revenue amount under subsection 30‑25(2).
30‑55
Amounts that do not relate to a particular mining revenue event
An amount is included in a miner’s *mining revenue for
a mining project interest for an *MRRT year to the extent that:
(a) during the year, the amount is
received, or becomes receivable, by the miner; and
(b) the amount is received, or becomes
receivable, for a *supply,
or a proposed supply, of *taxable resources; and
(c) the amount does not relate to a
particular *mining
revenue event.
Subdivision 30‑D—Miscellaneous
Table of sections
30‑60 No double counting
30‑65 Expenditure incurred in causing amounts
to be received etc.
30‑70 Amounts taken to be received
30‑75 GST and increasing adjustments
30‑60
No double counting
If 2 or more provisions of this Act
include the same amount in a miner’s *mining revenue (whether for the same *MRRT year or
different MRRT years), the amount is included only under the provision that is
most appropriate.
30‑65
Expenditure incurred in causing amounts to be received etc.
An amount that, under Subdivision 30‑B
or 30‑C, is to be included in a miner’s *mining revenue for a mining project
interest for an *MRRT
year is reduced to the extent that:
(a) the miner necessarily incurred any
expenditure in enforcing the miner’s entitlement to receive the amount; and
(b) the expenditure does not relate to
any other amount; and
(c) the expenditure was not *mining expenditure
for the mining project interest; and
(d) the expenditure was not *excluded
expenditure.
Note: This section ensures that the costs associated
with mining revenue, but not dealt with under Division 35, are taken into
account.
Example: If a miner undertakes litigation to receive
compensation for damage to the miner’s taxable resources, the amount included
in the miner’s mining revenue under section 30‑50 would be reduced under
this section to take account of the miner’s litigation costs.
30‑70
Amounts taken to be received
For the purposes of the *MRRT law, an
amount that is not actually to be paid over to a miner is taken to be received
by the miner if it is, and when it is, applied or otherwise dealt with on behalf
of the miner or as the miner directs.
30‑75
GST and increasing adjustments
An amount that, under this Division, is
to be included in the miner’s *mining revenue does not include:
(a) any *GST payable on a *supply for which the amount is the
consideration, or part of the consideration; or
(b) any *increasing adjustments that relate to
such a supply.
Division 35—Mining expenditure
Table of Subdivisions
Guide to Division 35
35‑A A miner’s mining expenditure
35‑B Excluded expenditure
Guide to Division 35
35‑1
What this Division is about
A miner’s mining expenditure for a
mining project interest includes expenditure necessarily incurred in carrying
on mining operations upstream of the valuation point.
However, some expenditure is
specifically excluded.
Note: For pre‑mining expenditure, see section 70‑35.
Subdivision 35‑A—A miner’s mining expenditure
Table of sections
35‑5 A miner’s mining
expenditure
35‑10 General expenditure
35‑15 Meaning of upstream
mining operations
35‑20 Meaning of mining
operations
35‑25 No double counting
35‑5 A
miner’s mining expenditure
(1) A miner’s mining expenditure
for a mining project interest that the miner has, for an *MRRT year, is the
sum of all the amounts that, under this Act, are included in the miner’s mining
expenditure for that interest for that year.
Note: Most of the amounts are covered by this
Division. However, amounts arising as a result of adjustments to take account
of changes in circumstances may also be included in a miner’s mining
expenditure (see Division 160).
(2) However, an amount is not included in the
miner’s mining expenditure for the mining project interest for
the *MRRT
year to the extent that it is *excluded expenditure.
Note: For excluded expenditure, see
Subdivision 35‑B.
35‑10
General expenditure
(1) An amount of expenditure is included in a
miner’s *mining
expenditure for a mining project interest for an *MRRT year to the extent that the miner
necessarily incurred the amount, in that year, in the carrying on (by the miner
or another *entity)
of *upstream
mining operations for the mining project interest.
(2) The expenditure may be of either a
capital or revenue nature.
35‑15
Meaning of upstream mining operations
*Mining operations for a mining project interest
are upstream mining operations for the mining project interest to
the extent the operations:
(a) are operations or activities of a
kind mentioned in paragraph 35‑20(1)(a) for the mining project interest; and
(b) do not involve doing anything to,
or with, the *taxable
resources extracted from the *project area for the mining project interest after those
taxable resources reach their *valuation point.
Examples: The following are some examples of operations or
activities that might be upstream mining operations:
(a) obtaining the agreement of native title holders as
part of the process of obtaining a production right over the project area;
(b) exploring for taxable resources in the project area;
(c) crushing and weighing the taxable resources before
they reach their valuation point;
(d) training, engaging, employing, paying, accommodating
and ensuring the safety of personnel, and other supportive head office
activities, to the extent they are involved in operations or activities
relating to getting the taxable resource to the valuation point;
(e) developing plans and engineering specifications for,
and constructing, facilities (whether in the project area or not) to be used in
recovering, transporting and storing the taxable resources before they reach
their valuation point;
(f) acquiring and maintaining plant or equipment for use
in recovering, transporting or storing the taxable resources before they reach
their valuation point;
(g) upgrading computer software used to control inventory
(like consumables and spare parts) used for recovering, transporting or storing
the taxable resources before they reach their valuation point;
(h) rehabilitation of a project area from damage caused by
activities relating to the exploration, extraction and movement of taxable
resources to the valuation point.
Note: For downstream mining operations,
see section 255‑15.
35‑20
Meaning of mining operations
(1) Operations or activities are mining
operations, for a mining project interest, to the extent that the
operations or activities:
(a) are preliminary or integral to, or
consequential upon:
(i) extracting or
producing *taxable
resources from the *project
area for the mining project interest; or
(ii) producing something
using those taxable resources; but
(b) do not involve doing anything to,
or with, those taxable resources after they reach the form and location they
are in when:
(i) a *mining revenue
event of a kind mentioned in paragraph 30‑15(1)(a) or (b) happens in relation
to them; or
(ii) they are first applied
to producing something in relation to which a mining revenue event of a kind
mentioned in paragraph 30‑15(1)(c) happens.
(2) Without limiting subsection (1), the
following activities are mining operations for a mining project
interest:
(a) *exploration or prospecting for *taxable resources
in the *project
area for the mining project interest;
(b) extracting taxable resources from
the project area;
(c) doing anything to, or with,
taxable resources extracted or produced from the project area before they reach
the form and location they are in when a *mining revenue event happens in relation
to them;
(d) obtaining access to the project
area for any of the other activities mentioned in this subsection (other
than paragraph (h));
(e) acquiring, constructing or
maintaining anything to be used, or reasonably expected to be used, for any of
the activities mentioned in any of paragraphs (a) to (d) (even if no such
activity is happening at the time the acquisition, construction or maintenance
happens);
(f) rehabilitating the project area,
or any other land affected by any activity mentioned in any of paragraphs (a)
to (e);
(g) closing down any activity
mentioned in any of paragraphs (a) to (f);
(h) any activity done in furtherance
of an activity mentioned in any of paragraphs (a) to (g).
35‑25
No double counting
If 2 or more provisions of this Act
include the same amount in a miner’s *mining expenditure (whether for the same *MRRT year or a
different MRRT year), the amount is included only under the provision that is
most appropriate.
Subdivision 35‑B—Excluded expenditure
Table of sections
35‑35 Cost of acquiring rights and interests in
projects
35‑40 Royalties
35‑45 Meanings of mining
royalty and private mining royalty
35‑50 Financing costs
35‑55 Hire purchase agreements
35‑60 Non‑adjacent land and buildings used in
administrative or accounting activities
35‑65 Hedging or foreign exchange arrangements
35‑70 Rehabilitation bond and trust payments
35‑75 Payments of income tax or GST
35‑35
Cost of acquiring rights and interests in projects
(1) An amount of expenditure is excluded
expenditure to the extent that it relates to acquiring, or acquiring an
interest in, a *production
right covering an area, unless the expenditure is in relation to the grant of
the production right.
(2) An amount of expenditure is excluded
expenditure to the extent that it relates to acquiring a mining project
interest.
(3) An amount of expenditure is excluded
expenditure to the extent that it relates to acquiring an interest in
profits, receipts or expenditures of, or relating to, a mining project interest.
35‑40
Royalties
(1) An amount of expenditure is excluded
expenditure to the extent that it is any of the following:
(a) a *mining royalty;
(b) a *private mining royalty;
(c) a payment that gives rise to a *royalty credit
under paragraph 60‑20(1)(b) (payments by way of recoupment for mining
royalties).
(2) Despite subsection (1), a *private mining
royalty is not excluded expenditure, to the extent that:
(a) it is paid to an *entity as
consideration for the entity performing services that form part of *upstream mining
operations for a mining project interest; and
(b) it does not represent a share of
the profits made from a *mining venture relating to the mining project interest.
(3) Despite subsection (1), a *private mining
royalty is not excluded expenditure to the extent that it is paid
to an entity under an agreement entered into with the entity:
(a) before 2 May 2010; and
(b) at a time when the entity is an
STB (within the meaning of Division 1AB of Part III of the Income
Tax Assessment Act 1936) other than an *excluded STB.
(4) Despite subsection (1), a *private mining
royalty is not excluded expenditure, to the extent that it is by
way of consideration for the carrying on of *mining operations in the *project area for a
mining project interest, if it is paid:
(a) to a native title holder (within
the meaning of the Native Title Act 1993) whose approved determination
of native title (within the meaning of that Act) relates to the project area
for the mining project interest; or
(b) to a registered native title
claimant (within the meaning of the Native Title Act 1993) whose
claimant application (within the meaning of that Act) relates to the project
area for the mining project interest; or
(c) to a person who holds a right
that:
(i) arises under another *Australian law
dealing with the rights of *Aboriginal persons or *Torres Strait Islanders in relation to
land or waters; and
(ii) relates to the project
area for the mining project interest.
(5) To the extent a *private mining royalty is not *excluded
expenditure because of subsection (3) or (4), it is not excluded
expenditure under section 35‑35.
35‑45
Meanings of mining royalty and private mining royalty
(1) An amount of expenditure is a mining
royalty to the extent the expenditure:
(a) is made in relation to a *taxable resource
extracted under authority of a *production right; and
(b) is made under a *Commonwealth law,
a *State law
or a *Territory
law; and
(c) either:
(i) is a *royalty; or
(ii) would be a royalty, if
the taxable resource were owned by the Commonwealth, State or Territory (as the
case requires) just before the recovery of the resource.
Note: Subparagraph (1)(c)(ii) covers a case
where an amount is payable under an Australian law in relation to minerals
owned by private landowners.
(2) An amount of expenditure is a private
mining royalty if:
(a) it is:
(i) a *taxable resource
or a quantity of something produced using a taxable resource; or
(ii) calculated by
reference to a taxable resource or a quantity of something produced using a
taxable resource; or
(iii) calculated by
reference to the gross or net value of a taxable resource or something produced
using a taxable resource; or
(iv) calculated by reference
to the revenue, expenditure or profits made or incurred by an *entity in relation
to a taxable resource or a quantity of something produced using a taxable
resource; and
(b) it is not a *mining royalty.
35‑50
Financing costs
An amount of expenditure is excluded
expenditure to the extent that it relates to:
(a) an *arrangement that gives rise to a *financial
arrangement; or
(b) an *equity interest that is a financial
arrangement; or
(c) a *scheme that gives rise to an equity
interest issued by the miner.
Examples:
(a) borrowing costs, exit fees or interest payments
relating to a loan, or repayments of principal; and
(b) payments of dividends or payments for buying back or
cancelling shares.
35‑55
Hire purchase agreements
(1) An amount of expenditure is excluded
expenditure to the extent that it relates to a *hire purchase agreement.
(2) However, if an amount of expenditure is
excluded expenditure for a miner under subsection (1) in relation to a *hire purchase
agreement:
(a) the miner is taken to have
incurred the amount mentioned in subsection (3) at the earliest time at
which the property is *supplied to the miner under the agreement; and
(b) the miner is taken to have
acquired the property for that amount at the time the amount is incurred; and
(c) the amount is not excluded
expenditure under subsection (1) or section 35‑50.
(3) For the purposes of paragraph (2)(a),
the amount is:
(a) if an amount is stated to be the
cost or value of the property for the purposes of the agreement, and the miner
and the hirer were dealing with each other at *arm’s length in connection with the
agreement—the amount so stated; or
(b) otherwise—the amount that could
reasonably have been expected to have been paid by the miner for the purchase
of the property if:
(i) the hirer had actually
sold the property to the miner at the start of the agreement; and
(ii) the hirer and the
miner were dealing with each other at arm’s length in connection with the sale.
Note: The amount may be mining expenditure under
this Division.
35‑60
Non‑adjacent land and buildings used in administrative or accounting activities
An amount of expenditure is excluded
expenditure to the extent that:
(a) it relates to land or buildings
that are not located at or adjacent to the *project area for a mining project
interest that the miner has; and
(b) the land or buildings are for use
in connection with administrative or accounting activities; and
(c) the expenditure is of a capital
nature.
35‑65
Hedging or foreign exchange arrangements
An amount of expenditure is excluded
expenditure to the extent that it relates to:
(a) a *derivative financial arrangement; or
(b) a *foreign currency hedge.
35‑70
Rehabilitation bond and trust payments
(1) An amount of expenditure is excluded
expenditure to the extent that it is provided as security (however
described) for rehabilitation of the *project area for a mining project interest.
(2) An amount of expenditure that is incurred
by a trustee or bondholder out of an amount provided as security as mentioned
in subsection (1) is taken to have been incurred by a miner in relation to
a mining project interest to the extent that:
(a) the amount is for rehabilitation
of an area; and
(b) the area is the *project area for
the mining project interest the miner has at the time the amount is incurred;
and
(c) if more than one miner has a
mining project interest in relation to that project area at that time—the
rehabilitation reasonably relates to the mining project interest.
Note: The trustee or bondholder is required to give
the miner the information it needs to determine the extent, if any, to which
the amount is mining expenditure for the miner: see Division 121 in
Schedule 1 to the Taxation Administration Act 1953.
35‑75
Payments of income tax or GST
An amount of expenditure is excluded
expenditure to the extent that it is:
(a) tax payable under the Income
Tax Assessment Act 1936, or the Income Tax Assessment Act 1997; or
(b) *GST; or
(c) an amount relating to:
(i) an *input tax credit
to which the miner is entitled; or
(ii) a *decreasing
adjustment that the miner has; or
(d) an amount of penalty or interest
payable under a *taxation
law.
Division 40—Valuation point
Guide to Division 40
40‑1
What this Division is about
The concept of the valuation point is
central to determining the revenue and expenditure that make up mining profit.
The valuation point is a defined point
in the extractive process.
Table of sections
Operative provisions
40‑5 Meaning of valuation
point
Operative provisions
40‑5
Meaning of valuation point
Resource is stored on run‑of‑mine stockpile
(1) The valuation point for a *taxable resource
is the point just before the resource is removed from the run‑of‑mine stockpile
on which it is stored.
Resource is not stored on run‑of‑mine stockpile
(2) The valuation point for a *taxable resource
that is not stored on a run‑of‑mine stockpile is:
(a) if the resource is moved away from
the immediate point of extraction to a place, at or adjacent to the point of
extraction, where the resource enters the first beneficiation process after
extraction—the point at which the resource enters that beneficiation process;
or
(b) if paragraph (a) does not
apply—the point at which the resource is first moved away from the immediate
point of extraction.
Resource is in gaseous state
(3) However, the valuation point
for a *taxable
resource that is in a gaseous state at the point mentioned in subsection (2)
is the first point at which the gaseous resource exits a wellhead.
Exception where supply happens first
(4) Despite subsections (1), (2) and
(3), the valuation point for a *taxable resource is instead the point
just before the *initial
supply of the resource, if the time the resource is at that point is before the
time it would be at the valuation point for the resource under subsection (1),
(2) or (3).
Example: If, under an agreement, a resource is supplied to
another party when the resource is delivered to the run‑of‑mine stockpile, the valuation
point is just before the resource is delivered to the stockpile.
Part 2‑4—Low profit offsets
Division 45—Low profit offsets
Guide to Division 45
45‑1
What this Division is about
A miner is entitled to an offset for
an MRRT year if the miner’s group mining profit for the year is less than $100
million.
If that profit is less than or equal
to $50 million, an offset reduces the amount of MRRT the miner must pay for the
year to nil.
An offset phases out between profits
of $50 million and $100 million, so that the miner is not immediately subjected
to a full MRRT liability when the miner’s group profit exceeds $50 million.
Table of sections
Operative provisions
45‑5 Low profit offset—profits not greater
than $50 million
45‑10 Low profit offset—profits greater than
$50 million and less than $100 million
Operative provisions
45‑5
Low profit offset—profits not greater than $50 million
(1) A miner has an offset for an *MRRT year if the
sum of the *mining
profits (the miner’s group mining profit) for the year of each
mining project interest of the following *entities is less than or equal to $50
million:
(a) the miner;
(b) an entity *connected with the miner;
(c) an *affiliate of the miner;
(d) an entity of which the miner is an
affiliate;
(e) an affiliate of an entity covered
by paragraph (b);
(f) an entity connected with an entity
covered by paragraph (b), (c) or (d).
Note 1: An offset under this section reduces the amount
of MRRT that a miner must pay for an MRRT year: see section 10‑15.
Note 2: If the MRRT year is not a 12‑month period, the
miner’s group mining profit is affected by section 190‑20 (substituted
accounting periods).
(2) The amount of the miner’s offset for the *MRRT year is the
sum of the miner’s *MRRT
liabilities for each of the miner’s mining project interests for the year.
45‑10
Low profit offset—profits greater than $50 million and less than $100 million
(1) A miner with a group mining profit
greater than $50 million and less than $100 million for an *MRRT year has an
offset for that year if the amount worked out using the following formula is
greater than zero:
where:
miner’s group MRRT allowances is the sum of
the *MRRT
allowances for each mining project interest for the year that an *entity mentioned
in subsection 45‑5(1) has.
miner’s share of group mining profit is the
sum of the miner’s *mining
profit for each of its mining project interests for the year, divided by the
miner’s group mining profit for the year.
taper amount is the difference between the
miner’s group mining profit for the year and $50 million.
Note 1: An offset under this section reduces the amount
of MRRT that a miner must pay for an MRRT year: see section 10‑15.
Note 2: If the MRRT year is not a 12‑month period, the
miner’s group MRRT allowances and the miner’s share of group mining profit are
affected by section 190‑20 (substituted accounting periods).
(2) The amount of the miner’s offset for the *MRRT year is the
amount worked out using the formula in subsection (1), multiplied by the *MRRT rate.
Example: For the 2013‑14 MRRT year, Pinder Mines Ltd has a
total mining profit of $60 million, a group mining profit of $80 million, group
MRRT allowances of $5 million and a taper amount of $30 million ($80 million ‑
$50 million). The amount worked out using the formula in subsection (1) is
$11.25 million:(($50 million ‑ $30 million ‑ $5 million) × 3/4 ). Multiplying this amount by the MRRT rate
gives Pinder Mines Ltd an offset for the year of $2.53 million.
Part 2‑5—Payment of MRRT
Division 50—How to work out when to pay MRRT
Guide to Division 50
50‑1
What this Division is about
Assessed MRRT that a miner is liable
to pay, and any associated interest charges, must be paid to the Commissioner
by the time provided under this Division.
Note 1: For payment of instalments, see Division 115
in Schedule 1 to the Taxation Administration Act 1953.
Note 2: For provisions about the collection and
recovery of MRRT and other tax‑related liabilities, see Part 4‑15 in
Schedule 1 to the Taxation Administration Act 1953.
Table of sections
Operative provisions
50‑5 When assessed MRRT is payable
50‑10 When shortfall interest charge is payable
50‑15 General interest charge payable on unpaid
assessed MRRT or shortfall interest charge
Operative provisions
50‑5
When assessed MRRT is payable
(1) *Assessed MRRT that a miner must pay under section 10‑20
for an *MRRT
year is due and payable on the first day of the sixth month after the end of
the MRRT year.
Example: If the miner’s MRRT year is the same as the
financial year, the assessed MRRT would be due and payable on 1 December.
Note: The Commissioner may defer the time at which
the assessed MRRT is due and payable: see section 255‑10 in Schedule 1
to the Taxation Administration Act 1953.
(2) To avoid doubt, the *assessed MRRT may
be taken to have been due and payable at a time before the *assessment was
made.
(3) If the Commissioner amends a miner’s *assessment, any
extra *assessed
MRRT resulting from the amendment is due and payable 21 days after the day on
which the Commissioner gives the miner notice of the amended assessment.
50‑10
When shortfall interest charge is payable
An amount of *shortfall interest charge that a
miner is liable to pay is due and payable 21 days after the day on which the
Commissioner gives the miner notice of the charge.
Note 1: Shortfall interest charge may be payable, on
any amount of extra assessed MRRT payable as a result of an amended assessment,
for each day in the period that:
(a) starts at the time assessed MRRT was due and payable
on the miner’s original assessment; and
(b) finishes on the day before the day on which the
Commissioner gives the miner notice of the amended assessment.
Note 2: For provisions about liability for shortfall
interest charge, see Division 280 in Schedule 1 to the Taxation
Administration Act 1953.
50‑15
General interest charge payable on unpaid assessed MRRT or shortfall interest
charge
If an amount of *assessed MRRT or *shortfall interest
charge that a miner is liable to pay remains unpaid after the time by which it
is due to be paid, the miner is liable to pay the *general interest charge on the unpaid
amount for each day in the period that:
(a) starts at the beginning of the day
on which the amount was due to be paid; and
(b) finishes at the end of the last
day on which, at the end of the day, any of the following remains unpaid:
(i) the assessed MRRT or
shortfall interest charge;
(ii) general interest
charge on any of the assessed MRRT or shortfall interest charge.
Note 1: The general interest charge is worked out under
Part IIA of the Taxation Administration Act 1953.
Note 2: Shortfall interest charge is worked out under
Division 280 in Schedule 1 to that Act.
Chapter 3—MRRT allowances
Part 3‑1—Royalty allowances
Division 60—Royalty allowances
Guide to Division 60
60‑1
What this Division is about
Mining royalties paid to the
Commonwealth, States and Territories reduce a miner’s MRRT liabilities for a
mining project interest.
To work out the royalty allowance, the
amount of the royalty is grossed‑up using the MRRT rate, in effect reducing the
MRRT liability by the amount of the royalty.
Royalty credits that are not applied
in an MRRT year are uplifted and may be able to be applied in later years.
Royalty credits are reduced if a miner
recoups an amount giving rise to a royalty credit.
Note: Royalty credits that are not applied to a
royalty allowance may be applied to transferred royalty allowances for other
mining project interests (see Division 65).
Table of sections
Operative provisions
60‑5 Objects of this Division
60‑10 When a miner has a royalty allowance
60‑15 The amount of a royalty allowance
60‑20 When a royalty credit arises
60‑25 Amount of a royalty credit
60‑30 Royalty credits reduced by recoupments
Operative provisions
60‑5
Objects of this Division
The objects of this Division are:
(a) to reduce a miner’s *MRRT liability
relating to profits relating to *taxable resources, to the extent those taxable resources
are subject to Commonwealth, State and Territory royalties; and
(b) to provide an uplift for unapplied
*royalty
credits, which compensates for:
(i) the delay where
royalty credits are applied in a later year; and
(ii) the risk that royalty
credits may not be able to be applied in a later year.
60‑10
When a miner has a royalty allowance
A miner has a royalty allowance
for a mining project interest for an *MRRT year if:
(a) the miner has a *mining profit for
the interest for the year; and
(b) one or more *royalty credits (available
royalty credits) relate to the interest.
60‑15
The amount of a royalty allowance
(1) The amount of the miner’s *royalty allowance
is so much of the sum of the available royalty credits as does not exceed the *mining profit.
(2) In working out the amount of a *royalty allowance,
available royalty credits are applied in the order in which they arise.
Note: If an available royalty credit cannot be
wholly applied in an MRRT year, the unapplied amount can be carried forward:
see section 60‑25.
60‑20
When a royalty credit arises
(1) A liability a miner incurs gives rise to
a royalty credit for a mining project interest the miner has to
the extent that the liability is to pay, in relation to a *taxable resource
extracted under the authority of the *production right to which the interest relates:
(a) a *mining royalty; or
(b) an amount to another *entity by way of *recoupment of a
liability the other entity incurs that, because of a previous application of
this section:
(i) gives rise at any time
to a royalty credit for a mining project interest the other entity has that
relates to the production right; or
(ii) would give rise to
such a royalty credit, if the other entity had a mining project interest in
relation to the production right.
Note: Sections 60‑30 and 30‑45 set out
consequences for the entity that receives a recoupment of an amount giving rise
to a royalty credit.
(2) The *royalty credit arises at the time the
miner incurs the liability, and relates to the *MRRT year in which it arises.
Note: If more than one liability satisfying this
section is incurred in an MRRT year, more than one royalty credit arises in
that year.
(3) The *royalty credit ceases to be a royalty
credit if it has been fully applied in working out any of the following:
(a) a *royalty allowance for the mining project
interest;
(b) *transferred royalty allowances for other
mining project interests.
60‑25
Amount of a royalty credit
(1) To work out the amount of the *royalty credit in
the *MRRT
year in which the royalty credit arises in relation to a liability of a miner:
(a) work out how much of the liability
gives rise to a royalty credit under section 60‑20; and
(b) divide the result by the *MRRT rate.
Note: Paragraph (b) grosses‑up the royalty
payment to an amount that will reduce the ultimate MRRT liability by the amount
of the royalty payment.
Example: A miner pays a State royalty of $22.5 million in
an MRRT year. The royalty credit in that year is:
(2) In a later *MRRT year, the amount of the *royalty credit is:
where:
previous amount of the royalty credit is the
amount of the *royalty
credit for the preceding *MRRT year.
previous application of the royalty credit is
the sum of the amounts of those parts (if any) of the *royalty credit that have been
applied in working out, for the preceding *MRRT year, any of the following:
(a) a *royalty allowance for the mining project
interest;
(b) one or more *transferred
royalty allowances for other mining project interests.
uplift factor is:
Example: A royalty credit of $100 million arises in an
MRRT year. $30 million is applied to the royalty allowance in the year the
credit arises. In the same year, $30 million is applied to a transferred
royalty allowance under Division 65. Assume the long term bond rate for
that year is 5.5%. In the next year, the amount of the royalty credit is:($100
million ‑ ($30 million + $30 million)) x (0.055 + 1.07) = $45 million.
60‑30
Royalty credits reduced by recoupments
(1) To the extent an amount that is received
or becomes receivable by a miner is by way of *recoupment of a liability that gives rise
to a *royalty
credit for a mining project interest the miner has:
(a) the amount is to be increased by
dividing it by the *MRRT
rate; and
(b) that increased amount is applied
to reduce royalty credits for the interest:
(i) in the *MRRT year in which
the amount is received or becomes receivable (the recoupment year);
and
(ii) in the order in which
the royalty credits arise; and
(iii) before applying the
royalty credits in working out a *royalty allowance or a *transferred royalty allowance for the
recoupment year.
Note: Paragraph (a) grosses‑up the recoupment
in the same way that section 60‑25 grosses‑up the liability giving rise to
the royalty credit.
(2) If the increased amount exceeds the sum
of those *royalty
credits, section 30‑45 applies to the excess (the excess royalty
recoupment) in the recoupment year.
Part 3‑2—Transferred royalty allowances
Division 65—Transferred royalty allowances
Guide to Division 65
65‑1
What this Division is about
A miner’s MRRT liability for a mining
project interest may be reduced by mining royalties, paid to the Commonwealth,
States and Territories, that relate to one or more other mining project
interests.
The interests must satisfy an
integration test from the time the royalty is incurred to the time it reduces
the MRRT liability.
Table of sections
Operative provisions
65‑5 Object of this Division
65‑10 When a miner has a transferred royalty
allowance
65‑15 The amount of a transferred royalty
allowance
65‑20 Available royalty credits
Operative provisions
65‑5
Object of this Division
The object of this Division is to enable
*royalty
credits arising in relation to a mining project interest to reduce the *MRRT liability of
certain other mining project interests, if the interests are *integrated from the
time the royalty credits arise to the end of the *MRRT year in which they are to be applied.
65‑10
When a miner has a transferred royalty allowance
A miner has a transferred royalty
allowance for a mining project interest for an *MRRT year if:
(a) there is an amount (a remaining
profit) by which the miner’s *mining profit for the interest for the year
exceeds the *royalty
allowance (if any) that the miner has for the interest for the year; and
(b) there are one or more *royalty credits (available
royalty credits) that, under section 65‑20, can be applied in
working out the transferred royalty allowance for the interest for the year.
65‑15
The amount of a transferred royalty allowance
(1) The amount of the miner’s *transferred
royalty allowance is so much of the sum of the available royalty credits as
does not exceed the remaining profit.
(2) In working out the amount of a *transferred
royalty allowance, *royalty
credits are applied in the order in which they arise, but the miner may choose
the order in which to apply royalty credits that arise at the same time.
Note: Division 119 in Schedule 1 to the Taxation
Administration Act 1953 is about choices under the MRRT law.
65‑20
Available royalty credits
(1) A *royalty credit can be applied in working
out a *transferred
royalty allowance for a mining project interest for an *MRRT year (the transfer year)
if:
(a) the mining project interest and
the mining project interest for which the royalty credit arises are *integrated at all
times in the period:
(i) starting at the time
the *royalty
credit arises; and
(ii) ending at the end of
the transfer year; and
Note 1: For when a royalty credit arises,
see section 60‑20.
Note 2: For when mining project interests are integrated,
see Division 255.
(b) the royalty credit does not relate
to an MRRT year for which there was a choice to use the alternative valuation
method under Division 175 in relation to the mining project interest for
which the royalty credit arises.
(2) However, the *royalty credit cannot be applied to the
extent it is applied in working out:
(a) a *royalty allowance; or
(b) a *transferred royalty allowance;
for another mining project interest for the year.
Part 3‑3—Pre‑mining loss allowances
Division 70—Pre‑mining loss allowances
Table of Subdivisions
Guide to Division 70
70‑A Object of this Division
70‑B When a miner has a pre‑mining loss allowance
70‑C Pre‑mining losses
70‑D Amounts of pre‑mining losses
Guide to Division 70
70‑1
What this Division is about
Pre‑mining loss allowances enable
expenditure (such as exploration expenditure) incurred during the period before
a mining project interest comes into existence to reduce a miner’s MRRT
liability for a mining project interest for an MRRT year.
Pre‑mining losses that are unapplied
at the end of the MRRT year in which they arise are uplifted and may be able to
be applied in later years.
Note: Pre‑mining losses that are not applied to a
pre‑mining loss allowance may be applied to transferred pre‑mining loss
allowances for other mining project interests (see Division 95).
Subdivision 70‑A—Object of this Division
Table of sections
70‑5 Objects of this Division
70‑5
Objects of this Division
The objects of this Division are:
(a) to recognise a miner’s net
expenditure (including exploration expenditure) incurred, before a *production right
is granted, in identifying and evaluating whether *taxable resources could be extracted from
an area; and
(b) to provide an uplift for unapplied
*pre‑mining
losses, which compensates for:
(i) the delay where pre‑mining
losses are applied in a later year; and
(ii) the risk that pre‑mining
losses may not be able to be applied in a later year.
Subdivision 70‑B—When a miner has a pre‑mining loss allowance
Table of sections
70‑10 When a miner has a pre‑mining loss
allowance
70‑15 The amount of a pre‑mining loss allowance
70‑20 Available pre‑mining losses for a pre‑mining
loss allowance
70‑25 Meaning of pre‑mining
project interest etc.
70‑10
When a miner has a pre‑mining loss allowance
A miner has a pre‑mining loss
allowance for a mining project interest for an *MRRT year if:
(a) there is an amount (a remaining
profit) by which the miner’s *mining profit for the interest for the year
exceeds the sum of all the *higher ranking allowances (if any) that the miner has for
the interest for the year; and
(b) there are one or more *pre‑mining losses
(available pre‑mining losses) that, under section 70‑20, can
be applied in working out a pre‑mining loss allowance for the interest for the
year.
70‑15
The amount of a pre‑mining loss allowance
(1) The amount of the miner’s *pre‑mining loss
allowance is so much of the sum of the available pre‑mining losses as does not
exceed the remaining profit.
Example: A miner has, for a mining project interest for an
MRRT year, a mining profit of $400 million, a royalty allowance of $200 million
and a transferred royalty allowance of $100 million. The sum of the available
pre‑mining losses for the interest for the year is $20 million.
Under section 70‑10, the miner has a
pre‑mining loss allowance for the interest for the year because the mining
profit exceeds the sum of the higher ranked allowances ($300 million), giving
the miner a remaining profit of $100 million.
Under this section, the amount of the pre‑mining
loss allowance is the sum of the available pre‑mining losses ($20 million),
because that sum does not exceed the remaining profit.
(2) In working out the amount of a *pre‑mining loss
allowance, *pre‑mining
losses are applied in the order in which they arise.
Note: If an available pre‑mining loss cannot be
wholly applied in an MRRT year, the unapplied amount can be carried forward:
see section 70‑50.
70‑20
Available pre‑mining losses for a pre‑mining loss allowance
(1) A *pre‑mining loss can be applied in working
out a *pre‑mining
loss allowance for the mining project interest for the year if the mining
project interest *originates
from the *pre‑mining
project interest to which the pre‑mining loss relates.
Note: Once a pre‑mining loss has been fully applied,
it ceases to be a pre‑mining loss (see subsection 70‑30(2)), and therefore
cannot be applied in working out a pre‑mining loss allowance.
(2) A mining project interest originates
from a *pre‑mining
project interest if:
(a) the *termination day for the pre‑mining project
interest happened; or
(b) the pre‑mining project interest
ceased to apply to the *project area, or a part of the project area, for the mining
project interest;
because the mining project interest started to apply to
the project area, or a part of the project area, for the pre‑mining project
interest.
Note: A mining project interest may originate from
more than one pre‑mining project interest.
70‑25
Meaning of pre‑mining project interest etc.
(1) A pre‑mining project interest
is an interest in an *exploration
right.
(2) However, if the *exploration right relates both to
iron ore and to other kinds of *taxable resources, treat the *pre‑mining project interest as:
(a) a pre‑mining project interest
relating to iron ore; and
(b) another pre‑mining project
interest relating to those other kinds of taxable resources.
(3) An exploration right is an
authority or right (however described) under an *Australian law for a purpose (other than
an incidental purpose) of *exploration or prospecting for *taxable resources in a particular area in
*Australia.
Examples: The following are some examples of an exploration
right:
(a) a mineral development licence;
(b) a retention lease;
(c) an exploration permit.
(4) The project area for a *pre‑mining project
interest is the area in *Australia covered by the *exploration right to which the pre‑mining
project interest relates.
Subdivision 70‑C—Pre‑mining losses
Table of sections
70‑30 Pre‑mining losses
70‑35 Meaning of pre‑mining
expenditure etc.
70‑40 Meaning of pre‑mining
revenue
70‑30
Pre‑mining losses
(1) A pre‑mining loss arises
for an *MRRT
year if:
(a) during the year, an *entity *holds a *pre‑mining project
interest; and
(b) the entity’s *pre‑mining
expenditure for the interest for the year exceeds the entity’s *pre‑mining revenue
for the interest for the year.
(2) The pre‑mining loss ceases to be a pre‑mining
loss if it has been fully applied in working out any of the following:
(a) a *pre‑mining loss allowance for a mining
project interest that *originates from the *pre‑mining project interest;
(b) *transferred pre‑mining loss allowances
for other mining project interests.
70‑35
Meaning of pre‑mining expenditure etc.
Pre‑mining expenditure
(1) An *entity’s pre‑mining expenditure,
for a *pre‑mining
project interest for an *MRRT year, is the sum of all amounts that, under this Act,
are included in the entity’s pre‑mining expenditure for the interest for the
year.
Note: Most of the amounts are covered by this
section. However, amounts arising as a result of adjustments to take account of
changes in circumstances may also be included in an entity’s pre‑mining
expenditure (see Division 160).
(2) An amount of expenditure is included in an
*entity’s *pre‑mining
expenditure for a *pre‑mining
project interest for an *MRRT year to the extent that the entity necessarily
incurred the amount in that year in carrying on *pre‑mining project operations of the
interest.
(3) The expenditure may be of either a
capital or revenue nature.
Excluded expenditure
(4) However, an amount is not included in the
*entity’s *pre‑mining
expenditure for the *pre‑mining
project interest for the *MRRT year to the extent that it:
(a) is *excluded expenditure; or
(b) would be excluded expenditure, if:
(i) the pre‑mining project
interest were a mining project interest; and
(ii) the *exploration right
to which the pre‑mining project interest relates were a *production right to which the
mining project interest relates; and
(iii) in a case where the
entity is not a miner—the entity were a miner.
Note: For excluded expenditure, see
Subdivision 35‑B.
Pre‑mining project operations
(5) Operations or activities are the pre‑mining
project operations of the *pre‑mining project interest to the extent that, if the pre‑mining
project interest were a mining project interest, the operations or activities
would be *upstream
mining operations in relation to such a mining project interest.
(6) It does not matter where, or when, the
operations or activities are carried on.
Expenditure for deferred farm‑out arrangement where no
interest transferred
(7) An amount of expenditure is included in an
*entity’s *pre‑mining
expenditure for a *pre‑mining
project interest for an *MRRT year to the extent that:
(a) another entity necessarily
incurred the amount in that MRRT year, or an earlier MRRT year, in carrying on *exploration or
prospecting for *taxable
resources in the *project
area for the pre‑mining project interest; and
(b) the exploration or prospecting was
carried on under an *arrangement
with the entity; and
(c) the terms of the arrangement gave
the other entity a right, or a contingent right, to acquire from the entity an
interest in the *exploration
right to which the pre‑mining project interest relates; and
(d) in that MRRT year, the other
entity stops having the right, without acquiring the interest in the
exploration right.
No double counting
(8) If 2 or more provisions of this Act
include the same amount in an *entity’s *pre‑mining expenditure (whether for the same *MRRT year or a
different MRRT year), the amount is included only under the provision that is
most appropriate.
(9) If:
(a) a provision of this Act includes
an amount in an *entity’s
*pre‑mining
expenditure; and
(b) the same amount is included, by
another provision of this Act, in the entity’s *mining expenditure (whether for the same *MRRT year or a
different MRRT year);
the amount is included only under the provision that is
most appropriate.
70‑40
Meaning of pre‑mining revenue
(1) An *entity’s pre‑mining revenue
for a *pre‑mining
project interest that the entity *holds, for an *MRRT year, is the sum of all amounts that, under this Act,
are included in the entity’s pre‑mining revenue for the interest for the year.
Note: Most of the amounts are covered by this
section. However, amounts arising as a result of adjustments to take account of
changes in circumstances may also be included in an entity’s pre‑mining revenue
(see Division 160).
(2) An amount is included in the *entity’s *pre‑mining revenue
for the *pre‑mining
project interest for the year if the amount would have been included in the
entity’s *mining
revenue for a mining project interest that the entity had for the year if:
(a) to the extent that the amount
related to the pre‑mining project interest, it had related to the mining project
interest; and
(b) to the extent that the amount
related to *pre‑mining
expenditure for the pre‑mining project interest, it had related to *mining expenditure
for the mining project interest.
(3) An amount that, under this section, is to
be included in the *entity’s
pre‑mining revenue does not include:
(a) any *GST payable on a *supply for which the amount is the
consideration, or part of the consideration; or
(b) any *increasing adjustments that relate to
such a supply.
Subdivision 70‑D—Amounts of pre‑mining losses
Table of sections
70‑45 Pre‑mining losses for the MRRT years in
which they arise
70‑50 Pre‑mining losses for later MRRT years
70‑45
Pre‑mining losses for the MRRT years in which they arise
In the *MRRT year in which a *pre‑mining loss arises,
the amount of the pre‑mining loss is the difference between:
(a) the *entity’s *pre‑mining expenditure, for the *pre‑mining project
interest to which the pre‑mining loss relates, for the year; and
(b) the entity’s *pre‑mining revenue
for that pre‑mining project interest for the year.
70‑50
Pre‑mining losses for later MRRT years
In a later *MRRT year, the amount of the *pre‑mining loss
is:
where:
previous amount of the loss is the amount of
the *pre‑mining
loss for the preceding *MRRT year.
previous application of the loss is the sum
of the amounts of those parts (if any) of the *pre‑mining loss that have been applied in
working out, for the preceding *MRRT year, any of the following:
(a) a *pre‑mining loss allowance for a mining
project interest that the *entity has;
(b) one or more *transferred pre‑mining
loss allowances for other mining project interests.
uplift factor is one of the following:
(a) if the later year is one of the 10
*MRRT years
after the MRRT year in which the *pre‑mining loss arose:
(b) if the later year is not one of
the 10 MRRT years after the MRRT year in which the pre‑mining loss arose:
Part 3‑4—Mining loss allowances
Division 75—Mining loss allowances
Guide to Division 75
75‑1
What this Division is about
Mining loss allowances enable mining
losses to reduce the miner’s MRRT liability for the same mining project
interest for a later MRRT year.
Mining losses that are not applied in
an MRRT year are uplifted and may be able to be applied in later years.
Note: Mining losses that are not applied to a mining
loss allowance may be applied to transferred mining loss allowances for other
mining project interests (see Division 100).
Table of sections
Operative provisions
75‑5 Objects of this Division
75‑10 When a miner has a mining loss allowance
75‑15 The amount of a mining loss allowance
75‑20 Mining losses
Operative provisions
75‑5
Objects of this Division
The objects of this Division are:
(a) to allow *mining losses of a mining project
interest to be applied in later years; and
(b) to provide an uplift for unapplied
mining losses which compensates for:
(i) the delay where mining
losses are applied in a later year; and
(ii) the risk that mining losses
may not be able to be applied in a later year.
75‑10
When a miner has a mining loss allowance
A miner has a mining loss
allowance for a mining project interest for an *MRRT year if:
(a) there is an amount (a remaining
profit) by which the miner’s *mining profit for the interest for the
year exceeds the sum of all the *higher ranking allowances (if any) that the miner has for
the interest for the year; and
(b) there are one or more *mining losses (available
mining losses) that relate to the interest.
75‑15
The amount of a mining loss allowance
(1) The amount of the miner’s *mining loss
allowance is so much of the sum of the available mining losses as does not
exceed the remaining profit.
(2) In working out the amount of a *mining loss allowance,
*mining
losses are applied in the order in which they arise.
75‑20
Mining losses
(1) A mining loss arises for a
mining project interest for an *MRRT year if the *mining expenditure for the interest for the year
exceeds the *mining
revenue for the interest for the year.
(2) In that year, the amount of the *mining loss is the
amount of the excess.
(3) In a later *MRRT year, the amount of the *mining loss is:
where:
previous amount of the loss is the amount of
the *mining loss
for the preceding *MRRT
year.
previous application of the loss is the sum
of the parts (if any) of the *mining loss that have been applied in working out, for the
preceding *MRRT
year, any of the following:
(a) a *mining loss allowance for the mining project
interest;
(b) one or more *transferred mining
loss allowances for other mining project interests.
uplift factor is:
(4) The *mining loss ceases to be a mining loss if
it has been fully applied in working out any of the following:
(a) a *mining loss allowance for the mining
project interest;
(b) *transferred mining loss allowances for
other mining project interests.
Part 3‑5—Starting base
allowances
Division 80—Starting base allowances
Table of Subdivisions
Guide to Division 80
80‑A Objects of this Division
80‑B When a miner has a starting base allowance
80‑C Starting base assets
80‑D Amounts of starting base losses
Guide to Division 80
80‑1
What this Division is about
Starting base allowances enable the
following to be taken into account in a miner’s MRRT liability for a mining
project interest for an MRRT year:
(a) investments
in assets in relation to upstream mining operations before 2 May 2010;
(b) certain
expenditure on such assets (not including expenditure to acquire rights to
resources) made by a miner between 2 May 2010 and 1 July 2012.
A starting base allowance consists of a
miner’s available starting base losses. Starting base losses reflect the
declines in value of starting base assets.
Starting base losses that are not
applied are increased by one of 2 uplift factors. Which uplift factor to use is
governed by whether a book value approach or a market value approach is applied
to valuing starting base assets.
Note 1: A starting base allowance can arise in relation
to a pre‑mining project interest from which a mining project interest
originates.
Note 2: Division 85 deals with the valuation
approaches. Division 90 deals with declines in value of starting base
assets.
Note 3: Division 165 deals with starting base
adjustments, which apply if starting base assets cease to be part of a miner’s
starting base. Division 180 allows for valuation of starting base assets
using a look‑back approach.
Subdivision 80‑A—Objects of this Division
Table of sections
80‑5 Objects of this Division
80‑5
Objects of this Division
The objects of this Division are:
(a) to:
(i) recognise the value of
mining project interests, and other assets used in *upstream mining operations, that miners
had when resource tax reforms were announced on 2 May 2010; and
(ii) ensure that
considerations relating to MRRT do not deter miners from making further
investments in assets used in upstream mining operations in the period after
that announcement and before 1 July 2012;
by reducing miners’ *MRRT liabilities
based on declines in value of those interests and assets after 1 July
2012; and
(b) to provide an uplift for unapplied
*starting
base losses which compensates for:
(i) the delay where
starting base losses are applied in a later year; and
(ii) under a book value
approach to valuation, the risk that starting base losses may not be able to be
applied in a later year.
Subdivision 80‑B—When a miner has a starting base allowance
Table of sections
80‑10 When a miner has a starting base
allowance
80‑15 The amount of a starting base allowance
80‑20 When a miner has a starting base loss
80‑10
When a miner has a starting base allowance
A miner has a starting base
allowance for a mining project interest for an *MRRT year if:
(a) there is an amount (a remaining
profit) by which the miner’s *mining profit for the interest for the
year exceeds the sum of all the *higher ranking allowances (if any) that the miner has for
the interest for the year; and
(b) there are one or more *starting base
losses (available starting base losses) that relate to the
interest.
80‑15
The amount of a starting base allowance
(1) The amount of the miner’s *starting base
allowance is so much of the sum of the miner’s available starting base losses
as does not exceed the remaining profit.
(2) In working out the amount of a *starting base
allowance, *starting
base losses are applied in the order in which they arise.
Note 1: If an available starting base loss cannot be
wholly applied in an MRRT year, the unapplied amount can be carried forward:
see section 80‑45.
Note 2: Starting base losses can be affected by
starting base adjustments under Division 165.
80‑20
When a miner has a starting base loss
(1) A starting base loss arises
for a mining project interest for an *MRRT year if at the same time during the year, the
same miner:
(a) has the mining project interest;
and
(b) *holds a *starting base asset relating to the
mining project interest.
(2) The *starting base loss ceases to be a
starting base loss if it has been fully applied in working out one or more *starting base
allowances for the mining project interest.
Subdivision 80‑C—Starting base assets
Table of sections
80‑25 Meaning of starting
base asset
80‑30 Treating starting base assets as a single
starting base asset
80‑35 Mine development expenditure may be a
starting base asset
80‑25
Meaning of starting base asset
(1) Property, or a legal or equitable right
that is not property, is a starting base asset relating to a
mining project interest if at the time mentioned in subsection (2), the
property or right was:
(a) being used; or
(b) *installed ready for use; or
(c) being constructed for use;
in carrying on *upstream mining operations relating to a mining project
interest that a miner had at that time.
Note: Division 165 provides for a starting base
adjustment if a starting base asset ceases to be used, or installed ready for
use, in a project, or construction of the asset stops.
(2) The time (start time) is
the later of:
(a) the start of 1 July 2012; and
(b) the start of the day on which
production (other than incidental production) of *taxable resources commences from the *project area for
the mining project interest.
(3) However:
(a) if, under Division 85, the
book value approach is the valuation approach for the mining project interest,
the following are not starting base assets:
(i) rights and interests
constituting the mining project interest;
(ii) *mining, quarrying
or prospecting information, or rights to such information;
(iii) goodwill; and
(b) property, or a legal or equitable
right, is not, and is taken never to have been, a starting base asset
if:
(i) the miner has not made
a valid choice under section 85‑5 specifying the valuation approach for
the mining project interest; or
(ii) the miner fails to
give the Commissioner a valid *starting base return that covers the property or right.
(4) If, under Division 85, the market
value approach is the valuation approach for the mining project interest:
(a) treat any *mining, quarrying or prospecting information,
or any rights to such information, as property, or a legal or equitable right,
for the purposes of subsection (1); and
(b) treat any improvement to land in
the *project
area for the mining project interest as satisfying the requirements of that
subsection at the time mentioned in subsection (2) if:
(i) the improvement was
consumed or destroyed in carrying on *upstream mining operations relating to the mining
project interest; and
(ii) the consumption or
destruction happened after 1 May 2010 but before that time.
(5) Subject to section 80‑30, this Part
applies to any improvement to, or any fixture on, land as if it were an asset
separate from the land, whether the improvement or fixture is removable or not.
80‑30
Treating starting base assets as a single starting base asset
(1) If, under Division 85, the market
value approach is the valuation approach for a mining project interest, treat
as a single *starting
base asset any 2 or more of the following that would (apart from this subsection)
be starting base assets relating to the mining project interest:
(a) rights and interests that
constitute the mining project interest;
(b) any *mining, quarrying or prospecting
information, or rights to such information, relating to those rights and interests;
(c) goodwill relating to those rights
and interests;
(d) any improvement to land (but not a
fixture) in the *project
area for the mining project interest.
(2) However, if:
(a) the mining project interest is,
because of section 115‑10, a combined interest; and
(b) a constituent interest (as
mentioned in that section) of the combined interest forms part of the combined
interest only because a valid choice has been made under section 255‑20 (downstream
integration);
section 80‑25 and subsection (1) of this section
apply to the constituent interest as if it were a separate mining project
interest, and applies to the combined interest as if it did not include the
constituent interest.
80‑35
Mine development expenditure may be a starting base asset
(1) *Mine development expenditure is taken to be a starting
base asset relating to a mining project interest if it:
(a) was incurred during the period
between 2 May 2010 and 30 June 2012; and
(b) was incurred by a miner:
(i) in relation to that
mining project interest; or
(ii) in relation to a *pre‑mining project
interest from which that mining project interest *originated; and
(c) is not *interim expenditure relating to
property or a right that is a starting base asset because of section 80‑25.
(2) While a miner *holds the *starting base asset, it is taken,
for the purposes of subsections 80‑40(3) and (4), to be used for the purpose of
carrying on *upstream
mining operations for the mining project interest.
Note: For when a miner holds a starting base asset
that is mine development expenditure, see subsection 250‑10(2).
(3) Mine development expenditure
is expenditure that:
(a) is incurred in carrying on *upstream mining
operations relating to a mining project interest or *pre‑mining project operations relating
to a *pre‑mining
project interest; and
(b) relates to developing the *project area for the
interest for the purposes of extracting *taxable resources from the area,
including expenditure incurred in:
(i) removing overburden
from the area or a part of the area; and
(ii) excavating a pit in
the area; and
(iii) sinking a mineshaft in
the area.
Note: This section allows mine development
expenditure to be taken into account in a miner’s starting base even though it
is not related to another starting base asset.
In working out its decline in value under
Division 90, the expenditure is added to the base value of the “asset” as
interim expenditure.
Subdivision 80‑D—Amounts of starting base losses
Table of sections
80‑40 Starting base losses for the MRRT years
in which they arise
80‑45 Starting base losses for later MRRT years
80‑50 Mining project interests originating from
pre‑mining project interests with different valuation approaches
80‑40
Starting base losses for the MRRT years in which they arise
(1) In the *MRRT year in which a *starting base loss
arises, the amount of the starting base loss is the sum of the declines in
value, for the year, of all the *starting base assets that:
(a) relate to the mining project
interest for which the starting base loss arises; and
(b) were *held, for any time during the year, by a
miner that had the mining project interest during the year.
(2) However, the amount is reduced by the sum
of all the reductions (if any) required by subsections (3) and (4) in
relation to any of those *starting base assets for the year.
Use etc. that is not related to upstream mining
operations
(3) Reduce the amount under subsection (1)
relating to a *starting
base asset, to the extent (if any) that, during the *starting base days, the asset was:
(a) used; or
(b) *installed ready for use; or
(c) being constructed for use;
for a purpose other than carrying on *upstream mining
operations relating to the mining project interest.
Use etc. that is not related to mining expenditure
(4) Reduce the amount under subsection (1)
relating to a *starting
base asset (or, if that amount is reduced under subsection (3), that
amount as so reduced) to the extent (if any) that:
(a) during the *starting base days, the asset was:
(i) used; or
(ii) *installed ready
for use; or
(iii) being constructed for
use;
for carrying on *upstream mining
operations relating to the mining project interest; but
(b) that amount would have been *excluded
expenditure if it had been an amount of expenditure that the miner incurred.
(5) However, subsection (4) does not
apply if:
(a) under Division 85, the market
value approach is the valuation approach for the mining project interest; and
(b) the amount would have been *excluded
expenditure only because of section 35‑35 (cost of acquiring rights and
interests in projects).
Note: Subsection (5) ensures that a decline in
value of a mining project interest or an interest in the mining project
interest is not reduced under the market value approach, even though expenditure
incurred in acquiring the interest is excluded expenditure under Division 35.
Starting base days
(6) The starting base days in
relation to a *starting
base asset are the days, during the *MRRT year but on or after the *start time for the asset:
(a) on which a miner both *held the asset and
had the mining project interest; and
(b) on which the asset was, for any
purpose:
(i) used; or
(ii) *installed ready
for use; or
(iii) being constructed for
use.
(7) However:
(a) if a *starting base adjustment event for the
asset happens during the *MRRT year—any days in the MRRT year after that event are
not starting base days relating to the asset; and
(b) any days after the *termination day
for the mining project interest are not starting base days
relating to the asset.
80‑45
Starting base losses for later MRRT years
(1) In a later *MRRT year, the amount of the *starting base loss
is:
where:
previous application of the amount is the sum
of the parts (if any) of the *starting base loss that have been applied in working out,
for the preceding *MRRT
year, a *starting
base allowance for the mining project interest.
previous starting base loss is the *starting base loss
for the preceding *MRRT
year.
uplift factor is one of the following:
(a) if, under Division 85, the
book value approach is the valuation approach for the mining project interest:
(b) if, under Division 85, the
market value approach is the valuation approach for the mining project
interest:
(2) The amount worked out under paragraph (b)
of the definition of uplift factor in subsection (1) is to
be worked out to 3 decimal places (rounding up if the fourth decimal place is 5
or more).
80‑50
Mining project interests originating from pre‑mining project interests with
different valuation approaches
(1) If a mining project interest *originates from 2
or more *pre‑mining
project interests, and those that have a valuation approach under Division 85
do not all have the same valuation approach:
(a) in the circumstances mentioned in subsection (2),
there are 2 *starting
base losses, for the mining project interest for the same *MRRT year, of the
amounts provided in subsection (3); and
(b) in working out the amount of a *starting base
allowance for the mining project interest for an MRRT year, the starting base
losses for the mining project interest in the year are to be applied in the
order specified in subsection (4); and
(c) in working out under Division 90
the decline in value of any *starting base asset during an MRRT year, assume that the
applicable valuation approach is the valuation approach specified under subsection (5).
(2) There are 2 *starting base losses, for the mining
project interest for the same *MRRT year, if, for the year:
(a) there would have been a starting
base loss (the book value starting base loss) for the mining
project interest for that MRRT year if it had *originated only from the *pre‑mining project
interests for which the book value approach is the valuation approach under
Division 85; and
(b) there would have been another
starting base loss (the market value starting base loss) for the
mining project interest for that MRRT year if it had originated only from the
pre‑mining project interests for which the market value approach is the
valuation approach under Division 85.
(3) The amounts of those 2 *starting base
losses are the book value starting base loss and the market value starting base
loss.
(4) Despite subsection 80‑15(2), the order
for applying the *starting
base losses for the mining project interest for the year is:
(a) the book value starting base loss;
then
(b) the market value starting base
loss.
(5) The valuation approach is:
(a) the book value approach if the
asset relates to a *pre‑mining
project interest for which the book value approach is the valuation approach
under Division 85; or
(b) the market value approach if the
asset relates to a pre‑mining project interest for which the market value
approach is the valuation approach under Division 85.
Division 85—Valuation approaches
Guide to Division 85
85‑1
What this Division is about
The 2 valuation approaches are the book
value approach and the market value approach.
An entity can choose which valuation
approach to apply to all of its starting base assets relating to a mining
project interest (or a pre‑mining project interest).
Note: In some limited cases in which the market
value approach would otherwise apply, a look‑back approach to valuation can be
chosen: see Division 180.
Table of sections
Operative provisions
85‑5 Choosing a valuation approach
85‑10 Restriction on specifying the book value
approach
85‑15 The valuation approach for a mining
project interest
Operative provisions
85‑5
Choosing a valuation approach
(1) An *entity may choose which valuation
approach to apply to all *starting base assets (and all property or rights that are
expected to be starting base assets after the time mentioned in subsection 80‑25(2))
that the entity *holds
that relate to:
(a) a mining project interest that the
entity has; or
(b) a *pre‑mining project interest that the
entity holds.
Note: Division 119 in Schedule 1 to the Taxation
Administration Act 1953 is about choices under the MRRT law.
(2) The choice must specify whether the *entity has chosen:
(a) the book value approach; or
(b) the market value approach.
(3) The choice is not valid unless notice of
the choice is given in the *starting base return relating to the mining project
interest or *pre‑mining
project interest.
(4) The choice may specify that it applies to
every mining project interest or *pre‑mining project interest that the *entity has that
relates to a specified area.
(5) The choice applies, in relation to the
mining project interest or *pre‑mining project interest, to the first *MRRT year and all
later MRRT years.
85‑10
Restriction on specifying the book value approach
(1) The choice cannot specify the book value
approach unless:
(a) during the 18 months preceding 2 May
2010, an *entity
that had the mining project interest, or *held the *pre‑mining project interest, in that
period prepared a financial report relating to the interest in accordance with *accounting
standards; and
(b) the report relates to a financial
period that ended in the 18 months preceding 2 May 2010; and
(c) the report has been audited in
accordance with *auditing
standards.
(2) If, during the 18 months preceding 2 May
2010, the *entity
was a part of a consolidated entity (within the meaning of the Corporations
Act 2001), for the purposes of paragraph (1)(a), treat any financial
report for the consolidated entity, relating to the mining project interest, as
a report that the entity prepared.
85‑15
The valuation approach for a mining project interest
The valuation approach, for a mining project
interest that an *entity
has, is the approach specified in the choice under section 85‑5 relating
to:
(a) the mining project interest; or
(b) a *pre‑mining project interest from which
the mining project interest *originates.
Note 1: For mining project interests that originate
from pre‑mining project interests that have different valuation approaches, see
section 80‑50.
Note 2: For combined mining project interests in which
constituent interests have different valuation approaches, see section 115‑50.
Division 90—Declines in value of starting base assets
Table of Subdivisions
Guide to Division 90
90‑A How to work out the decline in value of a
starting base asset
90‑B Base values under the book value approach
90‑C Base values under the market value approach
90‑D Miscellaneous
Guide to Division 90
90‑1
What this Division is about
The decline in value of a starting base
asset during an MRRT year counts towards the miner’s starting base loss for a
mining project interest for the year.
Under the book value approach, the base
value of a starting base asset includes its value in the most recent financial
report before 2 May 2010. Under the market value approach, the base value
includes its market value as at 1 May 2010. Under either approach, the
base value may also include expenditure incurred before 1 July 2012.
Under the book value approach, an uplift
factor, based on the long term bond rate plus 7%, is applied to components of
the asset’s base value. Under the market value approach, an uplift factor is not
applied.
Subdivision 90‑A—How to work out the decline in value of a starting base
asset
Table of sections
90‑5 How to work out the decline in value of
a starting base asset
90‑10 Write off rates under the book value
approach
90‑15 Write off rates under the market value
approach
90‑5
How to work out the decline in value of a starting base asset
(1) The decline in value of a *starting base
asset, relating to a mining project interest, during an *MRRT year is as follows:
where:
base value is the base value of the asset for
that year worked out under whichever of the following is applicable:
(a) Subdivision 90‑B (book value
approach);
(b) Subdivision 90‑C (market
value approach);
(c) section 165‑60 (use etc. of
starting base assets after starting base adjustment events).
However, the base value may be reduced under section 90‑60
(partial disposal) or section 90‑65 (recoupment).
number of starting base days is the number of
*starting
base days, in relation to the *starting base asset, during the *MRRT year.
write off rate is the write off rate under
section 90‑10 or 90‑15 (whichever is applicable) for the asset for the
year.
(2) The decline in value during an *MRRT year cannot
be more than the asset’s *base value for that year.
90‑10
Write off rates under the book value approach
If, under Division 85, the book
value approach is the valuation approach for the mining project interest, the
write off rate of the *starting base asset for an *MRRT year is:
|
Write off rates under
the book value approach
|
|
Item
|
For this *MRRT year
|
The write off rate is:
|
|
1
|
the *MRRT year in which the *start time for the asset happens
|
36%
|
|
2
|
the first *MRRT year commencing after the *start time
|
37.5%
|
|
3
|
the second *MRRT year commencing after the *start time
|
37.5%
|
|
4
|
the third *MRRT year commencing after the *start time
|
60%
|
|
5
|
the fourth *MRRT year commencing after the *start time
|
100%
|
90‑15
Write off rates under the market value approach
(1) If, under Division 85, the market
value approach is the valuation approach for the mining project interest, the
write off rate of the *starting base asset for each *MRRT year is as follows:
where:
remaining effective life is:
(a) if the asset is a *depreciating
asset—the shortest of the following:
(i) the unelapsed part, as
at the start of the *MRRT
year, of what was the asset’s *effective life worked out as at its *start time;
(ii) the unelapsed part, as
at the start of the MRRT year, of the longest effective life, worked out as at
its start time, of any right or interest that is *held by the miner holding the *starting base
asset and that constitutes the whole or part of the mining project interest;
(iii) the number of years
specified in subsection (2); or
(b) if the asset is not a depreciating
asset—the shorter of the following:
(i) the unelapsed part, as
at the start of the MRRT year, of the longest effective life, worked out as at
its start time, of any right or interest that is held by the miner holding the
starting base asset and that constitutes the whole or part of the mining
project interest;
(ii) the number of years
specified in subsection (2).
(2) The number of years is the number of
years (including parts of years) between:
(a) the start of the *MRRT year; and
(b) 1 July 2037.
However, if the MRRT year starts after 30 June 2036,
the number of years is one.
(3) If the asset is an asset that is treated
as a single *starting
base asset because of section 80‑30, for the purposes of the definition of
remaining effective life in subsection (1):
(a) treat the asset as a *depreciating
asset, unless none of the *constituent assets of the single starting base asset are
depreciating assets; and
(b) treat the single starting base
asset’s *effective
life, at its *start
time, as the longest effective life, worked out as at that time, of any of the
constituent assets that are depreciating assets.
(4) For the purpose of working out the *effective life of
a *starting
base asset as at its *start
time:
(a) the miner may make the choices for
the purposes of this section; and
(b) the Commissioner may make the
decisions for the purposes of this section;
that the miner or Commissioner could have made under
Division 40 of the Income Tax Assessment Act 1997, relating to
working out the effective life of the asset under that Division.
Subdivision 90‑B—Base values under the book value approach
Table of sections
90‑20 Application of this Subdivision
90‑25 Initial base value
90‑30 Later base values
90‑20
Application of this Subdivision
This Subdivision applies to a *starting base
asset relating to a mining project interest if, under Division 85, the
book value approach is the valuation approach for mining project interest.
Note: A base value for an MRRT year during which the
asset “rejoins” the starting base after a starting base adjustment event
happened is worked out under section 165‑60.
90‑25
Initial base value
Working out the initial base value of a starting base
asset
(1) The base value of the *starting base
asset, for the *MRRT
year in which the *start
time for the asset happens, is:
(a) if at all times between 2 May
2010 and 30 June 2012 the *entity that *held it also had the mining project interest (or held the *pre‑mining project
interest from which the mining project interest *originated), and subsection (2)
applies to the mining project interest—the sum of:
(i) the initial book value
of the asset under subsection (3) or (4) (whichever is applicable); and
(ii) the sum of the
valuation amounts under subsection (6) for amounts of *interim
expenditure incurred in relation to the asset (other than amounts of interim
expenditure incurred in relation to acquiring or bringing into existence
another starting base asset); or
(b) if paragraph (a) does not
apply—the sum of the valuation amounts under subsection (6) for amounts of
interim expenditure in relation to the asset.
(2) This subsection applies to a mining
project interest if:
(a) the mining project interest
existed (or is a part of a mining project interest that existed) just before 2 May
2010; or
(b) the mining project interest *originates from a *pre‑mining project
interest that existed (or that is a part of a pre‑mining project interest that
existed) just before 2 May 2010.
Initial book value of a starting base asset
(3) If:
(a) the value of the asset is recorded
in the accounts from which the most recent audited financial report before 2 May
2010 was prepared; and
(b) the financial report relates to a
financial period that ended in the 18 months preceding that day;
the initial book value of the asset is as follows:
where:
accepted value is:
(a) the value recorded in those
accounts, unless paragraph (b) applies; or
(b) if that value is inconsistent with
an auditor’s report on the financial report—a value that is consistent with the
auditor’s report.
long term bond rate for the initial valuation period
is the *long
term bond rate for the initial valuation period under subsection (5).
n is the number of days in the initial
valuation period, divided by 365.
(4) Despite subsection (3), the initial
book value of the asset is zero if the value of the asset is not recorded as
mentioned in subsection (3).
Note: If the asset is mine development expenditure,
it will not have an initial book value.
Initial valuation period for a starting base asset
(5) The initial valuation period for the
asset is the period:
(a) starting:
(i) on the date of the
most recent audited financial report, prepared before 2 May 2010, from the
accounts in which the value of the asset is recorded, unless subparagraph (ii)
of this paragraph applies; or
(ii) if the value of the
asset recorded in those accounts is inconsistent with an auditor’s report on
the financial report—on the date of the auditor’s report; and
(b) ending at the end of the *MRRT year in which
the *start
time for the asset happens.
Valuation amounts for interim expenditure
(6) If the *entity that *held the asset incurred an amount of *interim
expenditure relating to the asset, the valuation amount for the amount of interim
expenditure in relation to the asset is:
where:
long term bond rate for the interim valuation period
is the *long
term bond rate for the interim valuation period under subsection (7).
n is the number of days in the interim valuation
period, divided by 365.
Interim valuation period for interim expenditure
(7) The interim valuation period for an
amount of *interim
expenditure is the period:
(a) starting on the day on which the *entity incurred
the amount; and
(b) ending at the end of the *MRRT year in which
the *start
time for the asset happens.
90‑30
Later base values
The base value of the *starting base
asset, for an *MRRT
year that is after the MRRT year in which the *start time for the asset happens, is:
where:
preceding base value is the base value of the
asset for the preceding *MRRT year.
preceding decline in value is the decline in
value of the asset, worked out under section 90‑5, for the preceding *MRRT year.
uplift factor is:
Subdivision 90‑C—Base values under the market value approach
Table of sections
90‑35 Application of this Subdivision
90‑40 Initial base value
90‑45 Mining project interest originating from
pre‑mining project interests etc.
90‑50 Later base values
90‑35
Application of this Subdivision
This Subdivision applies to a *starting base
asset relating to a mining project interest if, under Division 85, the
market value approach is the valuation approach for the mining project
interest.
Note: A base value for an MRRT year during which the
asset “rejoins” the starting base after a starting base adjustment event
happened is worked out under section 165‑60.
90‑40
Initial base value
(1) The base value of the *starting base
asset, for the *MRRT
year in which the *start
time for the asset happens, is:
(a) if at all times between 2 May
2010 and 30 June 2012 the *entity that *held it also had the mining project interest (or held the *pre‑mining project
interest from which the mining project interest *originated), and subsection (2)
applies to the mining project interest—the sum of:
(i) the *market value of
the asset on 1 May 2010; and
(ii) the sum of the amounts
of *interim
expenditure incurred in relation to the asset (other than amounts of interim
expenditure incurred in relation to acquiring or bringing into existence
another starting base asset); or
(b) if paragraph (a) does not
apply—the sum of the amounts of interim expenditure incurred in relation to the
asset.
Note 1: Division 180 allows a “look‑back” approach
to valuation to be chosen in some cases.
Note 2: If the asset is mine development expenditure,
its market value on 1 May 2010 will be zero.
(2) This subsection applies to a mining
project interest if:
(a) the mining project interest existed
(or is a part of a mining project interest that existed) just before 2 May
2010; or
(b) the mining project interest *originates from a *pre‑mining project
interest that existed, or that is a part of a pre‑mining project interest that
existed, just before 2 May 2010.
(3) In working out the *market value of an
asset that is treated as a single *starting base asset because of section 80‑30,
disregard any liability of the *entity to pay any *private mining royalty to the extent that:
(a) the royalty relates to *taxable resources
extracted from the *project
area for the mining project interest, or for a *pre‑mining project interest from which
the mining project interest *originates; and
(b) subsection 35‑40(3) does not apply
to the royalty.
Note: Subsection 35‑40(3) provides that private
mining royalties paid under a pre‑2 May 2010 arrangement are not covered
by the rule that private mining royalties are excluded expenditure.
90‑45
Mining project interest originating from pre‑mining project interests etc.
(1) For the purpose of working out under
section 90‑40 the *base value of a *starting base asset, relating to a mining project interest,
for the *MRRT
year in which the *start
time for the asset happens, if:
(a) the asset is, or includes, the
rights and interests that constitute the mining project interest; and
(b) the mining project interest did
not exist on 1 May 2010; and
(c) the mining project interest *originates from
one or more *pre‑mining
project interests, or one or more parts of pre‑mining project interests, that
existed just before 2 May 2010;
assume that the *market value of the asset on 1 May 2010 was
an amount equal to the market value, on that day, of the rights and interests
that constitute the pre‑mining project interest or pre‑mining project
interests, or the part or parts, from which the mining project interest
originates.
(2) However, this section does not apply if
the *entity
has made a choice under section 180‑5 (look‑back approach) relating to the
mining project interest.
90‑50
Later base values
The base value of the *starting base
asset, for an *MRRT
year that is not the MRRT year in which the *start time for the asset happens, is an
amount equal to the difference between:
(a) the base value of the asset for
the preceding MRRT year; and
(b) the decline in value of the asset,
worked out under section 90‑5, for the preceding MRRT year.
Subdivision 90‑D—Miscellaneous
Table of sections
90‑55 Meaning of interim
expenditure
90‑60 Partial disposal of a starting base asset
before the start time
90‑65 Recoupment of the value of a starting
base asset
90‑55
Meaning of interim expenditure
General interim expenditure
(1) An amount that an *entity incurs in relation to a *starting base
asset that the entity *holds in relation to a mining project interest (including
in relation to acquiring or bringing into existence such an asset) is interim
expenditure relating to the asset if:
(a) the amount:
(i) if the starting base
asset is a *depreciating
asset—is included in the cost of the asset under Subdivision 40‑C of the Income
Tax Assessment Act 1997; or
(ii) if the starting base
asset is a *CGT
asset (but not a depreciating asset)—is included in the *cost base of the asset; and
(b) the entity incurs the amount
during the period starting on the day provided under subsection (4) or (5)
and ending at the end of 30 June 2012.
(2) However, if the *starting base asset is a *CGT asset (but not
a *depreciating
asset), treat the amount of the *interim expenditure as not including any part of the amount
that consists of the third element of the *cost base under subsection 110‑25(4) of
the Income Tax Assessment Act 1997.
(3) Subsections (1) and (2) apply to a *starting base
asset that is treated as a single *starting base asset because of section 80‑30 or subsection
180‑10(3) to the extent that they would apply to the *constituent assets of the single
starting base asset if the constituent assets were starting base assets.
Start of the expenditure period
(4) If, under Division 85, the book
value approach is the valuation approach for the mining project interest, the
period starts:
(a) if the *entity *held the asset at all times from the
start of 2 May 2010 until the end of 30 June 2012—on the date of the
financial report mentioned in paragraph 90‑25(3)(a) in relation to the accounts
in which the value of the asset is recorded; or
(b) otherwise—on the first day, before
the end of 30 June 2012, from which the entity held the asset at all times
until the end of 30 June 2012.
Example: A miner bought an asset on 1 January 2011
and sold it on 1 May 2011. The miner bought the asset again on 1 June
2011 and still held it at the end of 30 June 2012.
The expenditure incurred in buying the
asset the first time (on 1 January 2011) is not interim expenditure,
because the miner did not hold the asset until the end of 30 June 2012, as
required by paragraph (4)(b).
The expenditure incurred in buying the
asset the second time (on 1 June 2011) is interim expenditure (if it is
covered by paragraph (1)(a)), because the miner held the asset until the
end of 30 June 2012.
(5) If, under Division 85, the market
value approach is the valuation approach for the mining project interest, the
period starts:
(a) if the *entity *held the asset at all times from the
start of 2 May 2010 until the end of 30 June 2012—on 2 May 2010;
or
(b) otherwise—on the first day, before
the end of 30 June 2012, from which the entity held the asset at all times
until the end of 30 June 2012.
Mine development expenditure as interim expenditure
(6) An amount that an *entity incurs in relation to a
mining project interest is interim expenditure if the amount is *mine development
expenditure to which subsection (1) does not apply.
(7) To avoid doubt, *mine development expenditure that
is *interim
expenditure cannot also be interim expenditure relating to another amount of
mine development expenditure.
Excluded expenditure
(8) Despite subsections (1) and (6), the
amount is not interim expenditure to the extent (if any) that the
amount would have been *excluded expenditure if it had been incurred after 1 July
2012.
90‑60
Partial disposal of a starting base asset before the start time
(1) The base value of a *starting base
asset, relating to a mining project interest that a miner has, for the *MRRT year in which
the *start
time for the asset happens, is reduced to the extent (if any) that any of the
miner’s interest in the asset is disposed of during the period:
(a) starting on the day provided under
subsection (2); and
(b) ending just before the start time
for the asset.
(2) The period starts:
(a) if, under Division 85, the
book value approach is the valuation approach for the mining project interest—on
the date of the financial report mentioned in paragraph 90‑25(3)(a) in relation
to the accounts in which the value of the asset is recorded; or
(b) if, under Division 85, the
market value approach is the valuation approach for the mining project
interest—on 2 May 2010.
(3) Treat, for the purposes of this section,
as a disposal of part of the miner’s interest in the *starting base asset an *arrangement that
has the effect of transferring to another *entity part of the benefits or
entitlements that the miner has in relation to the asset.
90‑65
Recoupment of the value of a starting base asset
Reducing the base value
(1) The base value of the *starting base
asset for an *MRRT
year is reduced to the extent (if any) that:
(a) an amount is received, or becomes
receivable, by the miner that has the mining project interest to which the
asset relates:
(i) if the year is the
MRRT year in which the *start time for the asset happens—during the period starting
on the day provided under subsection (2) and ending just before the end of
that year; or
(ii) in any other
case—during the year; and
(b) payment of the amount has, or
would have, the purpose or effect of *recouping or offsetting some or all of what would
(apart from this subsection) be the asset’s base value; and
(c) the amount does not relate to a *starting base
adjustment event for the asset; and
(d) the amount is not taken into
account through a reduction under section 90‑60.
(2) The period starts:
(a) if, under Division 85, the
book value approach is the valuation approach for the mining project
interest—on the date of the financial report mentioned in paragraph 90‑25(3)(a)
in relation to the accounts in which the value of the asset is recorded; or
(b) if, under Division 85, the
market value approach is the valuation approach for the mining project
interest—on 2 May 2010.
(3) However, subsection (1) does not
apply to the extent that:
(a) the *starting base asset is or includes the
rights and interests that constitute a mining project interest; and
(b) the amount mentioned in paragraph (1)(a)
relates to disposal of any of those rights and interests.
Including amounts in mining revenue
(4) If what would otherwise be the amount of
the reduction under subsection (1) exceeds what would (apart from that
subsection) be the *base
value of the *starting
base asset, the amount of the excess is included in the miner’s *mining revenue for
the *MRRT
year.
(5) However, if there have been reductions to
a *starting
base loss, for that *MRRT
year or an earlier MRRT year, under subsection 80‑40(3) or (4) relating to the *starting base
asset, the amount included in the miner’s *mining revenue under subsection (4)
is reduced by the following:
where:
excess amount is the amount of the excess
mentioned in subsection (4).
sum of reductions is the sum of the
reductions made relating to the asset under subsections 80‑40(3) and (4) during
that *MRRT
year or any earlier MRRT year.
total decline is the sum of the declines in
value of the asset that have happened during that *MRRT year or any earlier MRRT year.
Note: Reductions happen under subsection 80‑40(3) or
(4) if the asset is used, installed for use, or constructed for use for a
purpose other than carrying on upstream mining operations relating to the
mining project interest, or in connection with excluded expenditure.
Part 3‑6—Transferred pre‑mining loss allowances
Division 95—Transferred pre‑mining loss allowances
Guide to Division 95
95‑1
What this Division is about
Transferred pre‑mining loss allowances
enable a miner’s MRRT liability for a mining project interest for an MRRT year
to be reduced by pre‑mining losses relating to certain other pre‑mining project
interests that the miner has, or that a closely associated entity has.
Table of sections
Operative provisions
95‑5 Object of this Division
95‑10 When a miner has a transferred pre‑mining
loss allowance
95‑15 The amount of a transferred pre‑mining
loss allowance
95‑20 Available pre‑mining losses for a
transferred pre‑mining loss allowance
95‑25 Cap on available pre‑mining losses
95‑30 The pre‑mining
loss cap
Operative provisions
95‑5
Object of this Division
The object of this Division is to enable
*pre‑mining
losses related to a *pre‑mining
project interest to be transferred to mining project interests that are
sufficiently connected to the pre‑mining losses (even if the mining project interests
did not *originate
from the pre‑mining project interest).
95‑10
When a miner has a transferred pre‑mining loss allowance
A miner has a transferred pre‑mining
loss allowance for a mining project interest for an *MRRT year if:
(a) there is an amount (a remaining
profit) by which the miner’s *mining profit for the mining project interest for
the year exceeds the sum of all the *higher ranking allowances (if any) that the miner has for
the mining project interest for the year; and
(b) there are one or more *pre‑mining losses
(available pre‑mining losses) that, under section 95‑20, can
be applied in working out a transferred pre‑mining loss allowance for the
interest for the year.
95‑15
The amount of a transferred pre‑mining loss allowance
(1) The amount of the miner’s *transferred pre‑mining
loss allowance is so much of the sum of the available pre‑mining losses as does
not exceed the remaining profit.
(2) In working out the amount of a *transferred pre‑mining
loss allowance, *pre‑mining
losses are applied in the order in which they arise, but the miner may choose
the order in which to apply pre‑mining losses that arise at the same time.
Note: Division 119 in Schedule 1 to the Taxation
Administration Act 1953 is about choices under the MRRT law.
95‑20
Available pre‑mining losses for a transferred pre‑mining loss allowance
(1) A *pre‑mining loss can be applied in working
out a *transferred
pre‑mining loss allowance for the mining project interest (the receiving
interest) for the year in the circumstances set out in subsection (2)
or (3).
Note: Once a pre‑mining loss has been fully applied,
it ceases to be a pre‑mining loss (see subsection 70‑30(2)), and therefore
cannot be applied in working out a transferred pre‑mining loss allowance.
Pre‑mining project interest in force
(2) The *pre‑mining loss can be applied if:
(a) the *entity that has the *pre‑mining project
interest (the loss project interest) to which the pre‑mining loss
relates is:
(i) the miner; or
(ii) another entity that is
*closely associated
with the miner at the end of the year; and
(b) either:
(i) both the receiving
interest and the loss project interest relate to iron ore; or
(ii) both the receiving
interest and the loss project interest do not relate to iron ore.
Pre‑mining project interest replaced by a different
mining project interest
(3) The *pre‑mining loss can be applied if:
(a) a mining project interest *originates from
the *pre‑mining
project interest to which the pre‑mining loss relates; and
(b) the *entity that has that mining project
interest (also the loss project interest) is:
(i) the miner; or
(ii) another entity that is
*closely
associated with the miner at the end of the year; and
(c) either:
(i) both the receiving
interest and the loss project interest relate to iron ore; or
(ii) both the receiving
interest and the loss project interest do not relate to iron ore.
Competing applications of a pre‑mining loss
(4) Despite subsections (2) and (3), the
*pre‑mining
loss cannot be applied to the extent that it is applied in working out, for the
year:
(a) a *pre‑mining loss allowance; or
(b) a *transferred pre‑mining loss allowance;
for another mining project interest.
Meaning of closely associated
(5) A miner is closely associated
with another *entity
at a time if, at that time, they:
(a) are both *members of the same *consolidatable
group; or
(b) would both be members of the same
consolidatable group if the otherwise applicable requirements in column 3 of
the table in subsection 703‑15(2) of the Income Tax Assessment Act 1997 (Australian
residence requirements) were disregarded.
Note: The members of a consolidated group are
closely associated, since a consolidatable group continues to exist even after
the day on and after which the consolidatable group is taken to be
consolidated.
95‑25
Cap on available pre‑mining losses
(1) Despite section 95‑20, a *pre‑mining loss
that could otherwise be applied in working out a *transferred pre‑mining loss allowance
cannot be applied, to the extent the application of the loss would result in:
(a) pre‑mining losses that count
towards the loss project interest’s *pre‑mining loss cap exceeding that cap; or
(b) pre‑mining losses that count
towards the receiving interest’s pre‑mining loss cap exceeding that cap.
(2) A *pre‑mining loss that has been, or is to
be, applied in working out a *transferred pre‑mining loss allowance counts towards the *pre‑mining loss
cap of an interest if:
(a) the interest is the loss project
interest or receiving interest for that application of the loss; and
(b) the common ownership test in subsection (3)
is not met for that application of the loss; and
(c) the pre‑mining loss arose in the *MRRT year in which
the interest’s pre‑mining loss cap arose (the cap year), or an
earlier year; and
(d) the transferred pre‑mining loss
allowance is for the cap year, or a later year.
Common ownership test for transfer of pre‑mining losses
(3) The common ownership test is met for a *pre‑mining loss
that is to be applied in working out a *transferred pre‑mining loss allowance if the *entity that has
the loss project interest is the same as, or *closely associated with, the entity that
has the receiving interest, at all times in the period:
(a) starting at the start of the *MRRT year for
which the loss arises; and
(b) ending at the end of the MRRT year
for which the loss is to be applied.
Note 1: It is not a requirement that the same entity
has an interest at all times in the period mentioned.
Note 2: Section 115‑55 sets out further
restrictions on applying pre‑mining losses if a mining project interest is a
combined interest under Division 115.
95‑30
The pre‑mining loss cap
(1) A pre‑mining loss cap arises
for a mining project interest or a *pre‑mining project interest if:
(a) an entity starts to have the interest,
other than:
(i) because the interest
came into existence; or
(ii) because of the
operation of section 215‑20, 215‑25 or 215‑30 (interests joining or
leaving a consolidated group); or
(b) the entity that has the interest:
(i) joins or leaves a *consolidatable
group; or
(ii) would join or leave a
consolidatable group if the requirements in column 3 of the table in subsection
703‑15(2) of the Income Tax Assessment Act 1997 (Australian residence
requirements) for an entity to be a *head company or *subsidiary member of a consolidatable group were
disregarded.
(2) The amount of the *pre‑mining loss cap for a mining
project interest or *pre‑mining
project interest is worked out by dividing by the *MRRT rate:
(a) if paragraph (1)(a)
applies—the amount paid or payable by the entity for starting to have the
interest; or
(b) if paragraph (1)(b)
applies—so much of the amount paid or payable for the joining or leaving as is
reasonably attributable to the interest.
(3) However, if a mining project interest or *pre‑mining project
interest would, apart from this subsection, have more than one *pre‑mining loss
cap, the pre‑mining loss cap for the interest is the one that
arises last.
Part 3‑7—Transferred mining loss allowances
Division 100—Transferred mining loss allowances
Guide to Division 100
100‑1
What this Division is about
A miner’s MRRT liability for a mining
project interest may be reduced by mining losses from one or more other mining
project interests.
The interests must satisfy a common
ownership test from the year the loss arises to the year the loss is applied.
Table of sections
Operative provisions
100‑5 Object of this Division
100‑10 When a miner has a transferred mining loss
allowance
100‑15 The amount of a transferred mining loss
allowance
100‑20 Available mining losses
100‑25 Common ownership test
Operative provisions
100‑5
Object of this Division
The object of this Division is to enable
*mining
losses of a mining project interest to be transferred to other mining project
interests, subject to certain limitations primarily designed to ensure that the
interests constitute a single economic unit.
100‑10
When a miner has a transferred mining loss allowance
A miner has a transferred mining
loss allowance for a mining project interest for an *MRRT year if:
(a) there is an amount (a remaining
profit) by which the miner’s *mining profit for the interest for the
year exceeds the sum of all the *higher ranking allowances (if any) that the miner has for
the interest for the year; and
(b) there are one or more *mining losses (available
mining losses) that, under section 100‑20, can be applied in
working out the transferred mining loss allowance for the interest for the
year.
100‑15
The amount of a transferred mining loss allowance
(1) The amount of the miner’s *transferred mining
loss allowance is so much of the sum of the available mining losses as does not
exceed the remaining profit.
(2) In working out the amount of a *transferred mining
loss allowance, *mining
losses are applied in the order in which they arise, but the miner may choose
the order in which to apply mining losses that arise at the same time.
Note: Division 119 in Schedule 1 to the Taxation
Administration Act 1953 is about choices under the MRRT law.
100‑20
Available mining losses
(1) A *mining loss can be applied in working out
a *transferred
mining loss allowance for a mining project interest (the receiving
interest) for an *MRRT year (the transfer year) if:
(a) the condition in section 100‑25
(common ownership test) is met; and
(b) the mining loss does not relate to
an MRRT year for which the alternative valuation method under Division 175
was chosen in relation to the mining project interest for which the mining loss
arises (the loss project interest); and
(c) either:
(i) both the loss project
interest and the receiving interest relate to iron ore; or
(ii) both the loss project
interest and the receiving interest do not relate to iron ore.
(2) Despite subsection (1), the *mining loss cannot
be applied to the extent it is applied in working out:
(a) a *mining loss allowance; or
(b) a *transferred mining loss allowance;
for another mining project interest for the year.
Note: Section 115‑60 sets out further
restrictions on applying mining losses if a mining project interest is a
combined interest under Division 115.
100‑25
Common ownership test
(1) At all times in the period mentioned in subsection (2),
the miner who has the loss project interest and the miner who has the receiving
interest must be:
(a) the same miner; or
(b) *closely associated with each other.
(2) The period:
(a) starts at the start of the *MRRT year for
which the *mining
loss arises; and
(b) ends at the end of the transfer
year.
(3) To avoid doubt, it is not a requirement
of subsection (1) that the same miner has an interest at all times in the
period mentioned.
Example: At the start of the period, the loss project
interest and the receiving interest are held by the same miner. Part way
through the period, the loss project interest is transferred to another entity
in the same consolidatable group. The condition in this section is met because,
at all times in the period, the interests were held by either the same miner,
or a closely associated miner.
Chapter 4—Specialist liability rules
Part 4‑1—Mining project interests
Division 115—Combining mining project interests
Table of Subdivisions
Guide to Division 115
115‑A Object of this Division
115‑B When mining project interests are combined
115‑C The effect of combining mining project
interests
Guide to Division 115
115‑1
What this Division is about
Mining project interests are combined
in a single mining project interest if certain requirements are met (in
particular, they must be integrated with each other). The combined mining
project interest in effect takes the place of those mining project interests.
Subdivision 115‑A—Object of this Division
Table of sections
115‑5 Object of this Division
115‑5
Object of this Division
The object of this Division is to treat
mining project interests that are *integrated as a single interest (unless it would compromise
the quarantining rules for *allowance components), so that the single interest becomes
the basis for ascertaining the *MRRT liability for all those interests.
Subdivision 115‑B—When mining project interests are combined
Table of sections
115‑10 Mining project interests may be treated as
the same mining project interest
115‑15 Choosing to override non‑compliance
115‑20 Transferability of royalty credits
115‑25 Transferability of pre‑mining losses
115‑30 Transferability of mining losses
115‑35 Starting base losses and starting base
assets
115‑10
Mining project interests may be treated as the same mining project interest
(1) For the purposes of the *MRRT law (other
than this Division and Division 255), 2 or more mining project interests (constituent
interests) are taken to be the same mining project interest (the combined
interest) from a particular time (the combining time)
during an *MRRT
year if:
(a) each of the constituent interests
is *integrated
with each of the other constituent interests; and
(b) each *royalty credit relating to any of the
constituent interests complies with section 115‑20; and
(c) each amount (an existing pre‑mining
loss) that:
(i) is a *pre‑mining loss
relating to any of the constituent interests; or
(ii) if the MRRT year were
to end at the combining time, would be a pre‑mining loss relating to any of the
constituent interests;
complies with section 115‑25;
and
(d) each amount (an existing
mining loss) that:
(i) is a *mining loss
relating to any of the constituent interests; or
(ii) if the MRRT year were
to end at the combining time, would be a mining loss relating to any of the
constituent interests;
complies with section 115‑30;
and
(e) each *starting base loss, or *starting base
asset, relating to any of the constituent interests complies with section 115‑35.
Note: For when interests are integrated,
see Division 255.
(2) Any of the constituent interests may be
mining project interests to which this section has already applied.
(3) However, if the *suspension day for a mining project
interest has happened, the mining project interest cannot be a constituent
interest.
115‑15
Choosing to override non‑compliance
(1) The fact that:
(a) a *royalty credit relating to a constituent
interest does not comply with section 115‑20; or
(b) an existing pre‑mining loss
relating to a constituent interest does not comply with section 115‑25; or
(c) an existing mining loss relating
to a constituent interest does not comply with section 115‑30; or
(d) a *starting base loss, or *starting base
asset does not comply with section 115‑35;
does not prevent section 115‑10 applying to the
constituent interest if the miner who has the constituent interest chooses to
have the constituent interest treated as part of the combined interest despite
the non‑compliance.
Note: Division 119 in Schedule 1 to the Taxation
Administration Act 1953 is about choices under the MRRT law.
(2) If the miner makes that choice:
(a) any such *royalty credit, existing pre‑mining
loss, existing mining loss or *starting base loss is extinguished; and
(b) the*base value of any such *starting base
asset is reduced to zero.
115‑20
Transferability of royalty credits
A *royalty credit that relates to one of the
constituent interests complies with this section if, under section 65‑20
(available royalty credits), the royalty credit could be applied in working out
a *transferred
royalty allowance for each of the other constituent interests for the *MRRT year if:
(a) the year were to end at the
combining time; and
(b) subsection 65‑20(2) were
disregarded.
115‑25
Transferability of pre‑mining losses
An existing pre‑mining loss that relates
to one of the constituent interests complies with this section if:
(a) under section 95‑20
(available pre‑mining losses), the existing pre‑mining loss could be applied in
working out a *transferred
pre‑mining loss allowance for each of the other constituent interests for the *MRRT year if:
(i) the year were to end
at the combining time; and
(ii) subsection 95‑20(4)
were disregarded; and
(b) in a case where one or more of the
constituent interests is a combined interest under a previous application of
this Division—section 115‑55 does not prevent the existing pre‑mining loss
from being so applied.
Note: Section 95‑25 (cap on available pre‑mining
losses) may impose additional limits on the availability of pre‑mining losses
under section 95‑20.
115‑30
Transferability of mining losses
An existing mining loss that relates to
one of the constituent interests complies with this section if:
(a) under subsection 100‑20(1)
(available mining losses), the existing mining loss could be applied in working
out a *transferred
mining loss allowance for each of the other constituent interests for the *MRRT year if:
(i) the year were to end
at the combining time; and
(ii) subsection 100‑20(2)
were disregarded; and
(b) in a case where one or more of the
constituent interests is a combined interest under a previous application of
this Division—section 115‑60 does not prevent the existing mining loss
from being so applied.
115‑35
Starting base losses and starting base assets
A *starting base loss, or a *starting base
asset, that relates to one of the constituent interests complies with this section
if:
(a) the constituent interest:
(i) existed on 2 May
2010; or
(ii) *originates from a *pre‑mining project
interest that existed on 2 May 2010; and
(b) the miner who has the constituent
interest is, and at all times since 2 May 2010 has been, the miner who has
each other constituent interest (or the pre‑mining project interest from which
the interest originates).
Subdivision 115‑C—The effect of combining mining project interests
Table of sections
115‑40 The effect of combining mining project interests
115‑45 Allowance components arising in preceding
MRRT years
115‑50 Different valuation approaches for mining
project interests
115‑55 Transferred pre‑mining loss allowances
115‑60 Transferred mining loss allowances
115‑65 Choice of the alternative valuation method
115‑40
The effect of combining mining project interests
In the *MRRT year (the combining year)
in which the constituent interests are taken to be the combined interest, the
miner is liable to pay any MRRT that is payable in relation to:
(a) the constituent interests; and
(b) the part of the year before the
constituent interests become the combined interest;
as if the constituent interests were taken to be the
combined interest at the start of the year.
Note 1: If the whole of the combined interest is
transferred later in the same year to a new miner, the new miner’s MRRT
liability in relation to the year will include the liability under this
section: see Division 120.
Note 2: If a part of the combined interest is
transferred later in the same year to a new miner, the new miner’s MRRT
liability in relation to the year will include a part of the liability under
this section: see Division 125.
115‑45
Allowance components arising in preceding MRRT years
Royalty credits
(1) Any *royalty credit for a constituent interest
for an *MRRT
year preceding the combining year is taken to be a royalty credit for the
combined interest for that year.
Pre‑mining losses
(2) If, for an *MRRT year preceding the combining year,
there is a *pre‑mining
loss for at least one of the constituent interests:
(a) all of the pre‑mining losses for
the constituent interests for the year are taken to be a single pre‑mining loss
for the combined interest for that MRRT year; and
(b) the amount of the single pre‑mining
loss is taken to be the sum of those pre‑mining losses.
Mining losses
(3) If, for an *MRRT year preceding the combining year,
there is a *mining
loss for at least one of the constituent interests:
(a) all of the mining losses for the
constituent interests for the year are taken to be a single mining loss for the
combined interest for that MRRT year; and
(b) the amount of the single mining
loss is taken to be the sum of those mining losses.
Starting base losses
(4) If, for an *MRRT year preceding the combining year,
there is a *starting
base loss for at least one of the constituent interests:
(a) all of the starting base losses
for the constituent interests for the year are taken to be a single starting
base loss for the combined interest for that MRRT year; and
(b) the amount of the single starting
base loss is taken to be the sum of those starting base losses.
(5) However, subsection (4) does not
apply in circumstances covered by section 115‑50.
115‑50
Different valuation approaches for mining project interests
(1) If, under Division 85, there is not
the same valuation approach, for all the constituent interests:
(a) in the circumstances mentioned in subsection (2),
there are 2 *starting
base losses, for the combined interest for the same *MRRT year, of the amounts provided
in subsection (3); and
(b) in working out the amount of a *starting base
allowance for the combined interest for an MRRT year, the starting base losses
for the combined interest in the year are to be applied in the order specified
in subsection (4); and
(c) in working out under Division 90
the decline in value of any *starting base asset relating to the constituent interest
during an MRRT year, assume that the applicable valuation approach is the
valuation approach specified under subsection (5).
(2) There are 2 *starting base losses, for the combined
interest for the same *MRRT year, if, for the year:
(a) there would have been one or more
starting base losses (book value starting base losses) for the
constituent interests for which the book value approach is the valuation
approach under Division 85; and
(b) there would have been one or more
starting base losses (market value starting base losses) for the
constituent interests for which the market value approach is the valuation approach
under Division 85;
if the combined interest had not existed.
(3) The amounts of those 2 *starting base
losses are:
(a) an amount equal to the sum of the
book value starting base losses; and
(b) an amount equal to the sum of the
market value starting base losses.
(4) Despite subsection 80‑15(2), the order
for applying the *starting
base losses for the combined interest for the year is:
(a) the starting base loss relating to
the book value starting base losses; then
(b) the starting base loss relating to
the market value starting base losses.
(5) The valuation approach is:
(a) the book value approach if the
asset relates to a constituent interest for which the book value approach is
the valuation approach under Division 85; or
(b) the market value approach if the
asset relates to a constituent interest for which the market value approach is
the valuation approach under Division 85.
(6) For the purposes of this section, if any
of the constituent interests has, under section 80‑50, 2 *starting base
losses for the same *MRRT
year, treat the interest as 2 constituent interests for which the valuation
approaches under Division 85 are different.
115‑55
Transferred pre‑mining loss allowances
(1) A *pre‑mining loss relating to a mining
project interest other than the combined interest (or any of the constituent
interests) cannot be applied in working out a *transferred pre‑mining loss allowance for
the combined interest for an *MRRT year if:
(a) in relation to at least one of the
constituent interests—section 95‑25 (cap on available pre‑mining losses)
would have prevented the loss from being applied in working out a transferred
pre‑mining loss allowance for the constituent interest for the year (if the
combined interest had not existed); and
(b) the loss arose in relation to an
MRRT year preceding the combined interest coming into existence.
(2) A *pre‑mining loss relating to the combined
interest (or any of the constituent interests) cannot be applied in working out
a *transferred
pre‑mining loss allowance for another mining project interest for an *MRRT year if:
(a) in relation to at least one of the
constituent interests—section 95‑25 (cap on available pre‑mining losses)
would have prevented the loss from being applied in working out a transferred pre‑mining
loss allowance for the other mining project interest for the year if:
(i) the combined interest
had not existed; and
(ii) the loss had related
to the constituent interest; and
(b) the loss arose in relation to an
MRRT year preceding the combined interest coming into existence.
(3) This section has effect despite section 95‑25
(cap on available pre‑mining losses).
115‑60
Transferred mining loss allowances
(1) A *mining loss relating to a mining project
interest other than the combined interest (or any of the constituent interests)
cannot be applied in working out a *transferred mining loss allowance for the combined interest
for an *MRRT
year if:
(a) in relation to at least one of the
constituent interests—subsection 100‑20(1) (available mining losses) would not
have allowed the loss to be applied in working out a transferred mining loss
allowance for the constituent interest for the year (if the combined interest
had not existed); and
(b) the loss arose in relation to an
MRRT year preceding the combined interest coming into existence.
(2) A *mining loss relating to the combined
interest (or any of the constituent interests) cannot be applied in working out
a *transferred
mining loss allowance for another mining project interest for an *MRRT year if:
(a) in relation to at least one of the
constituent interests—subsection 100‑20(1) (available mining losses) would not
have allowed the loss to be applied in working out a transferred mining loss
allowance for the other mining project interest for the year if:
(i) the combined interest
had not existed; and
(ii) the loss had related
to the constituent interest; and
(b) the loss arose in relation to an
MRRT year preceding the combined interest coming into existence.
(3) This section has effect despite section 100‑20
(available mining losses).
115‑65
Choice of the alternative valuation method
(1) A choice by the miner to use the
alternative valuation method under Division 175 in relation to any of the
constituent interests for the combining year has no effect.
(2) The miner may choose to use the
alternative valuation method under Division 175 in relation to the
combined interest for the year in the circumstances set out in Subdivision 175‑B.
The choice relates to the whole of the year.
Division 120—Transferring mining project interests
Guide to Division 120
120‑1
What this Division is about
If a mining project interest is
transferred, in most respects the new miner takes over from the original miner
in relation to MRRT matters. In particular, the new miner bears the MRRT
liability for the transfer year.
Table of sections
Operative provisions
120‑5 Object of this Division
120‑10 Effect of mining project transfer
120‑15 Effect of transferred property
120‑20 Events happening after mining project transfer
120‑25 Start of mining venture taken to be mining
project transfer
Operative provisions
120‑5
Object of this Division
The object of this Division is to ensure
that, if a mining project interest is transferred:
(a) consistent with the MRRT being a
project‑based tax, matters relevant to the MRRT that are connected with the
interest before the transfer remain connected with the interest after the
transfer; and
(b) in particular, the *MRRT liability for
the interest for the part of the *MRRT year before the transfer attaches to the miner who has
the interest after the transfer, and not to the miner who had the interest
before the transfer.
120‑10
Effect of mining project transfer
Liability for MRRT moves with interest
(1) Any MRRT that would otherwise be payable
by a miner in relation to a mining project interest in relation to the part of
an *MRRT year
before a *mining
project transfer happens (the pre‑transfer part year) is payable
instead, in accordance with this Division:
(a) by the miner that has the mining
project interest after the transfer; and
(b) in the MRRT year for that miner in
which the transfer happens.
Note 1: The MRRT liability for the miner that has the
interest after the transfer is worked out in accordance with this Division. It
may be more, or less, than the liability the other miner would have had,
depending on circumstances such as choices, offsets and available allowances.
Note 2: For any period after the transfer that the new
miner has the interest, its liability for MRRT (if any) is worked out under the
ordinary rules.
Note 3: The miner that has the interest after the
transfer may have an additional amount of instalment income in the instalment
quarter in which the transfer happens: see section 115‑95 in Schedule 1
to the Taxation Administration Act 1953.
Continuation of mining project interest
(2) The mining project interest (the new
interest) that a miner (the new miner) has just after a *mining project
transfer is taken to be a continuation of the mining project interest (the original
interest) a miner (the original miner) had just before
the transfer.
Note: This means, for example, that:
(a) the mining project interest retains the history of
when it started, and of the miners who have had the interest at various times;
and
(b) a choice made, under Division 85, of the
valuation approach for the mining project interest continues to have effect;
and
(c) starting base assets that have been used to an extent
in relation to the mining project interest before the transfer retain the
history of that use.
Meaning of mining project transfer
(3) A mining project transfer happens
if:
(a) an *arrangement that has the effect of
transferring the whole of the entitlement comprising a mining project interest
from one miner to a single other *entity comes into force; and
(b) the mining project interest the
other entity starts to have covers the same *project area.
Note: If the arrangement relates to a combined
interest (see Division 115) that is integrated because the original miner chose
downstream integration:
(a) the interest will not be a combined interest after the
transfer unless the new miner has chosen downstream integration; and
(b) under Division 125, there will be a split of the
combined interest until the new miner makes such a choice.
MRRT amounts move with interest
(4) For the purposes of the application of
the *MRRT law
in the *MRRT
year in which the transfer happens or a later MRRT year, each of the following
amounts that, apart from this Division, would be an amount for the original
miner and the original interest is instead an amount for the new miner and the
new interest:
(a) an amount included in *mining revenue for
the pre‑transfer part year or an earlier MRRT year;
(b) an amount included in *mining expenditure
for the pre‑transfer part year or an earlier MRRT year;
(c) an amount of a *royalty credit
arising for the original interest in the pre‑transfer part year;
(d) an amount of an *allowance
component arising in an earlier MRRT year.
Note: If the original miner’s MRRT year starts
before the new miner’s MRRT year, the effect of this provision is that amounts
from before the start of the new miner’s MRRT year are taken into account for
the new miner in the new miner’s MRRT year.
Example: The original miner has a substituted accounting
period of 12 months from 1 April to 31 March. The new miner has an
MRRT year of 1 July to 30 June. The transfer happens on 1 July.
The amounts covered by subsection (4) are all amounts that would be
amounts for the original miner for the period from 1 April to 30 June,
so these will be amounts for the new miner for the MRRT year 1 July to 30 June.
Choices
(5) Despite subsection (4), in working
out under that subsection an amount for the *MRRT year in which the transfer happens
or a later MRRT year, a choice of the following kind made by the new miner is
taken into account, but a choice of that kind made by the original miner is
disregarded:
(a) a choice under Division 175 to
use the alternative valuation method in relation to the mining project interest
for the *MRRT
year in which the mining project transfer happens;
(b) a choice under Division 200
to use the simplified MRRT method for that year.
Note: The effect of a simplified MRRT method choice
made for a year before the transfer year is not affected: all allowance
components are extinguished (see Division 200).
Example: An original miner had made a choice to use the
alternative valuation method in the MRRT year in which a mining project
transfer happens. The new miner makes no choices.
The new miner works out the amounts to
include in its mining revenue for the pre‑transfer part year by working out the
amount the original miner would have included if the original miner had not
chosen to use the alternative valuation method.
Suspension day
(6) If there is a *suspension day for the mining
project interest that was chosen under paragraph 130‑10(1)(a):
(a) the *mining project transfer does not affect:
(i) any extinguishment
under section 130‑15 of *allowance components relating to the mining project
interest; or
(ii) any *rehabilitation tax
offset amounts, for any earlier *MRRT years, relating to the mining project interest; and
(b) that suspension day:
(i) does not affect any
further allowance components relating to the mining project interest and that
MRRT year or later MRRT years; but
(ii) is no longer to be
taken into account in determining whether there are any rehabilitation tax
offset amounts, for that MRRT year or any later MRRT years, relating to the
mining project interest.
Note: The new miner may make a suspension day choice
in the circumstances set out in Division 130.
120‑15
Effect of transferred property
(1) This section applies if:
(a) any property, or any legal or
equitable right that is not property, (the transferred property)
is transferred to the new miner under the *mining project transfer; and
(b) the original miner used the
transferred property in *mining operations for the mining project interest; and
(c) the transferred property:
(i) gave rise to an amount
of *mining
expenditure for the original miner, or another miner who preceded the original
miner, in relation to the mining project interest; or
(ii) is, or may become, a *starting base
asset, in relation to the mining project interest.
(2) Despite section 30‑40, no amount is
included in the original miner’s *mining revenue for the mining project interest in relation
to any part of the consideration for the transfer that relates to the transferred
property.
(3) For the new miner, any part of the
consideration for the transfer that relates to the transferred property is
taken, for the purposes of section 35‑35, to be expenditure relating to
the acquisition of the mining project interest.
(4) To avoid doubt, the *mining project
transfer, and the transfer of the transferred property, is not an event or
circumstance giving rise to an adjustment under Division 160.
Note: Events or circumstances happening after the
transfer may give rise to adjustment under Division 160, for instance if
the new miner uses the transferred property in relation to the mining project
interest to a greater or lesser extent than the original miner.
120‑20
Events happening after mining project transfer
(1) A thing that happens at a particular time
in relation to an *entity
(the first entity) is taken instead to happen in relation to
another entity, and to have the effect mentioned in paragraph (c) in
relation to a mining project interest the other entity has, if:
(a) the other entity has the interest
at the time as a result of a *mining project transfer; and
(b) the first entity had the interest
at an earlier time; and
(c) if the first entity still had the
interest, the thing would affect the first entity’s *MRRT liability, *allowance
components or *rehabilitation
tax offsets for the interest.
(2) However, if one or more *mining project
splits or *pre‑mining
project splits has happened in relation to the interest in the period from when
the first entity last had the interest until the time the thing happens:
(a) the thing is taken to happen in
relation to the other entity in relation to the interest; but
(b) the extent to which the thing
affects the other entity’s *MRRT liability, *allowance components or *rehabilitation tax offsets is reduced to
reflect:
(i) if only one split (whether
a mining project split or a pre‑mining project split) happened in the
period—the *split
percentage relating to that split; or
(ii) if 2 or more such splits
happened in the period—a percentage worked out by multiplying the split
percentages for each of those splits.
Note: The first entity is required to advise the
other entity about the thing that happens: see Division 121 in Schedule 1
to the Taxation Administration Act 1953.
Example: After a mining project transfer happens, the
original miner makes an initial supply of taxable resources that would have
given rise to an amount of mining revenue for the miner if it still had the
interest. Instead, the new miner is taken to have made the initial supply, and
includes the amount in mining revenue for the interest.
120‑25
Start of mining venture taken to be mining project transfer
(1) The start of a *mining venture is taken to be a *mining project
transfer of a mining project interest that existed, just before that start,
under subsection 15‑5(4) if:
(a) the start of the mining venture
gives rise to a single mining project interest under subsection 15‑5(1); and
(b) the mining venture relates to all
of the *taxable
resources to which the mining project interest under subsection 15‑5(4) related.
(2) In applying this Division for the
purposes of subsection (1), disregard subsection 120‑10(5) and paragraph
120‑10(6)(b).
Example: TressCo has a mining project interest under
subsection 15‑5(4) as a result of being granted a production right entitling it
to extract coal from an area.
TressCo later starts a mining venture, in
which it is the sole participant, to extract the whole coal deposit from the
whole of the area to which the production right relates. The start of this
mining venture gives rise to a mining project interest for TressCo under
subsection 15‑5(1) and is taken to be a mining project transfer of the mining
project interest TressCo had under subsection 15‑5(4).
One effect of this is that the interest
TressCo has in the mining venture (the new interest) is taken to be a
continuation of the mining project interest it had under subsection 15‑5(4)
(the original interest).
Division 125—Splitting mining project interests
Guide to Division 125
125‑1
What this Division is about
If a mining project interest is split,
in most respects the new miners take over from the original miner in relation
to MRRT matters, each to an extent appropriate to their share of the split. In
particular, each new miner bears an appropriate share of the MRRT liability for
the year of the split.
Table of sections
Operative provisions
125‑5 Object of this Division
125‑10 Effect of mining project split
125‑15 Meaning of split
percentage
125‑20 Effect of transferred property
125‑25 Effect of MRRT liability from earlier
years on rehabilitation tax offset amounts
125‑30 Events happening after mining project
split
125‑35 Start of mining venture taken to be mining
project split
Operative provisions
125‑5
Object of this Division
The object of this Division is to ensure
that, if a mining project interest is split:
(a) consistent with the MRRT being a
project‑based tax, matters relevant to the MRRT that are connected with the
interest before the split remain connected (to the appropriate extents) with
the split interests after the split; and
(b) in particular, the *MRRT liability for
the interest for the part of the *MRRT year before the split attaches (to the appropriate
extents) to the miners who have the split interests after the split.
125‑10
Effect of mining project split
Liability for MRRT moves with interest
(1) Any MRRT that would otherwise be payable
by a miner in relation to a mining project interest in relation to the part of
an *MRRT year
before a *mining
project split happens (the pre‑split part year) is payable
instead, in accordance with this Division:
(a) by each miner that has the mining
project interest after the split; and
(b) in the MRRT year for each such
miner in which the split happens.
Note 1: The MRRT liability for each split interest is
worked out in accordance with this Division. The sum total of those liabilities
may be more, or less, than the liability the original miner would have had,
depending on circumstances such as choices, offsets and available allowances.
Note 2: For any period after the split that the new
miner has the interest, its liability for MRRT (if any) is worked out under the
ordinary rules.
Note 3: The miner that has the interest after the split
may have an additional amount of instalment income in the instalment quarter in
which the split happens: see section 115‑95 in Schedule 1 to the Taxation
Administration Act 1953.
Continuation of mining project interest
(2) Each mining project interest (a new
interest) that a miner (a new miner) has just after a *mining project
split is taken to be a continuation of the mining project interest (the original
interest) a miner (the original miner) had just before
the split.
Note: This means, for example, that:
(a) each split interest retains the history of when the
mining project interest started, and of the entities who have held the interest
at various times; and
(b) a choice made, under Division 85, of the
valuation approach for the mining project interest continues to have effect;
and
(c) starting base assets that have been used to an extent
in relation to the mining project interest before the transfer retain the
history of that use.
Meaning of mining project split
(3) A mining project split
happens if:
(a) an *arrangement comes into force that has the
effect of transferring, from one miner to 2 or more other *entities, the
whole of the entitlement comprising a mining project interest; or
(b) an arrangement comes into force
that has the effect of transferring, from one miner to one or more other
entities, a part of the entitlement comprising a mining project interest; or
(c) under an *Australian law, the *production right
to which a mining project interest relates is split into 2 or more production
rights; or
(d) 2 or more constituent interests
that are taken to be the same mining project interest because of Division 115
stop being *integrated.
Note: A new miner may also be the original miner, in
the situations described in paragraphs (b), (c) and (d).
MRRT amounts move with interest
(4) For the purposes of the application of
the *MRRT law
in the *MRRT
year in which the split happens or a later MRRT year, each of the following
amounts that, apart from this Division, would be an amount for the original
miner and the original interest is instead, to the extent of a new interest’s *split percentage,
an amount for the new miner and the new interest:
(a) an amount included in *mining revenue for
the pre‑split part year or an earlier MRRT year;
(b) an amount included in *mining expenditure
for the pre‑split part year or an earlier MRRT year;
(c) an amount of a *royalty credit
arising for the original interest in the pre‑split part year;
(d) an amount of an *allowance
component arising in an earlier MRRT year.
Note: If the original miner’s MRRT year starts
before a new miner’s MRRT year, the effect of this provision is that amounts
from before the start of the new miner’s MRRT year are taken into account for
the new miner in the new miner’s MRRT year.
Example: The original miner has a substituted accounting
period of 12 months from 1 April to 31 March. The new miner has an
MRRT year of 1 July to 30 June. The split happens on 1 July. The
amounts covered by subsection (4) are all amounts that would be amounts
for the original miner for the period from 1 April to 30 June, so these
will, to the extent of the new interest’s split percentage, be amounts for the
new miner for the MRRT year 1 July to 30 June.
Choices
(5) Despite subsection (4), in working
out under that subsection an amount for the *MRRT year in which the split happens or a
later MRRT year, a choice of the following kind made by the new miner is taken
into account, but a choice of that kind made by the original miner is
disregarded:
(a) a choice under Division 175 to
use the alternative valuation method in relation to the mining project interest
for the *MRRT
year in which the *mining
project split happens;
(b) a choice under Division 200
to use the simplified MRRT method for the MRRT year in which the split happens.
Note: The effect of a simplified MRRT method choice
made for a year before the split year is not affected: all allowance components
are extinguished (see Division 200).
Example: A mining project interest is split into 2 mining
project interests held by 2 different new miners. The original miner had made a
choice to use the alternative valuation method for the interest for the MRRT
year in which the split happens. One of the new miners also chooses to use the
alternative valuation method and one does not.
The new miner that chooses to use the
alternative valuation method works out the amounts to include in its mining
revenue for the pre‑split part year by working out the amount the original
explorer would have included, then applying its split percentage.
The other new miner works out the amount
to include in its mining revenue for the pre‑split part year by working out the
amount the original miner would have included if no choices were made, then
applying its split percentage.
Suspension day
(6) If there is a *suspension day for the mining
project interest that was chosen under paragraph 130‑10(1)(a):
(a) the *mining project split does not affect:
(i) any extinguishment
under section 130‑15 of *allowance components relating to the mining project
interest; or
(ii) any *rehabilitation tax
offset amounts, for any earlier *MRRT years, relating to the mining project interest; and
(b) that suspension day:
(i) does not affect any
further allowance components relating to a new interest and to that MRRT year
or later MRRT years; but
(ii) is no longer to be
taken into account in determining whether there are any rehabilitation tax
offset amounts, for that MRRT year or any later MRRT years, relating to a new
interest.
Note: The new miner may make a suspension day choice
in the circumstances set out in Division 130.
Exception for new miner that is the same entity as
original miner
(7) If a new miner in relation to a *mining project
split is the same *entity
as the original miner:
(a) a choice that would otherwise be
disregarded under subsection (5) in working out an amount for that new
miner is not disregarded; and
(b) paragraph (6)(b) does not
apply in relation to the new interest that that new miner has.
Note: This subsection does not affect the operation
of subsection (5) and paragraph (6)(b) for a new miner that is not
the original miner.
125‑15
Meaning of split percentage
(1) The split percentage for a
new interest a miner has just after a *mining project split is the percentage that best
reflects a reasonable approximation of the *market value of the new interest,
expressed as a percentage of the sum of the market values of all the new
interests arising from the split.
(2) The *market values mentioned in subsection (1)
are those values just after the *mining project split to which the new interest relates.
(3) To avoid doubt, the sum of the *split percentages
for the new interests must equal 100%.
125‑20
Effect of transferred property
(1) This section applies if:
(a) any property, or any legal or
equitable right that is not property, (the transferred property)
is transferred to a new miner under the *mining project split; and
(b) the original miner used the
transferred property in *mining operations for the mining project interest; and
(c) the transferred property:
(i) gave rise to an amount
of *mining
expenditure for the original miner, or another miner who preceded the original
miner, in relation to the mining project interest; or
(ii) is, or may become, a *starting base
asset, in relation to the mining project interest.
(2) Despite section 30‑40, no amount is
included in the original miner’s *mining revenue for the mining project interest in relation
to any part of the consideration for the transfer that relates to the transferred
property.
(3) For the new miner, any part of the
consideration for the transfer that relates to the transferred property is
taken, for the purposes of section 35‑35, to be expenditure relating to
the acquisition of the mining project interest.
(4) To avoid doubt, the *mining project
split, and the transfer of the transferred property, is not an event or
circumstance giving rise to an adjustment under Division 160.
Note: Events or circumstances happening after the
split may give rise to an adjustment under Division 160, for instance if
the new miner uses the transferred property in relation to the mining project
interest to a greater or lesser extent than the original miner.
125‑25
Effect of MRRT liability from earlier years on rehabilitation tax offset
amounts
For the purposes of section 225‑15,
only a proportion, worked out on a reasonable basis, of an *MRRT liability, of
the original miner or any other miner, for the mining project interest for an *MRRT year before
the year in which a *mining
project split happens, is taken to have been paid in relation to a new
interest.
Note: The original miner is required to give the new
miner the information it needs to work out the amount of a rehabilitation tax offset:
see Division 121 in Schedule 1 to the Taxation Administration Act
1953.
125‑30
Events happening after mining project split
(1) A thing that happens at a time in
relation to an *entity
(the first entity) is taken instead to happen in relation to
another entity, and to have the effect mentioned in paragraph (c) in
relation to a mining project interest the other entity has, if:
(a) the other entity has the interest
at the time as a result of a *mining project split; and
(b) the first entity had the interest
at an earlier time; and
(c) if the first entity still had the
interest, the thing would affect the first entity’s *MRRT liability, *allowance
components or *rehabilitation
tax offsets for the interest.
(2) However, the extent to which the thing
affects the other entity’s *MRRT liability, *allowance components or *rehabilitation tax offsets is reduced to
reflect:
(a) if only one *mining project
split happened in the period from when the first entity last had the interest
until the time the thing happens—the *split percentage relating to that split; or
(b) if 2 or more mining project splits
or *pre‑mining
project splits happened in the period—a percentage worked out by multiplying
the split percentages for each of those splits.
Note 1: The first entity is required to advise the
other entity about the thing that happens: see Division 121 in Schedule 1
to the Taxation Administration Act 1953.
Note 2: A mining project transfer or pre‑mining project
transfer may also have happened in the period, but will not affect the extent
worked out under subsection (2).
Example: After a mining project split happens, the
original miner makes an initial supply of taxable resources that would have
given rise to an amount of mining revenue for the miner if it still had the
interest. Instead, each new miner is taken to have made the initial supply, and
includes its split percentage of the amount in mining revenue for the interest.
125‑35
Start of mining venture taken to be mining project split
(1) The start of a *mining venture that gives rise to a
mining project interest under subsection 15‑5(1) is taken to be a *mining project
split of a mining project interest that existed, just before that start, under
subsection 15‑5(4) if:
(a) the mining venture relates to some
(but not all) of the *taxable
resources to which the mining project interest under subsection 15‑5(4) related;
or
(b) the mining venture relates to all
of those resources, and more than one entity has a mining project interest in
relation to the mining venture at the time it starts.
Example: VioletCo has a mining project interest under
subsection 15‑5(4) as a result of being granted a production right entitling it
to extract iron ore from an area in which 2 bodies of ore have been identified.
VioletCo and DiggerCo later start a mining
venture, in which they both participate, to extract one of the bodies of ore.
There is no mining venture in relation to the other body of ore.
The start of this mining venture gives
rise to mining project interests for VioletCo and DiggerCo under subsection 15‑5(1).
There is taken to be a mining project split of the mining project interest
VioletCo had under subsection 15‑5(4) after which there are 3 new interests:
the 2 interests in the mining venture and VioletCo’s reduced residual interest
under subsection 15‑5(4). VioletCo is the original miner and both VioletCo and
DiggerCo are the new miners.
One effect of this is that each of the new
interests is taken to be a continuation of the mining project interest VioletCo
had under subsection 15‑5(4) (the original interest).
(2) To avoid doubt, the start of a *mining venture may
be taken to be a *mining
project split for more than one mining project interest, if the start of the
mining venture has the effect mentioned in paragraph (1)(a) or (b) in
relation to more than one mining project interest.
Division 130—Winding down mining project interests
Guide to Division 130
130‑1 What
this Division is about
From the suspension day for a mining
project interest (a day primarily related to the ceasing of commercial
production), allowance components are extinguished unless they can be applied
in relation to the current year.
Table of sections
Operative provisions
130‑5 Object of this Division
130‑10 Suspension days for mining project
interests
130‑15 Extinguishing allowance components
130‑20 Restarting commercial production
Operative provisions
130‑5
Object of this Division
The object of this Division is to
provide for the winding down of mining project interests, and to ensure that allowance
components cannot be carried forward when a mining project interest is winding
down.
130‑10
Suspension days for mining project interests
(1) The suspension day for a
mining project interest is the earliest of the following:
(a) the day, occurring after the day
on which commercial production of *taxable resources from the *project area for the mining project
interest ceased, chosen by the miner who has the mining project interest;
(b) the day occurring 10 years after
the day on which commercial production of taxable resources from the project
area for the mining project interest most recently took place;
(c) the *termination day for the mining project
interest.
(2) A miner may choose the *suspension day for
a mining project interest that the miner has if commercial production of *taxable resources
from the *project
area for the mining project interest has ceased.
Note: Division 119 in Schedule 1 to the Taxation
Administration Act 1953 is about choices under the MRRT law.
(3) Without limiting the matters that may be
taken into account in determining, for the purposes of this section, whether
commercial production of *taxable resources from the *project area takes place, the following
are to be taken into account:
(a) past and current production of
taxable resources from the project area;
(b) past and current expenditure
relating to the *upstream
mining operations for the mining project interest;
(c) the extent to which mining
equipment used in carrying on those upstream mining operations has been
decommissioned.
(4) The choice must be given to the
Commissioner.
130‑15
Extinguishing allowance components
If the *suspension day for a mining project
interest happens in a particular *MRRT year (the suspension year), an *allowance
component relating to the mining project interest:
(a) is extinguished if it relates to
the suspension year or an earlier MRRT year, except to the extent that it is applied
in working out, for the suspension year, an *MRRT allowance for that mining project
interest or any other mining project interest; and
(b) is extinguished if it relates to a
later MRRT year, except to the extent that it is applied in working out, for
that later MRRT year, an MRRT allowance for that mining project interest or any
other mining project interest.
Example: The suspension day for a mining project interest happens
in the 2015‑16 year. For that year, the mining profit for the mining project
interest is $15 million, and there is a royalty credit of $5 million. From the
previous year, the only allowance component is a mining loss that, in the 2015‑16
year, is $12 million.
The royalty credit is applied as a royalty
allowance of $5 million to reduce the mining profit, and is not extinguished
under this section.
The mining loss from the previous year is
applied as a mining loss allowance of $10 million, but the remaining $2 million
of the mining loss is extinguished under this section (unless it can be used as
a transferred mining loss allowance, relating to the suspension year, for
another mining project interest).
130‑20
Restarting commercial production
(1) If, after the *suspension day for a mining project
interest happens, the miner that has the interest is carrying on *upstream mining
operations for the interest with a view to restarting commercial production of *taxable resources
from the *project
area for the interest, for the purposes of the *MRRT law:
(a) the interest (the original
interest) is taken to cease to exist; and
(b) a separate mining project interest
relating to extraction of taxable resources from the project area is taken to
come into existence at that time.
(2) To avoid doubt, the original interest
ceasing to exist and the separate mining project interest coming into existence
do not constitute a *mining
project transfer.
Division 135—Ending mining project interests
Guide to Division 135
135‑1
What this Division is about
The last entity to have a particular
mining project interest is treated, for the purpose of accounting for MRRT, as
continuing to have the mining project interest after the termination day.
Table of sections
Operative provisions
135‑5 The termination day for a mining project
interest
135‑10 The effect of renewing or changing
production rights
135‑15 The effect of renewing or changing mining
ventures
135‑20 The effect of mining project transfers and
mining project splits
135‑25 Continuation of obligations etc. after the
termination day
Operative provisions
135‑5
The termination day for a mining project interest
The termination day for a
mining project interest is the day on which there is no longer any entity that
has the mining project interest.
Note 1: For when an entity has a mining project
interest, see section 15‑5.
Note 2: If the suspension day for the mining project
interest has not already happened, the termination day will also be the
suspension day under section 130‑10.
135‑10
The effect of renewing or changing production rights
(1) A change in, or a renewal of, the *production right
to which a mining project interest relates does not cause the *termination day
for the mining project interest to happen.
(2) However, if the change in, or the renewal
of, the *production
right would otherwise result in the mining project interest covering an
additional area:
(a) the *project area for the mining project
interest does not include that additional area; and
(b) to avoid doubt, the additional
area is the project area for another mining project interest.
Note: The other mining project interest may be
combined with the original mining project interest under Division 115.
135‑15
The effect of renewing or changing mining ventures
A change in, or a renewal of, a *mining venture
relating to a mining project interest does not cause the *termination day
for the mining project interest to happen.
135‑20
The effect of mining project transfers and mining project splits
A *mining project transfer or a *mining project
split relating to a mining project interest does not cause the *termination day
for the mining project interest to happen.
Note 1: Under subsection 120‑10(2), the mining project
interest after a mining project transfer is a continuation of the mining
project interest before the transfer.
Note 2: Under subsection 125‑10(2), the mining project
interests after a mining project split are a continuation of the mining project
interest before the split.
135‑25
Continuation of obligations etc. after the termination day
(1) After the *termination day for a mining project
interest, the last *entity
to have had the mining project interest is taken, for the purposes of the *MRRT law, to
continue to have the mining project interest:
(a) for the whole of the remainder of
the *MRRT
year in which the termination day happens; and
(b) for the whole of any later MRRT
year.
(2) If the *entity is not a miner during a period in
which this section applies to the entity after the *termination day, this section applies as
if the entity continues to be a miner during that period.
Part 4‑2—Pre‑mining project interests
Division 140—Pre‑mining profits and royalty credits
Table of Subdivisions
Guide to Division 140
140‑A Pre‑mining profits
140‑B Pre‑mining royalty credits
Guide to Division 140
140‑1
What this Division is about
If an entity’s pre‑mining revenue for a
pre‑mining project interest exceeds its pre‑mining expenditure, the excess is
usually treated as a mining profit for a mining project interest.
Mining royalties can give rise to
royalty credits for a pre‑mining project interest.
Subdivision 140‑A—Pre‑mining profits
Table of sections
140‑5 Pre‑mining profits
140‑10 Treatment of pre‑mining profits—general
rule
140‑15 Effect on allowance components for other
mining project interests
140‑20 Treatment of pre‑mining profits—mining
project interest originating from the pre‑mining project interest
140‑5
Pre‑mining profits
(1) A pre‑mining profit arises
for an *MRRT
year if:
(a) during the year, an *entity *holds a *pre‑mining project
interest; and
(b) the entity’s *pre‑mining revenue
for the interest for the year exceeds the entity’s *pre‑mining expenditure for the interest
for the year.
(2) In that year, the amount of the *pre‑mining profit
is the amount of the excess.
140‑10
Treatment of pre‑mining profits—general rule
(1) The *entity may be liable, under this section,
to pay MRRT, for the *MRRT
year, in relation to the *pre‑mining profit.
(2) For the purpose only of working out the
amount (if any) of that MRRT, the *MRRT law has effect as if:
(a) the *pre‑mining project interest were, in the *MRRT year and any
earlier MRRT years, a mining project interest that the *entity has; and
(b) the *pre‑mining profit were a *mining profit for
that mining project interest for the MRRT year; and
(c) subsection 70‑20(1) does not apply
for the purpose of determining whether a *pre‑mining loss can be applied in working
out a *pre‑mining
loss allowance for that mining project interest for the MRRT year or any
earlier MRRT year; and
(d) no *mining loss or *starting base loss arises, or has
arisen for that mining project interest for the MRRT year or any earlier MRRT
year; and
(e) that mining project interest were
not *integrated
with any other mining project interest; and
(f) the *exploration right to which the pre‑mining
project interest relates were a *production right; and
(g) in a case where the entity is not
a miner—the entity were, in the MRRT year and any earlier MRRT years, a miner.
Note 1: The following MRRT allowances could be
available for the pre‑mining project interest:
(a) royalty allowances;
(b) pre‑mining loss allowances (but not for the current
year, because the pre‑mining profit precludes a pre‑mining loss for the current
MRRT year);
(c) transferred pre‑mining loss allowances;
(d) transferred mining loss allowances.
Note 2: Paragraph (2)(e) precludes the entity from
having any transferred royalty allowances, and also precludes the pre‑mining
project interest from being treated as combined with any mining project
interest.
Example: An entity holds a pre‑mining project interest
that, in the 2015‑16 MRRT year has a pre‑mining profit of $50 million. It also
has a royalty credit for the MRRT year of $5 million, based on royalties paid
for resources the entity sold. The entity also holds another pre‑mining project
interest that, in the MRRT year has a pre‑mining loss of $20 million.
The pre‑mining profit is taken to be a
mining profit of $50 million, but the entity has a royalty allowance of $5
million and a transferred pre‑mining loss allowance of $20 million. Under
section 10‑5, the entity’s MRRT liability is:
However, the amount the entity must pay is
reduced to zero by the low profit offset under section 45‑5.
140‑15
Effect on allowance components for other mining project interests
If:
(a) an entity’s liability to pay MRRT
in relation to a *pre‑mining
project interest is worked out under section 140‑10; and
(b) in working out the liability under
that section, an *allowance
component is wholly or partly applied in relation to the pre‑mining project
interest as if it were a mining project interest;
the allowance component is taken, for the purposes of this
Act, to be applied to the same extent in relation to a mining project interest.
140‑20
Treatment of pre‑mining profits—mining project interest originating from the
pre‑mining project interest
If the *entity has a mining project interest that
*originates,
during an *MRRT
year, from a *pre‑mining
project interest for which the entity has a *pre‑mining profit for the MRRT year:
(a) the pre‑mining profit is included
in the entity’s *mining
revenue of the mining project interest for the MRRT year; and
(b) section 140‑10 does not
apply.
Example: A miner holds a pre‑mining project interest that,
in the 2015‑16 MRRT year has a pre‑mining profit of $10 million. During the
MRRT year, a mining project interest originates from the pre‑mining project
interest. The mining revenue and mining expenditure for the mining project
interest are $60 million and $100 million respectively.
Under section 75‑20, the miner’s
mining loss for the mining project interest for the MRRT year is:
Subdivision 140‑B—Pre‑mining royalty credits
Table of sections
140‑25 Pre‑mining royalty credits
140‑25
Pre‑mining royalty credits
(1) If an *entity that *held the *pre‑mining project interest at any time
incurred a liability that would, to any extent, have given rise, under section 60‑20,
to a *royalty
credit if:
(a) the pre‑mining project interest
were a mining project interest that the entity had; and
(b) the *exploration right to which the pre‑mining
project interest relates were a *production right to which the mining project interest
relates; and
(c) in a case where the entity is not
a miner—the entity were a miner;
treat the liability, to that extent, as giving rise to a
royalty credit for the pre‑mining project interest.
(2) Work out the amount of the *royalty credit under
Division 60 as if:
(a) the *pre‑mining project interest were a mining
project interest that the *entity had; and
(b) in a case where the entity is not
a miner—the entity were a miner.
Note: Recoupment of amounts of pre‑mining royalty
credits may give rise to an excess royalty recoupment mentioned in subsection
60‑30(2) that would be included in the entity’s pre‑mining revenue because of
subsection 70‑40(2).
(3) The *royalty credit arises at the time the *entity incurs the
liability, and relates to the *MRRT year in which it arises.
(4) To avoid doubt, a *royalty credit that arises for the *pre‑mining project
interest for the *MRRT
year cannot be applied in working out a *transferred royalty allowance for a
mining project interest for any MRRT year.
Division 145—Transferring pre‑mining project interests
Guide to Division 145
145‑1
What this Division is about
If a pre‑mining project interest is
transferred, in most respects the new explorer takes over from the original
explorer in relation to MRRT matters.
Table of sections
Operative provisions
145‑5 Object of this Division
145‑10 Continuation of pre‑mining project
interest
145‑15 Effects of pre‑mining project transfer
145‑20 Effect of transferred property
145‑25 Events happening after pre‑mining project
transfer
145‑30 Pre‑mining project transfer when mining
project interest originates
Operative provisions
145‑5 Object
of this Division
The object of this Division is to ensure
that, if a *pre‑mining
project interest is transferred:
(a) consistent with the MRRT being a
project‑based tax, matters relevant to the MRRT that are connected with the
interest before the transfer remain connected with the interest after the
transfer; and
(b) the *MRRT liability for the interest for the
part of the *MRRT
year before the transfer attaches to the explorer who has the interest after
the transfer, and not to the explorer who had the interest before the transfer.
145‑10
Continuation of pre‑mining project interest
(1) The *pre‑mining project interest (the new
interest) that an *entity (the new explorer) *holds just after a
*pre‑mining
project transfer is taken to be a continuation of the pre‑mining project
interest (the original interest) an entity (the original
explorer) held just before the transfer.
Note: This means, for example, that:
(a) the pre‑mining project interest retains the history of
when it started, and of the entities who have held the interest at various
times; and
(b) a choice made, under Division 85, of the
valuation approach for the pre‑mining project interest continues to have effect.
Meaning of pre‑mining project transfer
(2) A pre‑mining project transfer
happens if:
(a) an *arrangement that has the effect of
transferring the whole of the interest comprising a *pre‑mining project interest from
one *entity
to a single other entity comes into force; and
(b) the pre‑mining project interest
the other entity starts to *hold covers the same *project area.
145‑15
Effects of pre‑mining project transfer
Liability for MRRT moves with interest
(1) Any MRRT that would otherwise be payable
by the original explorer in relation to a *pre‑mining project interest, in relation
to the part of the *MRRT
year before a *pre‑mining
project transfer happens (the pre‑transfer part year), is payable
instead, in accordance with this Division:
(a) by the new explorer; and
(b) in the MRRT year for the new
explorer in which the transfer happens.
Note 1: The MRRT liability for the new explorer for the
pre‑mining project interest is worked out in accordance with this Division. It
may be more, or less, than the liability the original explorer would have had,
depending on circumstances such as choices, offsets and available allowances.
Note 2: For any period after the transfer that the new
explorer has the interest, its liability for MRRT (if any) is worked out under
the ordinary rules.
MRRT amounts move with interest
(2) For the purposes of the application of
the *MRRT law
in the *MRRT
year in which the transfer happens or a later MRRT year, each of the following
amounts that, apart from this Division, would be an amount for the original
explorer and the original interest is instead an amount for the new explorer
and the new interest:
(a) an amount included in *pre‑mining revenue
for the pre‑transfer part year or an earlier MRRT year;
(b) an amount included in *pre‑mining
expenditure for the pre‑transfer part year or an earlier MRRT year;
(c) an amount of a *royalty credit
arising for the original interest in the pre‑transfer part year;
(d) an amount of an *allowance
component arising in an earlier MRRT year.
Note: If the original explorer’s MRRT year starts
before the new explorer’s MRRT year, the effect of this provision is that
amounts from before the start of the new explorer’s MRRT year are taken into
account for the new explorer in the new explorer’s MRRT year.
Example: The original explorer has a substituted
accounting period of 12 months from 1 April to 31 March. The new
explorer has an MRRT year of 1 July to 30 June. The transfer happens
on 1 July. The amounts covered by subsection (2) are all amounts that
would be amounts for the original explorer for the period from 1 April to 30 June,
so these will be amounts for the new explorer for its MRRT year 1 July to
30 June.
Choices to use the simplified MRRT method
(3) Despite subsection (2), in working
out under that subsection an amount for the *MRRT year in which the transfer happens
or a later MRRT year:
(a) a choice under Division 200
to use the simplified MRRT method for that year made by the new explorer is
taken into account; but
(b) a choice of that kind made by the
original explorer is disregarded.
Note: The effect of a simplified MRRT method choice
made for a year before the transfer year is not affected: all allowance
components are extinguished (see Division 200).
Example: An original explorer had made no choices in the
MRRT year in which a pre‑mining project transfer happens. The new explorer
chooses to use the simplified MRRT method.
The new explorer’s MRRT liability for the
pre‑mining project interest (and all other interests it has) is zero.
145‑20
Effect of transferred property
(1) This section applies if:
(a) any property, or any legal or
equitable right that is not property, (the transferred property)
is transferred to the new explorer under the *pre‑mining project transfer; and
(b) the original explorer used the
transferred property in *pre‑mining project operations for the *pre‑mining project
interest; and
(c) the transferred property:
(i) gave rise to an amount
of *pre‑mining
expenditure for the original explorer, or another explorer who preceded the
original explorer, in relation to the pre‑mining project interest; or
(ii) is, or may become, a *starting base
asset, in relation to a mining project interest that *originates from the pre‑mining
project interest.
(2) Despite section 30‑40, no amount is
included in the original explorer’s *pre‑mining revenue for the *pre‑mining project interest in relation
to any part of the consideration for the transfer that relates to the transferred
property.
(3) For the new explorer, any part of the
consideration for the transfer that relates to the transferred property is
taken, for the purposes of section 35‑35, to be expenditure relating to
the acquisition of the pre‑mining project interest.
(4) To avoid doubt, the *pre‑mining project
transfer, and the transfer of the transferred property, is not an event or
circumstance giving rise to an adjustment under Division 160.
Note: Events or circumstances happening after the
transfer may give rise to adjustment under Division 160, for instance if
the new explorer uses the transferred property in relation to the pre‑mining
project interest to a greater or lesser extent than the original explorer.
145‑25
Events happening after pre‑mining project transfer
(1) A thing that happens at a particular time
in relation to an *entity
(the first entity) is taken instead to happen in relation to
another entity, and to have the effect mentioned in paragraph (c) in
relation to a *pre‑mining
project interest the other entity *holds, if:
(a) the other entity holds the
interest at the time as a result of one or more *pre‑mining project transfers; and
(b) the first entity held the interest
at an earlier time; and
(c) if the first entity still held the
interest, the thing would affect any of the following amounts (pre‑mining
amounts) for the first entity:
(i) *pre‑mining revenue;
(ii) *pre‑mining
expenditure;
(iii) an *allowance
component;
(iv) a *rehabilitation tax
offset.
(2) However, if one or more *pre‑mining project
splits has happened in relation to the *pre‑mining project interest in the period from
when the first *entity
last *held the
interest until the time the thing happens:
(a) the thing is taken to happen in
relation to the other entity in relation to the interest; but
(b) the extent to which the thing
affects the other entity’s pre‑mining amounts is reduced to reflect:
(i) if only one pre‑mining
project split happened in the period—the *split percentage relating to that split;
or
(ii) if 2 or more pre‑mining
project splits happened in the period—a percentage worked out by multiplying
the split percentages for each of those splits.
Note: The first entity is required to advise the
other entity about the thing that happens: see Division 121 in Schedule 1
to the Taxation Administration Act 1953.
Example: After a pre‑mining project transfer happens, the
original explorer makes an initial supply of taxable resources that would have
given rise to an amount of pre‑mining revenue for the explorer if it still held
the interest. Instead, the new explorer is taken to have made the initial
supply, and includes the amount in pre‑mining revenue for the interest.
145‑30
Pre‑mining project transfer when mining project interest originates
(1) If a single mining project interest *originates from a *pre‑mining project
interest and relates to the whole of the *project area for the pre‑mining project
interest:
(a) the origination is taken to be a *pre‑mining project
transfer; and
(b) for the purposes of paragraph (a),
the *MRRT law
applies:
(i) in the same way in
relation to the mining project interest as it applies in relation to a pre‑mining
project interest that exists after a pre‑mining project transfer; and
(ii) in the same way in
relation to the miner that has the mining project interest just after it so
originates as it applies in relation to an *entity that *holds a pre‑mining project interest after
a pre‑mining project transfer.
(2) In applying this Division for the
purposes of subsection (1), disregard subsection 145‑15(3).
(3) If, because of the application of this
Division, a mining project interest has, for the part of the *MRRT year before
it *originates
from a *pre‑mining
project interest:
(a) *pre‑mining revenue that exceeds *pre‑mining
expenditure—the excess is treated as *pre‑mining profit of the pre‑mining project
interest for the MRRT year; or
(b) pre‑mining expenditure that
exceeds pre‑mining revenue—the excess is treated as a *pre‑mining loss of the pre‑mining
project interest for the MRRT year.
Note: For the treatment of pre‑mining profits, see
section 140‑20. For the treatment of pre‑mining losses, see Divisions 70
and 95.
Division 150—Splitting pre‑mining project interests
150‑1
Guide to Division 150
If a pre‑mining project interest is
split, in most respects the new explorers take over from the original explorer
in relation to MRRT matters, each to an extent appropriate to their share in
the split.
Table of sections
Operative provisions
150‑5 Object of this Division
150‑10 Continuation of pre‑mining project
interest
150‑15 Effects of pre‑mining project split
150‑20 Effect of transferred property
150‑25 Effect of MRRT liability from earlier
years on rehabilitation tax offset amounts
150‑30 Events happening after pre‑mining project
split
150‑35 Pre‑mining project split when mining
project interest originates
Operative provisions
150‑5
Object of this Division
The object of this Division is to ensure
that, if a *pre‑mining
project interest is split:
(a) consistent with the MRRT being a
project‑based tax, matters relevant to the MRRT that are connected with the
interest before the split remain connected (to the appropriate extents) with
the split interests after the split; and
(b) the *MRRT liability for the interest for the
part of the *MRRT
year before the split attaches (to the appropriate extents) to the explorers
who have the split interests after the split.
150‑10
Continuation of pre‑mining project interest
(1) Each *pre‑mining project interest (a new
interest) that an *entity (a new explorer) *holds just after a
*pre‑mining
project split is taken to be a continuation of the pre‑mining project interest (the
original interest) an entity (the original explorer)
held just before the split.
Note: This means, for example, that:
(a) each split interest retains the history of when the
pre‑mining project interest started, and of the entities who have held the
interest at various times; and
(b) a choice made, under Division 85, of the
valuation approach for the pre‑mining project interest continues to have
effect.
Meaning of pre‑mining project split
(2) A pre‑mining project split
happens if:
(a) an *arrangement comes into force that has the
effect of transferring, from one *entity to 2 or more other entities, the whole of a *pre‑mining project
interest; or
(b) an arrangement comes into force
that has the effect of transferring, from one entity to one or more other
entities, a part of a pre‑mining project interest; or
(c) under an *Australian law, the *exploration right
to which a pre‑mining project interest relates is split into 2 or more
exploration rights.
Note: A new explorer may be the same entity as the
original explorer, in the situations described in paragraphs (b) and (c).
150‑15
Effects of pre‑mining project split
Liability for MRRT moves with interest
(1) Any MRRT that would otherwise be payable
by the original explorer in relation to a *pre‑mining project interest in relation
to the part of the *MRRT
year before a *pre‑mining
project split happens (the pre‑split part year) is payable
instead, in accordance with this Division:
(a) by each new explorer; and
(b) in the MRRT year for a new
explorer in which the split happens.
Note 1: The MRRT liability for each split interest is
worked out in accordance with this Division. The sum total of those liabilities
may be more, or less, than the liability the original explorer would have had,
depending on circumstances such as choices, offsets and available allowances.
Note 2: For any period after the split that a new
explorer has the interest, its liability for MRRT (if any) is worked out under
the ordinary rules.
MRRT amounts move with interest
(2) For the purposes of the application of
the *MRRT law
in the *MRRT
year in which the split happens or a later MRRT year, each of the following
amounts that, apart from this Division, would be an amount for the original
explorer and the original interest is instead, to the extent of a new
interest’s *split
percentage, an amount for the new explorer and the new interest:
(a) an amount included in *pre‑mining revenue
for the pre‑split part year or an earlier MRRT year;
(b) an amount included in *pre‑mining
expenditure for the pre‑split part year or an earlier MRRT year;
(c) an amount of a *royalty credit
arising for the original interest in the pre‑split part year;
(d) an amount of an *allowance
component for an earlier MRRT year.
Choices to use the simplified MRRT method
(3) Despite subsection (2), in working
out under that subsection an amount for the *MRRT year in which the split happens or a
later MRRT year:
(a) a choice under Division 200
to use the simplified MRRT method for that year made by the new explorer is
taken into account; but
(b) a choice of that kind made by the
original explorer is disregarded.
Note 1: The effect of a simplified MRRT method choice
made for a year before the split year is not affected: all allowance components
are extinguished (see Division 200).
Note 2: If the original explorer’s MRRT year starts
before the new explorer’s MRRT year, the effect of this provision is that, in
working out amounts under subsection (2), a choice made by the new
explorer for the new explorer’s MRRT year affects amounts from before the start
of that MRRT year.
Exception for new miner that is the same entity as
original miner
(4) If a new explorer in relation to a *pre‑mining project
split is the same entity as the original explorer, a choice that would
otherwise be disregarded under subsection (3) in working out an amount for
that new explorer is not disregarded.
Note: This subsection does not affect the operation
of subsection (3) for a new explorer that is not the original explorer.
Meaning of split percentage
(5) The split percentage for a
new interest an *entity
*holds just
after a *pre‑mining
project split is the percentage that best reflects a reasonable approximation
of the *market
value of the new interest, expressed as a percentage of the sum of the market
values of all the new interests arising from the split.
(6) The *market values mentioned in subsection (5)
are those values just after the *pre‑mining project split to which the new interest relates.
(7) To avoid doubt, the sum of the *split percentages
for the new interests must equal 100%.
150‑20
Effect of transferred property
(1) This section applies if:
(a) any property, or any legal or
equitable right that is not property, (the transferred property)
is transferred to a new explorer under the *pre‑mining project split; and
(b) the original explorer used the
transferred property in *pre‑mining project operations for the *pre‑mining project
interest; and
(c) the transferred property:
(i) gave rise to an amount
of *pre‑mining
expenditure for the original explorer, or another explorer who preceded the
original explorer, in relation to the pre‑mining project interest; or
(ii) is, or may become, a *starting base
asset, in relation to a mining project interest that *originates from the pre‑mining
project interest.
(2) Despite section 30‑40, no amount is
included in the original explorer’s *pre‑mining revenue for the *pre‑mining project interest in relation
to any part of the consideration for the transfer that relates to the transferred
property.
(3) For the new explorer, any part of the
consideration for the transfer that relates to the transferred property is
taken, for the purposes of section 35‑35, to be expenditure relating to
the acquisition of the *pre‑mining project interest.
(4) To avoid doubt, the *pre‑mining project
split, and the transfer of the transferred property, is not an event or
circumstance giving rise to an adjustment under Division 160.
Note: Events or circumstances happening after the
split may give rise to adjustment under Division 160, for instance if the
new explorer uses the transferred property in relation to the pre‑mining
project interest to a greater or lesser extent than the original explorer.
150‑25
Effect of MRRT liability from earlier years on rehabilitation tax offset amounts
For the purposes of section 225‑20,
only a proportion, worked out on a reasonable basis, of an *MRRT liability, of
the original explorer or any other *entity, for the *pre‑mining project interest for an *MRRT year before the year in which
a *pre‑mining
project split happens, is taken to have been paid in relation to a new
interest.
Note: The original explorer is required to give the
new explorer the information it needs to work out the amount of a
rehabilitation offset: see Division 121 in Schedule 1 to the Taxation
Administration Act 1953.
150‑30
Events happening after pre‑mining project split
(1) A thing that happens at a time in
relation to an *entity
(the first entity) is taken instead to happen in relation to
another entity, and to have the effect mentioned in paragraph (c) in
relation to a *pre‑mining
project interest the other entity *holds, if:
(a) the other entity holds the
interest at the time as a result of one or more *pre‑mining project splits; and
(b) the first entity held the interest
at an earlier time; and
(c) if the first entity still held the
interest, the thing would affect any of the following amounts (pre‑mining
amounts) for the first entity:
(i) *pre‑mining revenue;
(ii) *pre‑mining
expenditure;
(iii) an *allowance
component;
(iv) a *rehabilitation tax
offset.
(2) However, the extent to which the thing
affects the other entity’s pre‑mining amounts is reduced to reflect:
(a) if only one *pre‑mining project
split happened in the period from when the first entity last *held the interest
until the time the thing happens—the *split percentage relating to that split; or
(b) if 2 or more pre‑mining project
splits happened in the period—a percentage worked out by multiplying the split
percentages for each of those splits.
Note 1: The first entity is required to advise the
other entity about the thing that happens: see Division 121 in Schedule 1
to the Taxation Administration Act 1953.
Note 2: A mining project transfer may also have
happened in the period, but will not affect the extent worked out under subsection (2).
Example: After a pre‑mining project split happens, the
original explorer makes an initial supply of taxable resources that would have
given rise to an amount of pre‑mining revenue for the explorer if it still held
the interest. Instead, each new explorer is taken to have made the initial
supply, and includes its split percentage of the amount in pre‑mining revenue
for the interest.
150‑35
Pre‑mining project split when mining project interest originates
(1) If, just after a mining project interest *originates from a *pre‑mining project
interest, there are 2 or more interests (whether mining project interests or
pre‑mining project interests) (the new interests) relating to the
*project area
for the pre‑mining project interest:
(a) the origination is taken to be a *pre‑mining project
split; and
(b) for the purposes of paragraph (a),
the *MRRT law
applies:
(i) in the same way in
relation to each new interest (whether it is a pre‑mining project interest or a
mining project interest) as it applies in relation to a pre‑mining project
interest that exists after a pre‑mining project split; and
(ii) in the same way in
relation to each *entity
that *holds a
new interest as it applies in relation to an entity that holds a pre‑mining
project interest after a pre‑mining project split.
(2) If, because of the application of this
Division, a mining project interest has, for the part of the *MRRT year before
it *originates
from a *pre‑mining
project interest:
(a) *pre‑mining revenue that exceeds *pre‑mining
expenditure—the excess is treated as *pre‑mining profit of the pre‑mining project
interest for the MRRT year; or
(b) pre‑mining expenditure that
exceeds pre‑mining revenue—the excess is treated as a *pre‑mining loss of the pre‑mining
project interest for the MRRT year.
Note: For the treatment of pre‑mining profits, see
section 140‑20. For the treatment of pre‑mining losses, see Divisions 70
and 95.
Division 155—Ending pre‑mining project interests
Guide to Division 155
155‑1
What this Division is about
The last entity to have a particular pre‑mining
project interest is treated, for the purpose of accounting for MRRT, as
continuing to have the pre‑mining project interest after the termination day.
Table of sections
Operative provisions
155‑5 The termination day for a pre‑mining
project interest
155‑10 The effect of renewing or changing
exploration rights
155‑15 The effect of pre‑mining project transfers
and pre‑mining project splits
155‑20 Continuation of obligations etc. after the
termination day
155‑25 Extinguishing allowance components
Operative provisions
155‑5
The termination day for a pre‑mining project interest
The termination day for a *pre‑mining project
interest is the day on which there is no longer any *entity that *holds the pre‑mining project
interest.
Note: For when an entity holds a pre‑mining project
interest, see Division 250.
155‑10
The effect of renewing or changing exploration rights
(1) A change in, or a renewal of, the *exploration right
to which a *pre‑mining
project interest relates does not cause the *termination day for the pre‑mining
project interest to happen.
(2) However, if the change in, or the renewal
of, the *exploration
right results in the exploration right covering an additional area:
(a) the *project area for the *pre‑mining project
interest does not include that additional area, unless the additional area is
insignificant; and
(b) to avoid doubt, the additional
area is the project area for another pre‑mining project interest, unless the
additional area is insignificant.
(3) In determining, for the purposes of subsection (2),
whether an additional area is insignificant, assume that the additional area
includes any other such additional areas that:
(a) have been included in the *project area for
the *pre‑mining
project interest because of a previous application of subsection (2); and
(b) have not, because of a previous
application of this subsection, prevented another additional area being
included in that project area.
155‑15
The effect of pre‑mining project transfers and pre‑mining project splits
A *pre‑mining project transfer or a *pre‑mining project
split relating to a *pre‑mining
project interest does not cause the *termination day for the pre‑mining project interest to happen.
Note 1: Under section 145‑10, the pre‑mining
project interest after a pre‑mining project transfer is a continuation of the
pre‑mining project interest before the transfer.
Note 2: Under section 150‑10, the pre‑mining
project interests after a pre‑mining project split are a continuation of the
pre‑mining project interest before the split.
155‑20
Continuation of obligations etc. after the termination day
(1) After the *termination day for a *pre‑mining project
interest, the last *entity
to have *held
the pre‑mining project interest is taken, for the purposes of the *MRRT law, to
continue to hold the pre‑mining project interest:
(a) for the whole of the remainder of
the *MRRT
year in which the termination day happens; and
(b) for the whole of any later MRRT
year.
(2) This section does not apply if the *termination day happens
because a mining project interest *originates from the *pre‑mining project interest.
155‑25
Extinguishing allowance components
(1) If the *termination day for a *pre‑mining project
interest happens in a particular *MRRT year, an *allowance component relating to the pre‑mining project
interest:
(a) is extinguished if it relates to
that MRRT year or an earlier MRRT year, except to the extent that it is applied
in working out, for that MRRT year:
(i) in relation to the pre‑mining
project interest, an amount, for the purposes of section 140‑10,
corresponding to an *MRRT
allowance; or
(ii) an MRRT allowance for
any mining project interest; and
(b) is extinguished if it relates to a
later MRRT year, except to the extent that it is applied in working out, for
that later MRRT year:
(i) in relation to the pre‑mining
project interest, an amount, for the purposes of section 140‑10,
corresponding to an *MRRT
allowance; or
(ii) an MRRT allowance for
any mining project interest.
(2) This section does not apply if the *termination day
happens because a mining project interest *originates from the *pre‑mining project
interest.
Part 4‑3—Adjusting MRRT liabilities
Division 160—Adjustments to revenue and expenditure of project interests
Guide to Division 160
160‑1
What this Division is about
If there is a change in the
circumstances affecting the amount of a previous item of mining revenue, mining
expenditure, pre‑mining revenue or pre‑mining expenditure, an adjustment may be
made so that, in net terms, the correct result is achieved.
Table of sections
Operative provisions
160‑5 Object of this Division
160‑10 Mining adjustments
160‑15 Effect of mining adjustments on mining
revenue, mining expenditure etc.
Operative provisions
160‑5
Object of this Division
The object of this Division is to ensure
that an appropriate adjustment is made to:
(a) *mining revenue or *mining expenditure if there is a
change in the circumstances determining the amount of a previous item of mining
revenue or mining expenditure for a mining project interest; or
(b) *pre‑mining revenue or *pre‑mining
expenditure if there is a change in the circumstances determining the amount of
a previous item of pre‑mining revenue or pre‑mining expenditure for a *pre‑mining project
interest.
160‑10
Mining adjustments
(1) An event or circumstance gives rise to an
adjustment under this Division (a mining adjustment) for the *MRRT year in which
the event or circumstance happens if:
(a) due to assumptions or estimates
that were made, the event or circumstance was not taken into account in
relation to the inclusion (or non‑inclusion) of an amount (the original
amount) in:
(i) *mining revenue or *mining expenditure
for a mining project interest; or
(ii) *pre‑mining revenue
or *pre‑mining
expenditure for a *pre‑mining
project interest; and
(b) it becomes more likely than not
that those assumptions or estimates are incorrect; and
(c) taking the event or circumstance
into account, as if they formed part of the circumstances that gave rise to the
original amount, would have led to a different result in relation to the
original amount.
Note: Subsection 160‑15(3) modifies the application
of this section if a previous adjustment has been made under this Division in
relation to the original amount.
(2) The amount of the mining adjustment is
the amount of that difference.
(3) Without limiting subsection (1), the
event or circumstance may be:
(a) a change in the extent to which an
asset is used for a particular purpose; or
(b) the whole or part of a debt being
written off as bad, or the whole or part of an amount written off as bad being
recovered.
(4) Without limiting subsection (1), the
amount of the mining adjustment may be greater than the original amount.
Example: An original amount of $48 million is included in
a miner’s mining expenditure for an MRRT year. If, taking into account a
circumstance or event that happens in a later MRRT year, the original amount
would have instead been an amount of $12 million included in the miner’s mining
revenue for the MRRT year, the difference is $60 million.
160‑15
Effect of mining adjustments on mining revenue, mining expenditure etc.
(1) The table has effect for the *MRRT year in which
the mining adjustment arises:
|
Effect of mining
adjustments
|
|
Item
|
Column 1
If the original amount
was an amount included (or not included) in:
|
Column 2
... and if the
circumstance or event was taken into account in working out the original
amount, it would:
|
Column 3
The mining adjustment
is included in:
|
|
1
|
*mining
revenue for a mining project interest
|
increase
|
mining revenue for that interest
|
|
2
|
*mining
revenue for a mining project interest
|
decrease
|
*mining
expenditure for that interest
|
|
3
|
*mining
expenditure for a mining project interest
|
increase
|
mining expenditure for that interest
|
|
4
|
*mining
expenditure for a mining project interest
|
decrease
|
*mining
revenue for that interest
|
|
5
|
*pre‑mining
revenue for a *pre‑mining
project interest
|
increase
|
pre‑mining revenue for that interest
|
|
6
|
*pre‑mining
revenue for a *pre‑mining
project interest
|
decrease
|
*pre‑mining
expenditure for that interest
|
|
7
|
*pre‑mining
expenditure for a *pre‑mining
project interest
|
increase
|
pre‑mining expenditure for that interest
|
|
8
|
*pre‑mining
expenditure for a *pre‑mining
project interest
|
decrease
|
*pre‑mining
revenue for that interest
|
Example 1: In MRRT year 1, a miner incurs expenditure of $100
million on some machinery that the miner expects to use to the extent of 40% in
the upstream mining operations of a mining project interest for each of 5
years, after which the machinery will be sold. On this basis, $40 million is
included in the miner’s mining expenditure for the mining project interest for
MRRT year 1.
In MRRT year 2, the miner’s use of the
machinery in those operations increases to 50%, and the miner expects that
extent of use to continue for the rest of the 5 years. As a result, the extent
to which the expenditure relates to the interest increases to 48%. Accordingly,
a further $8 million is included in the miner’s mining expenditure for the
interest for MRRT year 2.
Example 2: In MRRT year 1, the miner incurs expenditure of
$100 million on some machinery, which the miner expects to use for 4 years, but
does not expect to use to any extent in the upstream mining operations of a
mining project interest. Therefore, none of the expenditure is included in the
miner’s mining expenditure for the mining project interest for MRRT year 1.
In MRRT year 3, the miner starts to use
the machinery to the extent of 10% in those operations, and expects that extent
of use to continue until the end of 4 years. As a result, an amount of $5
million is included in the miner’s mining expenditure for the mining project
interest for MRRT year 3: 10% × 2/4 × $100 million.
(2) However, for the purposes of items 5,
6, 7 and 8 of the table, if a mining project interest that *originates from
the *pre‑mining
project interest exists, the mining adjustment is instead included:
(a) in the circumstances specified in
item 5 or 8 of the table—in the *mining revenue of the mining project interest; or
(b) in the circumstances specified in
item 6 or 7 of the table—in the *mining expenditure of the mining project interest.
(3) If this Division has given rise to a
mining adjustment in relation to the original amount then, in working out
whether a later event or circumstance gives rise to an adjustment under this
Division in relation to the original amount, this Division has effect as if:
(a) the adjustment mentioned in column
3 of the table in subsection (1) had not been made; and
(b) the original amount had instead
been increased or decreased (as the case requires) as mentioned in column 2 of
that table by the amount of the adjustment.
(4) If, apart from this subsection, the
original amount:
(a) would be included in the *mining revenue or *mining expenditure
for a mining project interest, or in the *pre‑mining revenue or *pre‑mining
expenditure for a *pre‑mining
project interest; and
(b) under paragraph (3)(b), would
be a negative amount;
the original amount is instead taken to be a positive
amount included in the mining expenditure or mining revenue of the mining
project interest, or in the pre‑mining expenditure or pre‑mining revenue of the
pre‑mining project interest, as the case requires.
Division 165—Starting base adjustments
Table of Subdivisions
Guide to Division 165
165‑A Starting base adjustment events and starting
base adjustment amounts
165‑B General rules for starting base adjustments
165‑C Partial disposal of starting base assets
165‑D Miscellaneous
Guide to Division 165
165‑1
What this Division is about
If a starting base asset ceases to be
part of a miner’s starting base (for example, because the miner disposes of
it), there may be a need to reconcile declines in value of the asset (reflected
in starting base losses) with the actual change in value of the asset.
The appropriate starting base loss is
adjusted to achieve this reconciliation. However, in some cases an additional
amount will be included in a miner’s mining revenue.
Subdivision 165‑A—Starting base adjustment events and starting base adjustment
amounts
Table of sections
165‑5 Starting base adjustment events
165‑10 Starting base adjustment amounts
165‑15 Reductions in declines in value of
starting base assets
165‑5
Starting base adjustment events
(1) A starting base adjustment event
happens for a *starting
base asset relating to a mining project interest that a miner has if:
(a) the miner ceases to *hold the asset; or
(b) the miner:
(i) stops using it, having
it *installed
ready for use or constructing it for use, in carrying on *upstream mining
operations relating to the mining project interest; and
(ii) expects never to use
it, never to have it installed ready for use or never to restart constructing
it for use, again in carrying on upstream mining operations relating to the
mining project interest; or
(c) the miner:
(i) has not so used it;
and
(ii) decides never so to
use it; and
(iii) if it has been so
installed—stops having it so installed; and
(iv) if it is being so
constructed for use—stops so constructing it;
in carrying on upstream mining operations
relating to the mining project interest.
(2) However, a starting base adjustment event
does not happen for a *starting base asset that:
(a) is, or includes, the rights and
interests constituting the mining project interest; or
(b) is an asset that the miner
transfers to another entity together with such rights and interests.
165‑10
Starting base adjustment amounts
Termination value exceeding adjustable value
(1) If:
(a) during an *MRRT year, a *starting base
adjustment event happens for a *starting base asset relating to a mining project interest;
and
(b) the *termination value of the asset exceeds
its *adjustable
value just before the event happened;
there is a starting base adjustment amount,
for the asset for the MRRT year, equal to the difference between the
termination value and the adjustable value.
Note: A starting base adjustment amount under this
subsection can be reduced under section 165‑15.
Termination value less than adjustable value
(2) If:
(a) during an *MRRT year, a *starting base
adjustment event happens for a *starting base asset relating to a mining project interest;
and
(b) the *termination value of the asset is less
than its *adjustable
value just before the event happened;
there is a starting base adjustment amount,
for the asset for the MRRT year, equal to the difference between the adjustable
value and the termination value.
Note: A starting base adjustment amount under this subsection
can be reduced under section 165‑15.
Termination value
(3) The termination value of a *starting base
asset for which a *starting
base adjustment event has happened is:
(a) if the miner to whose mining
project interest the asset relates has received, because of the event, an
amount for the asset under a transaction entered into at *arm’s length—that
amount; or
(b) otherwise—the *market value of
the asset at the time the starting base adjustment event happened.
(4) However, the termination value
of the asset is the sum of the following, if that sum is greater than its
termination value under subsection (3):
(a) any *mining expenditure the miner incurs
because of the *starting
base adjustment event;
(b) any amounts by which such
expenditure would have been greater but for one or more amounts that are
received, or become receivable, by the miner.
(5) If all or part of a liability of the
miner to pay an amount relating to the asset is terminated, the amount of the
liability or part when it is terminated is taken, for the purposes of this
section, to be received or to become receivable by the miner in relation to the
asset.
(6) If a miner receives an amount for 2 or
more things that include a *starting base adjustment event happening for a *starting base
asset, take into account as its *termination value only that part of what the miner received
that is reasonably attributable to the asset.
Adjustable value
(7) The adjustable value of a *starting base
asset for which a *starting
base adjustment event has happened is the difference between:
(a) the *base value of the asset for the *MRRT year in which
the event happened; and
(b) an amount equal to what would be
the decline in value of the asset, worked out under section 90‑5, during
the period starting at the start of that year and ending on the day on which
the event happened, if that period were an MRRT year.
165‑15
Reductions in declines in value of starting base assets
(1) If:
(a) there is a *starting base adjustment amount,
for a *starting
base asset for an *MRRT
year; and
(b) an amount of a *starting base loss
for that MRRT year or any earlier MRRT year has been reduced because of a
reduction under subsection 80‑40(3) or (4) relating to the asset;
reduce the starting base adjustment amount in accordance
with subsection (2).
Note: Reductions happen under subsection 80‑40(3) or
(4) if the asset is used, installed for use, or constructed for use for a
purpose other than carrying on upstream mining operations relating to the
mining project interest, or in connection with excluded expenditure.
(2) The reduction is:
where:
sum of reductions is the sum of the
reductions made relating to the asset under subsections 80‑40(3) and (4) during
that *MRRT
year or any earlier MRRT year.
total decline is the sum of the declines in
value of the asset that have happened during that *MRRT year or any earlier MRRT year.
Subdivision 165‑B—General rules for starting base adjustments
Table of sections
165‑20 Starting base adjustments
165‑25 The effect of starting base adjustments on
starting base losses
165‑30 The effect of negative starting base
adjustments on mining revenue
165‑20
Starting base adjustments
(1) If there is, for an *MRRT year, at
least one *starting
base adjustment amount for a *starting base asset relating to a mining project interest,
the starting base adjustment for the mining project interest for
the MRRT year is the amount obtained by subtracting:
(a) all of those starting base
adjustment amounts (if any) arising under subsection 165‑10(1); from
(b) all of those starting base
adjustment amounts (if any) arising under subsection 165‑10(2).
(2) The *starting base adjustment may be a
negative amount, but there is no starting base adjustment if the amount worked
out under subsection (1) is zero.
165‑25
The effect of starting base adjustments on starting base losses
Positive starting base adjustments
(1) If:
(a) there is a *starting base adjustment, for a
mining project interest for an *MRRT year, that is a positive amount; and
(b) there is a *starting base loss for the mining
project interest for the MRRT year;
the starting base loss is increased by the starting base
adjustment.
(2) If:
(a) there is a *starting base adjustment, for a
mining project interest for an *MRRT year, that is a positive amount; and
(b) there is (apart from this
subsection) no *starting
base loss for the mining project interest for the MRRT year;
there is taken to be such a starting base loss equal to
the starting base adjustment.
Negative starting base adjustments
(3) If:
(a) there is a *starting base adjustment, for a
mining project interest for an *MRRT year, that is a negative amount; and
(b) there are one or more *starting base
losses for the mining project interest;
the starting base loss, or one or more of the starting
base losses, are reduced by the starting base adjustment.
(4) If there is more than one *starting base
loss, the starting base adjustment is applied to reduce the starting base
losses in the order in which they arose.
Note: The amount by which that starting base
adjustment exceeds all the starting base losses is included in mining revenue
under subsection 165‑30(2).
165‑30
The effect of negative starting base adjustments on mining revenue
(1) If:
(a) there is a *starting base adjustment, for a
mining project interest for an *MRRT year, that is a negative amount; and
(b) there are no *starting base
losses for the mining project interest;
the starting base adjustment is included in the *mining revenue,
for the mining project interest for the MRRT year, of the miner that has the
mining project interest.
(2) If:
(a) there is a *starting base adjustment, for a
mining project interest for an *MRRT year, that is a negative amount; and
(b) there are one or more *starting base
losses for the mining project interest; and
(c) the starting base adjustment is
greater than the sum of those starting base losses;
an amount equal to the difference between the starting
base adjustment and the sum of those starting base losses is included in the *mining revenue,
for the mining project interest for the MRRT year, of the miner that has the
mining project interest.
Subdivision 165‑C—Partial disposal of starting base assets
Table of sections
165‑35 Starting base adjustments for partial disposal
of starting base assets
165‑40 Declines in value of retained parts of
starting base assets
165‑45 Reductions in starting base losses
165‑50 Base value for the next MRRT year
165‑35
Starting base adjustments for partial disposal of starting base assets
(1) If:
(a) during an *MRRT year, a miner ceases to *hold a part of a *starting base
asset relating to a mining project interest that a miner has; and
(b) the cessation would be a *starting base
adjustment event if the part were a starting base asset;
apply this Division as if that part were a starting base
asset (the disposed asset) and as if the cessation were a
starting base adjustment event for the disposed asset.
(2) The adjustable value of the
disposed asset is a reasonable proportion of what would be the adjustable value
of the *starting
base asset of which it is a part, if a *starting base adjustment event were to happen for
that starting base asset at the time of the cessation.
Example: A miner holds a truck that, at the start of a
particular MRRT year, has a base value of $10 million and a remaining effective
life of 10 years. Halfway through the MRRT year, the miner sells a 75% interest
in the truck for $6 million.
At the time of the sale, the adjustable
value of the entire truck is $9.5 million, so the adjustable value of the
disposed asset is $7.125 million (75% of $9.5 million). The termination value
of the disposed asset is $6 million.
Under subsection 165‑10(2), the miner has
a starting base adjustment amount for the truck of $1.125 million ($7.125
million ‑ $6 million).
(3) Despite subsection (1), this section
does not apply to the disposed asset if at the same time as the miner ceases to
*hold the
disposed asset, the miner also ceases to hold the remainder of the *starting base asset.
165‑40
Declines in value of retained parts of starting base assets
(1) The decline in value of a *starting base
asset during an *MRRT
year (an entire MRRT year) in which section 165‑35 applies
in relation to a miner ceasing to *hold a part of the starting base asset is worked out by:
(a) working out under section 90‑5
the decline in value of the asset, as if the part of the MRRT year before the
cessation were an MRRT year; and
(b) working out under section 90‑5
the decline in value of the asset, as if the part of the MRRT year after the
cessation were another MRRT year; and
(c) summing the result.
Example: Using the example in subsection 165‑35(2), the
decline in value of the truck during the MRRT year is $625,000, being the sum
of:
(a) for the half of the MRRT year that precedes the
cessation, a decline in value of $500,000 ($10 million x 1/2 x 1/10); and
(b) for the remainder of the MRRT year, a decline in value
of $125,000 (($9.5 million ‑ $7.125 million) x 1/2 x
1/9.5).
(2) In working out, under paragraph (1)(b),
the decline in value of a *starting base asset after a cessation, the *base value of the
starting base asset:
(a) is worked out:
(i) as if the part of the *MRRT year that is
taken by paragraph (1)(a) to be an MRRT year were the preceding MRRT year;
and
(ii) if the base value is
worked out under section 90‑30—as if the uplift factor mentioned in that
section were 1; and
(b) is reduced by the *adjustable value
of the disposed asset for that cessation.
(3) If:
(a) section 165‑35 applies in
relation to a miner ceasing to *hold a part of a *starting base asset; and
(b) that cessation happens during a
part of an *MRRT
year that, because of a previous application of this section (including an
application affected by this subsection) in relation to the same starting base
asset, is taken by paragraph (1)(b) to be an MRRT year;
in working out, under paragraph (1)(b), the decline
in value of the starting base asset during that part of an MRRT year, apply subsection (1)
to that part of the MRRT year as if it were an entire MRRT year.
Example: Extending the example in subsection (1), the
miner sells half of its remaining interest in the truck halfway through the
second half of the MRRT year. At the time of this sale, the adjustable value of
the miner’s 25% interest in the truck is $2,312,500, so the adjustable value of
the disposed asset on this occasion is $1,156,250 (50% of $2,312,500).
The decline in value of the miner’s
interest in the truck during the second half of the MRRT year is $93,750, being
the sum of:
(a) for the first 3 months of the second half of the MRRT
year, a decline in value of $62,500 ($2.375 million x 1/4
x 1/9.5); and
(b) for the remainder of the second half of the MRRT year,
a decline in value of $31,250 ($1,156,250 x 1/4 x
1/9.25).
(4) If:
(a) under Division 85, the book
value approach is the valuation approach for the mining project interest to
which a *starting
base asset relates; and
(b) the decline in value of the
starting base asset during a part of an *MRRT year is to be worked out under this
section;
the write off rate of the starting base asset under
section 90‑10 for that part of the MRRT year is taken to be the write off
rate of the starting base asset under that section for the entire MRRT year.
165‑45
Reductions in starting base losses
(1) This section applies if, on one or more
occasions during an *MRRT
year, section 165‑35 applies to a miner ceasing to *hold a part of a *starting base
asset relating to a mining project interest that a miner has.
(2) In working out under subsection 80‑40(3)
or (4) any reduction in an amount of a *starting base loss for the mining project interest
for the *MRRT
year or a later MRRT year, treat the starting base asset as not including,
after the cessation, the disposed asset (within the meaning of section 165‑35)
relating to that cessation.
Note: Reductions happen under subsection 80‑40(3) or
(4) if the asset is used, installed for use, or constructed for use for a
purpose other than carrying on upstream mining operations relating to the
mining project interest, or in connection with excluded expenditure.
Example: Using the example in subsection 165‑40(1), the
miner’s starting base loss would be unaffected if, after the sale of the 75%
interest in the truck, the purchaser used the truck for 75% of the time for a
purpose that is entirely unrelated to the upstream mining operations for the
mining project interest.
165‑50
Base value for the next MRRT year
Section 90‑30 or 90‑50 applies in
working out the *base
value of the *starting
base asset for the next *MRRT year as if the last part of the entire MRRT year for
which a *decline
in value was worked out under section 165‑40 were the preceding MRRT year.
Example: Using the example in subsection 165‑40(1), the
preceding base value of the starting base asset for the purposes of section 90‑50
is $2.375 million ($9.5 million ‑ $7.125 million).
If the market value approach is the applicable
valuation approach, the base value of the starting base asset for the next *MRRT year would,
under section 90‑50, be $1.75 million ($2.375 million ‑ $625,000).
Subdivision 165‑D—Miscellaneous
Table of sections
165‑55 Use etc. of starting base assets for other
mining project interests etc.
165‑60 Effect on base value of use etc. of
starting base assets after starting base adjustment events
165‑55
Use etc. of starting base assets for other mining project interests etc.
Mining expenditure for use etc. leading to a reduction
under subsection 80‑40(3)
(1) If:
(a) a *starting base loss, for an *MRRT year for a
mining project interest that a miner has, is reduced under subsection 80‑40(3)
in relation to a *starting
base asset; and
(b) the reason, or part of the reason,
for the reduction is that the starting base asset was:
(i) used; or
(ii) *installed ready
for use; or
(iii) being constructed for
use;
in carrying on *upstream mining
operations relating to another mining project interest that the miner has, or
in carrying on *pre‑mining
project operations of a *pre‑mining project interest that the miner *holds;
an amount is included in the miner’s *mining expenditure
for the other mining project interest, or *pre‑mining expenditure for the pre‑mining
project interest, for the MRRT year.
(2) The amount is the amount of that
reduction, to the extent that:
(a) the reduction happens for that
reason; and
(b) the amount of the reduction would
have been included:
(i) in the miner’s *mining expenditure
for the other mining project interest, for the *MRRT year, if it had been incurred by the
miner to acquire the *starting
base asset in relation to the other mining project interest; or
(ii) in the miner’s *pre‑mining
expenditure for the *pre‑mining
project interest, for the MRRT year, if it had been incurred by the miner to
acquire the starting base asset in relation to the pre‑mining project interest.
Mining expenditure for use etc. after a starting base
adjustment event
(3) If:
(a) at a particular time (the adjustment
time) during an *MRRT year, a *starting base adjustment event happened for a *starting base
asset relating to a mining project interest that a miner has; and
(b) the starting base adjustment event
happened other than because the miner ceased to *hold the *starting base asset; and
(c) after the adjustment time (whether
during that MRRT year or a later MRRT year) the starting base asset was:
(i) used; or
(ii) *installed ready
for use; or
(iii) being constructed for
use;
in carrying on *upstream mining
operations relating to another mining project interest that the miner has, or
in carrying on *pre‑mining
project operations of a *pre‑mining project interest that the miner holds;
an amount is included in the miner’s *mining expenditure
for the other mining project interest, or *pre‑mining expenditure for the pre‑mining
project interest, for the first MRRT year to which paragraph (c) applies.
(4) The amount is the *termination value of the *starting base
asset, to the extent that:
(a) the starting base asset was,
during the first *MRRT
year to which paragraph (3)(c) applies:
(i) used; or
(ii) *installed ready
for use; or
(iii) being constructed for
use;
in carrying on *upstream mining
operations relating to the other mining project interest, or in carrying on *pre‑mining project
operations of the *pre‑mining
project interest; and
(b) the amount of the termination
value would have been included:
(i) in the miner’s *mining expenditure
for the other mining project interest, for that MRRT year, if it had been
incurred by the miner to acquire the starting base asset in relation to the
other mining project interest; or
(ii) in the miner’s *pre‑mining
expenditure for the pre‑mining project interest, for that MRRT year, if it had
been incurred by the miner to acquire the starting base asset in relation to
the pre‑mining project interest.
Exceptions
(5) Despite subsections (1) and (3),
this section does not apply:
(a) in relation to the other mining
project interest if the *starting base asset is also a starting base asset in
relation to the other mining project interest; or
(b) in relation to the *pre‑mining project
interest if the starting base asset would also be a starting base asset in
relation to another mining project interest that could *originate from the pre‑mining
project interest.
165‑60
Effect on base value of use etc. of starting base assets after starting base
adjustment events
Despite sections 90‑30 and 90‑50,
if:
(a) during an *MRRT year, a *starting base
adjustment event happened for a *starting base asset relating to a mining project interest
that a miner has; and
(b) the starting base adjustment event
happened other than because the miner ceased to *hold the *starting base asset; and
(c) during a later MRRT year in which
the miner holds the starting base asset, it starts to be:
(i) used; or
(ii) *installed ready
for use; or
(iii) being constructed for
use;
in carrying on *upstream mining
operations relating to the mining project interest;
the base value of the starting base asset,
for the first MRRT year after the time at which the starting base adjustment
event happened, is taken to be its *termination value at that time.
Note: The base values of the starting base asset for
later MRRT years will be worked out under section 90‑30 (book value
approach) or 90‑50 (market value approach).
Part 4‑4—Valuation
Division 170—Valuation principles
Guide to Division 170
170‑1
What this Division is about
This Division sets out valuation
principles that are to be applied in working out the value of a thing for the
purposes of the MRRT.
Table of sections
Operative provisions
170‑5 Valuations to comply with valuation
principles
170‑10 The valuation principles
Operative provisions
170‑5
Valuations to comply with valuation principles
(1) The value of a thing that is to be valued
for the purposes of working out an amount under the *MRRT law is to be worked out in
accordance with the valuation principles set out in section 170‑10.
Note: The following are some examples of things that
may be valued:
(a) a starting base asset (to work out a starting base
loss);
(b) a mining project interest or pre‑mining project
interest (to work out a split percentage).
(2) Subsection (1) is a general rule
that is subject to the specific rules in the *MRRT law outside this Division.
(3) To avoid doubt, subsection (1)
applies:
(a) whether or not a provision of the *MRRT law requires
a thing to be valued at its *market value; and
(b) whether or not a provision of the
MRRT law expressly requires an amount to be worked out by making a valuation.
170‑10
The valuation principles
Basic principle
(1) A valuation relating to a mining project
interest or *pre‑mining
project interest is to be reasonable having regard to the objects of the *MRRT law.
Sub‑principles
(2) A valuation that is to be made as at a
particular time may take into account:
(a) things that have actually happened
before that time; and
(b) things that, as at that time, are
reasonably expected to happen after that time.
Example: A valuation of the rights and interests that
constitute a mining project interest as at a particular time may take account
of a reasonable estimate, as at that time, of the coal price at a future time.
The actual coal price at that future time is not taken into account.
(3) The sum of the values of all things in a
set must equal the value of the set.
Example: A mining operation is valued as at 1 May
2010 at $6 billion. Downstream assets (such as crushers and transport
infrastructure) are valued at $2 billion. Upstream capital equipment is valued
at $1 billion. The value of all other assets in the operation, including mining
rights, must be $3 billion.
(4) Identical things in identical
circumstances have the same value.
(5) An assumption or estimate relating to a
mining project interest or *pre‑mining project interest:
(a) is to be reasonable when
considered in isolation; and
(b) is to be reasonable when
considered together with all other assumptions or estimates made in relation to
the interest; and
(c) is to be made consistently for all
things relating to the interest.
Example 1: An estimate of a commodity price at a future time
must itself be reasonable, and must also be reasonable when considered together
with all other assumptions or estimates about things that may affect the
commodity price (such as a currency exchange rate).
Example 2: If the value of a mine is worked out on the
assumption that mine production will rise to a particular extent over time, the
valuation of each asset within the project must use a consistent assumption.
(6) A valuation relating to a mining project
interest or *pre‑mining
project interest is to be reconcilable with each other valuation made relating
to the interest (including, if relevant, a valuation relating to a pre‑mining
project interest from which a mining project interest *originates), if that other
valuation:
(a) was made after 1 May 2010;
and
(b) was made for the purposes of
working out an amount under the *MRRT law; and
(c) is, if it is a valuation of a
thing of which there is more than one valuation meeting the requirements in paragraphs (a)
and (b), the most recent such valuation.
Priority of basic principle
(7) To the extent the application of a sub‑principle
in subsections (2) to (6) to a particular valuation would conflict with
the basic principle in subsection (1), the basic principle is to be
applied and the sub‑principle disregarded.
Division 175—Alternative valuation method
Table of Subdivisions
Guide to Division 175
175‑A Object of this Division
175‑B Choosing to use the alternative valuation
method
175‑C Amounts included in mining revenue under the
alternative valuation method
Guide to Division 175
175‑1
What this Division is about
A miner that extracts only small amounts
of taxable resources, or that has a pre‑MRRT operation for transforming those
taxable resources, can choose to use the alternative valuation method. This
method is a version of the “retail price” or “netback” method.
Under this method, mining revenue for
supply, exportation or use of taxable resources is worked out from the miner’s
transactions relating to the taxable resources, with appropriate reductions for
downstream operating costs, depreciation and returns on capital.
A mining project interest for which the
alternative valuation method is used is treated separately from other mining
project interests, and its royalty credits and mining losses are quarantined.
Note: Under sections 65‑20 and 100‑20, royalty
credits are not available to be applied to transferred royalty allowances, and
mining losses are not available to be applied to transferred mining loss
allowances, if the alternative valuation method has been chosen.
Subdivision 175‑A—Object of this Division
Table of sections
175‑5 Object of this Division
175‑5
Object of this Division
The object of this Division is to
provide an alternative method to work out *mining revenue under section 30‑10,
so as to reduce compliance costs and increase certainty for miners that may
find it particularly difficult to work out that revenue using that section,
because:
(a) their mining operations are small;
or
(b) since before 2 May 2010,
their mining operations have been vertically integrated with other operations.
Subdivision 175‑B—Choosing to use the alternative valuation method
Table of sections
175‑10 Choosing to use the alternative valuation
method
175‑15 Group production of taxable resources
175‑10
Choosing to use the alternative valuation method
(1) A miner may choose to use the alternative
valuation method in relation to a mining project interest that the miner has,
for an *MRRT
year, if either or both of the following apply:
(a) group production of *taxable resources
for the miner for that year under section 175‑15 is less than 10 million
tonnes;
(b) taxable resources extracted during
the year from the *project
area for the mining project interest are used as part of an operation that:
(i) is for *supplying things
(other than taxable resources) produced using a taxable resource extracted
under the authority of a *production right to which the project area relates; and
(ii) existed in *Australia just
before 2 May 2010; and
(iii) the miner carries on
(whether alone or jointly with other *entities).
Note: Division 119 in Schedule 1 to the Taxation
Administration Act 1953 is about choices under the MRRT law.
(2) Each choice that the miner makes must
relate to:
(a) a single mining project interest
that the miner has; and
(b) a single *MRRT year.
175‑15
Group production of taxable resources
(1) The group production of *taxable resources
mentioned in paragraph 175‑10(1)(a) for the miner, for an *MRRT year, is the
number of tonnes of taxable resources that:
(a) relate to mining project interests
the following *entities
have, or *pre‑mining
project interests that they *hold:
(i) the miner;
(ii) an entity *connected with the
miner;
(iii) an *affiliate of the
miner;
(iv) an entity of which the miner
is an affiliate;
(v) an affiliate of an
entity covered by subparagraph (ii);
(vi) an entity connected
with an entity covered by subparagraph (ii), (iii) or (iv); and
(b) have reached, during the MRRT year,
the form in which the resources are intended to be supplied or exported as
mentioned in paragraph 30‑15(1)(a) or (b).
Note: If the MRRT year is not a 12‑month period, the
group production of taxable resources is affected by section 190‑20
(substituted accounting periods).
(2) For the purposes of subsection (1),
the number of tonnes of a *taxable resource is to be calculated when the resource is
in the form mentioned in paragraph (1)(b).
(3) If:
(a) subsection (1) applies in
relation to a *taxable
resource; and
(b) the taxable resource is a quantity
of something produced from a process that results in iron ore or coal being
consumed or destroyed without extraction;
treat as the number of tonnes of that resource, for the
purposes of this section, the number of tonnes of iron ore or coal that was so
consumed or destroyed.
Subdivision 175‑C—Amounts included in mining revenue under the alternative
valuation method
Table of sections
175‑20 When amounts are included in mining
revenue under the alternative valuation method
175‑25 How to work out the single amount
175‑30 Unadjusted revenue amounts
175‑35 Downstream operating costs
175‑40 Depreciation of assets
175‑45 Return on capital costs
175‑20
When amounts are included in mining revenue under the alternative valuation
method
(1) If a miner chooses, for an *MRRT year, to use
the alternative valuation method in relation to a mining project interest that
the miner has, a single amount is included under section 30‑10, in the
miner’s *mining
revenue for the interest for the year, relating to all amounts that:
(a) are to be included in the miner’s
mining revenue for the mining project interest for the year under section 30‑10;
and
(b) relate to *taxable resources that, under subsection (2)
of this section, are covered by the alternative valuation method for the MRRT
year.
The single amount is worked out under section 175‑25,
instead of section 30‑25.
(2) The alternative valuation method covers *taxable resources
for the mining project interest for the year if an amount is included in the
miner’s *mining
revenue for the mining project interest for the *MRRT year under section 30‑10
because a *mining
revenue event happens in relation to the resource.
175‑25
How to work out the single amount
Work out the single amount to be
included under section 30‑10, in a miner’s *mining revenue for a mining project
interest for an *MRRT
year, as follows:
Method statement
Step 1. For each of the *taxable resources
covered by the alternative valuation method for the interest for the year, work
out the unadjusted revenue amount under section 175‑30.
Step 2. Add together all of the
unadjusted revenue amounts for the *taxable resources covered by the alternative valuation
method for the interest for the year.
Step 3. Add together all of the
following amounts:
(a) the miner’s
downstream operating costs, worked out under section 175‑35, for the
interest for the year;
(b) the sum of
the amounts, worked out under section 175‑40, by which the assets of the
miner relating to the interest, to which that section applies, have depreciated
in value during the year;
(c) a return on
the miner’s capital costs for the interest for the year, worked out under
section 175‑45.
Step 4. Reduce the amount under
step 2 by the amount under step 3. The result is the single amount to be
included in the miner’s *mining revenue for the mining project interest for the
year.
175‑30
Unadjusted revenue amounts
The unadjusted revenue amount for a *taxable resource
covered by the alternative valuation method for the *MRRT year is:
(a) if the amount relates to a *supply—the
consideration received or receivable for the supply; or
(b) if the amount relates to an
exportation from *Australia
of the taxable resource, or a thing produced using the taxable resource—an
amount equal to what would be the *arm’s length consideration for a supply of the taxable
resource or thing at the time and place the taxable resource or thing is loaded
for export; or
(c) if the amount relates to use of a
thing produced from the taxable resource—an amount equal to what would be the *arm’s length
consideration for a supply of the thing at the time and place of the use.
175‑35
Downstream operating costs
(1) The miner’s downstream operating costs
for the *MRRT
year are the sum of the miner’s expenditure, to the extent (if any) that each
amount of expenditure meets the following requirements:
(a) it is necessarily incurred during
the year in carrying on activities that:
(i) relate to a *taxable resource
covered by the alternative valuation method for the year; and
(ii) happen between the *valuation point
for the taxable resource and the time of the *mining revenue event mentioned in
subsection 175‑20(2);
(b) it is not a loss or outgoing of
capital, or of a capital nature.
(2) Disregard, for the purposes of subsection (1),
expenditure to the extent that it is *excluded expenditure.
175‑40
Depreciation of assets
(1) This section applies to an asset for an *MRRT year if:
(a) the miner *holds the asset; and
(b) the asset was used, *installed ready
for use or being constructed for use in carrying on:
(i) *mining operations
relating to the mining project interest; or
(ii) operations or
activities that would be mining operations relating to the mining project
interest but for paragraph 35‑20(1)(b); or
(iii) operations of a kind
referred to in paragraph 175‑10(1)(b);
relating to a *taxable resource
covered by the alternative valuation method for the year; and
(c) those operations were carried out
between the *valuation
point for the resource and the time of the *mining revenue event mentioned in
subsection 175‑20(2).
(2) The amount by which such an asset has
depreciated in value during the *MRRT year is the amount that would be worked out under
Division 40 of the Income Tax Assessment Act 1997, using one
of the following methods, if the assumptions in subsection (3) were made:
(a) the *diminishing value method;
(b) the *prime cost method;
(c) another method of depreciation in
accordance with *accounting
principles.
(3) The assumptions are:
(a) the asset is a *depreciating asset;
and
(b) the *MRRT year is an *income year; and
(c) the method mentioned in paragraph (2)(c)
is a method that could be chosen for the purposes of subsection 40‑65(1) of the
Income Tax Assessment Act 1997; and
(d) if the miner *held the asset
immediately before 1 July 2012 and chooses to use the alternative
valuation method for the first MRRT year—the asset’s *opening adjustable value on that
day is its depreciated optimised replacement cost; and
(e) if the miner chooses the *prime cost method
for the purposes of subsection (2)—for the purposes of using the prime
cost method, the first MRRT year is a change year within the meaning of
subsection 40‑75(2) of the Income Tax Assessment Act 1997.
(4) A choice by a miner to use a particular
method mentioned in subsection (2) applies to the *MRRT year for which the miner first
chooses to use the alternative valuation method and to all later MRRT years.
(5) For the purpose of applying paragraph (2)(a)
or (b):
(a) the miner may make the choices for
the purposes of this section; and
(b) the Commissioner may make the
decisions for the purposes of this section;
that the miner or Commissioner could have made under
Division 40 of the Income Tax Assessment Act 1997, relating to
working out an amount under that Division.
Note: Division 119 in Schedule 1 to the Taxation
Administration Act 1953 is about choices under the MRRT law.
(6) The amount under subsection (2) is
reduced to the extent (if any) that, during the year, the asset is not used, *installed ready
for use or being constructed for use in operations that satisfy paragraphs (1)(b)
and (c).
(7) This section applies to any improvement
to, or any fixture on, land as if it were an asset separate from the land,
whether the improvement or fixture is removable or not.
175‑45
Return on capital costs
(1) The return on the miner’s capital costs
for the *MRRT
year is as follows:
where:
total adjustable values is the sum of the
amounts that would be, for that year, the *opening adjustable values of the assets
to which section 175‑40 applies if the assumptions mentioned in subsection (3)
of that section were made.
(2) However, that amount is reduced to the
extent (if any) that, during the year, those assets are not used, *installed ready
for use or being constructed for use in operations that satisfy paragraphs 175‑40(1)(b)
and (c).
Division 180—Valuation of starting base assets using the look‑back
approach
Guide to Division 180
180‑1
What this Division is about
For valuation purposes, an entity can choose
to use a “look‑back” approach that replaces the market value of starting base
assets as at 2 May 2010 with the amount of pre‑mining expenditure incurred
in the 10 years preceding that day.
Note: This Division affects how declines in value are
worked out under Division 90.
Table of sections
Operative provisions
180‑5 Choosing to apply the look‑back approach
180‑10 The effect of the look‑back approach on
valuation of mining project interests
Operative provisions
180‑5
Choosing to apply the look‑back approach
(1) An *entity may choose to apply the look‑back
approach to all the *starting
base assets that the entity *holds that relate to a particular mining project interest
that the entity has, or a *pre‑mining project interest that the entity holds, if:
(a) either:
(i) in the case of a
mining project interest—the mining project interest did not exist on 2 May
2010, but it *originates
from a pre‑mining project interest that existed (or that is a part of a pre‑mining
project interest that existed) just before 2 May 2010; or
(ii) in the case of a pre‑mining
project interest—the pre‑mining project interest existed (or is a part of a pre‑mining
project interest that existed) just before 2 May 2010; and
(b) under Division 85, the market
value approach is the valuation approach for the mining project interest or pre‑mining
project interest.
Note: Division 119 in Schedule 1 to the Taxation
Administration Act 1953 is about choices under the MRRT law.
(2) The choice may specify that it applies to
every mining project interest that the *entity has, and every *pre‑mining project interest that the
entity *holds,
that relate to a specified area.
(3) The choice applies, in relation to the
mining project interest or *pre‑mining project interest, to the first *MRRT year and all
later MRRT years.
180‑10
The effect of the look‑back approach on valuation of mining project interests
(1) If the *entity has made a choice under section 180‑5
relating to the mining project interest or *pre‑mining project interest, in working
out the declines in value, for an *MRRT year to which this section applies, of the *starting base
assets that relate to:
(a) the mining project interest to
which the choice relates; or
(b) a mining project interest that *originates from
the pre‑mining project interest to which the choice relates;
use the assumptions set out in subsection (3) of this
section.
(2) This section applies to the *MRRT year in which
the *start
time for the *starting
base assets happens, and to any later MRRT years.
(3) The assumptions are that:
(a) all of the *starting base assets were a single
starting base asset; and
(b) for the purposes of working out
the *base
value of that single starting base asset under section 90‑40, the *market value of
the asset on 1 May 2010 were the amount worked out under subsection (4);
and
(c) for the purposes of working out
the remaining effective life of that single starting base asset under section 90‑15,
subsection 90‑15(3) applies as if the asset were treated as a single starting base
asset because of section 80‑30.
Note: Any amounts of interim expenditure relating to
the asset would be included in the base value of the asset for the year: see subparagraph
90‑40(1)(a)(ii).
(4) For the purposes of paragraph (3)(b),
the *market
value of the asset on 1 May 2010 is the sum of all the amounts that, if
the *MRRT law
had been in force from 2 May 2000, would have been *pre‑mining expenditure, incurred
between 2 May 2000 and 1 May 2010, that:
(a) if the choice under section 180‑5
relates to a mining project interest:
(i) related to the *pre‑mining project
interest from which the mining project interest *originates; and
(ii) was incurred by the
entity that *held
the pre‑mining project interest at the time the expenditure was incurred; or
(b) if the choice under section 180‑5
relates to a pre‑mining project interest—was incurred by the entity that held
the pre‑mining project interest at the time the expenditure was incurred.
Part 4‑5—Accounting for MRRT
Division 185—Currency translation
Guide to Division 185
185‑1
What this Division is about
The MRRT is accounted for in
Australian currency.
Generally, all amounts are to be
translated into Australian currency.
However, an entity that uses a
functional currency for income tax purposes must use the same functional
currency in accounting for MRRT.
If a functional currency is used,
amounts are worked out on a net basis in the functional currency, with those
amounts then being translated into Australian currency.
Table of sections
Operative provisions
185‑5 Objects of this Division
185‑10 Translation of amounts into Australian
currency
185‑15 Functional currency rules
185‑20 Functional currency rules—Australian
permanent establishments
185‑25 Special translation rules
Operative provisions
185‑5 Objects
of this Division
The objects of this Division are:
(a) to set out a basic rule requiring
an amount in a *foreign
currency to be translated into Australian currency (subject to the functional
currency rules and certain specific rules); and
(b) in order to reduce compliance
costs, to require an *entity
that uses a functional currency for income tax purposes to use the same
functional currency for MRRT; and
(c) to apply rules for identifying the
exchange rate for the translation of amounts that are the same rules as apply
for income tax purposes.
185‑10
Translation of amounts into Australian currency
(1) For the purposes of this Act, an amount
in a *foreign
currency is to be translated into Australian currency.
Examples of an amount
(2) The following are examples of an amount:
(a) an amount of an expense;
(b) an amount of an obligation;
(c) an amount of a liability;
(d) an amount of a receipt;
(e) an amount of a payment;
(f) an amount of consideration;
(g) a value.
Translation rule
(3) The amount is to be translated into
Australian currency at the exchange rate that would be applicable if the
translation were being done for the purposes of Subdivision 960‑C of the Income
Tax Assessment Act 1997.
Amounts that are elements in the calculation of other
amounts
(4) In applying this section:
(a) first, translate any amounts that
are elements in the calculation of other amounts (except amounts covered by subsection (5));
and
(b) then, calculate the other amounts.
Exception for simplified MRRT method
(5) However, in applying this section:
(a) calculate an *entity’s profit
worked out under section 200‑15 without translation; and
(b) then, translate that profit.
185‑15
Functional currency rules
(1) If a choice under item 1 of the
table in subsection 960‑60(1) of the Income Tax Assessment Act 1997 is
in effect in relation to an *entity for a period that includes an *MRRT year, this
section applies, despite section 185‑10, to:
(a) each mining project interest the
entity has in the MRRT year; and
(b) each *pre‑mining project interest the entity *holds in the MRRT
year.
Note: An entity cannot choose to use a functional
currency for MRRT only.
First translation—into applicable functional currency
(2) First, for a purpose mentioned in subsection (3),
an amount that is not in the currency that, under section 960‑70 of the Income
Tax Assessment Act 1997, is the *entity’s applicable functional currency for the relevant
period, is to be translated into that applicable functional currency.
(3) The purposes are as follows:
(a) working out the *entity’s *instalment income
for an *instalment
quarter that is part of the *MRRT year;
(b) working out the *mining profit for
each mining project interest the entity has in the *MRRT year;
(c) working out the *pre‑mining profit
for each *pre‑mining
project interest the entity *holds in the MRRT year;
(d) working out the amount of an *allowance
component relating to each mining project interest the entity has, and each pre‑mining
project interest the entity holds, in the MRRT year;
(e) working out whether the entity may
choose under Division 200 to use the simplified MRRT method for the MRRT
year;
(f) working out a *rehabilitation tax
offset amount for the entity for the MRRT year.
Examples of an amount
(4) The following are examples of an amount:
(a) an amount of an expense;
(b) an amount of an obligation;
(c) an amount of a liability;
(d) an amount of a receipt;
(e) an amount of a payment;
(f) an amount of consideration;
(g) a value;
(h) a monetary limit or other amount
set out in this Act or any other law of the Commonwealth.
Translation rule for first translation
(5) An amount is to be translated into that
applicable functional currency at the exchange rate that would be applicable if
the translation were being done for the purposes of Subdivision 960‑D of
the Income Tax Assessment Act 1997.
(6) Subsections 185‑10(4) and (5) apply in
relation to a translation done under subsection (2) of this section in the
same way those subsections apply in relation to a translation under section 185‑10.
Note: Those subsections are about amounts that are
elements in the calculation of other amounts.
Second translation—into Australian currency
(7) Second:
(a) the *instalment income for an *instalment quarter
that is part of the *MRRT
year is to be translated into Australian currency; and
(b) the *mining profit for each mining project
interest the *entity
has, and the *pre‑mining
profit for each *pre‑mining
project interest the entity *holds in the MRRT year is to be translated into Australian
currency; and
(c) to the extent that an *allowance
component is applied in working out an *MRRT allowance for a mining project interest or
pre‑mining project interest for an MRRT year, the allowance component is to be
translated into Australian currency; and
(d) each *rehabilitation tax offset amount the
entity has for the MRRT year is to be translated into Australian currency.
Note 1: There is no second translation for the
simplified MRRT method because, if the miner chooses to use that method, it has
no MRRT liability and all allowance components are extinguished: see section 200‑5.
Note 2: Not all MRRT allowances apply to pre‑mining
project interests: see Division 140.
Translation rule for second translation
(8) The *instalment income, *mining profit, *pre‑mining profit,
applied *allowance
component or *rehabilitation
tax offset amount (as the case may be) is to be translated into Australian
currency at the exchange rate that would be applicable if the translation were
being done for the purposes of Subdivision 960‑D of the Income Tax
Assessment Act 1997.
185‑20
Functional currency rules—Australian permanent establishments
(1) Despite section 185‑10, if:
(a) a choice under item 2 of the
table in subsection 960‑60(1) of the Income Tax Assessment Act 1997 is
in effect in relation to the *entity in relation to an *Australian permanent establishment for a
period that includes an *MRRT year; and
(b) a mining project interest the
entity has, or a *pre‑mining
project interest the entity *holds, predominantly relates to the activity or business
carried on at or through the Australian permanent establishment;
section 185‑15 applies, subject to this section, to
the mining project interest or pre‑mining project interest.
(2) For the purposes of applying section 185‑15
to the mining project interest or *pre‑mining project interest, sections 185‑15 and 185‑25
apply as if:
(a) the reference in subsection 185‑15(2)
to the *entity’s
applicable functional currency (and any later references to that currency), were
instead references to the applicable functional currency of the *Australian
permanent establishment; and
(b) the purpose mentioned in paragraph
185‑15(3)(a) were instead the purpose of working out so much of the *instalment income mentioned
in that paragraph as arises from the mining project interest or pre‑mining
project interest; and
(c) the references in subsection 185‑15(8)
and item 1 of the table in subsection 185‑25(1) to the *instalment income were
instead references to the amount worked out having regard to paragraph (b).
185‑25
Special translation rules
(1) If:
(a) because of this Division, an
amount is to be translated at the exchange rate that would be applicable if the
translation were being done for the purposes of Subdivision 960‑C or 960‑D
of the Income Tax Assessment Act 1997; and
(b) an item in the table applies to
the circumstances of the translation;
the amount is to be translated at the exchange rate so
applicable on the day (the exchange rate day) mentioned in that
item in the table.
|
Exchange rate days
|
|
Item
|
In these circumstances
...
|
the exchange rate
day is
|
|
1
|
the amount is an amount of *instalment income for an *instalment
quarter in an *MRRT
year
|
the last day of the instalment quarter
|
|
2
|
the amount is an amount of:
(a) *mining profit for a mining project interest the *entity has in
the *MRRT
year; or
(b) *pre‑mining profit for a *pre‑mining project interest the entity *holds in the
MRRT year
|
the last day of the MRRT year
|
|
3
|
the amount is an applied *allowance component that is to be
translated because of paragraph 185‑15(7)(c) (the second translation for
functional currency)
|
the last day of the *MRRT year to which the allowance
component relates
|
|
4
|
an *entity is required to translate the amount in an *MRRT year (the current
year) because:
(a) in the preceding MRRT year, the amount was taken into
account under the *MRRT
law in a particular currency; and
(b) in the current year the amount is to be taken into
account in a different currency
|
the first day of the current year
|
|
5
|
an *entity is required to translate the amount in an *MRRT year
because:
(a) the amount relates to a mining project interest the
entity has after a *mining
project transfer or *mining project split; and
(b) the entity takes the amount into account in a different
currency to the currency in which the entity that had the interest before the
transfer or split took the amount into account
|
the day on which the mining project transfer or mining
project split happens
|
|
6
|
an *entity is required to translate the amount in an *MRRT year
because:
(a) the amount relates to a *pre‑mining project interest the entity
has after a *pre‑mining
project transfer or *pre‑mining project split; and
(b) the entity takes the amount into account in a different
currency to the currency in which the entity that had the interest before the
transfer or split took the amount into account
|
the day on which the pre‑mining project transfer or pre‑mining
project split happens
|
|
7
|
the amount is an amount of an *entity’s profit for an *MRRT year that
is to be translated because of subsection 185‑10(5) (simplified MRRT method)
|
the last day of the MRRT year.
|
Examples of amounts covered by table item 4
(2) The following are examples of amounts
covered by table item 4:
(a) an amount of *mining expenditure
for an earlier *MRRT
year;
(b) the *base value of a *starting base asset for the
preceding MRRT year;
(c) the decline in value of a starting
base asset, worked out under section 90‑5, for the preceding MRRT year;
(d) the amount of an *allowance
component for the preceding MRRT year;
(e) the amount of an allowance
component that has been applied in working out, for the preceding MRRT year, an
*MRRT
allowance.
Special rule about translation—events that happened
before the current choice took effect
(3) The table has effect if an *entity is required
to translate an amount in an *MRRT year (the current year) because:
(a) the amount is attributable to an
event that happened, or a state of affairs that came into existence at a time (the
event time) before the start of the current year; and
(b) the amount has not, before the
start of the current year, been taken into account under the *MRRT law in
relation to a mining project interest or *pre‑mining project interest.
|
Events before current
choice took effect
|
|
Item
|
In this case ...
|
this is the result ...
|
|
1
|
at the event time, no previous choice under subsection 960‑60(1)
of the Income Tax Assessment Act 1997 was in effect in relation to the
*entity
|
the amount is to be translated:
(a) first, to Australian currency at the exchange rate
applicable at the event time; and
(b) then, if necessary, into the currency in which it is to
be taken into account in the current year at the exchange rate applicable at
the start of the current year.
|
|
2
|
at the event time, a previous choice under subsection 960‑60(1)
of the Income Tax Assessment Act 1997 was in effect in relation to the
*entity
|
the amount is to be translated:
(a) first, into the currency that, under section 960‑70
of the Income Tax Assessment Act 1997, is the entity’s previous
applicable functional currency, at the exchange rate applicable at the event
time; and
(b) then, if necessary, into the currency in which it is to
be taken into account in the current year at the exchange rate applicable at
the start of the current year.
|
Examples of amounts covered by subsection (3)
(4) The following are examples of amounts
covered by subsection (3):
(a) the initial book value of a *starting base
asset under subsection 90‑25(3);
(b) an amount of *interim
expenditure incurred in relation to a starting base asset.
Division 190—Substituted accounting periods
Guide to Division 190
190‑1
What this Division is about
If a miner has, for income tax purposes,
accounting periods that are not financial years, those periods are also MRRT
years. However, this principle is modified to deal with overlaps and gaps
caused by changes to a miner’s accounting periods.
Note: This Division modifies the general rule under
section 10‑25 that the MRRT years are financial years.
Table of sections
Operative provisions
190‑5 Object of this Division
190‑10 Accounting periods recognised for income
tax purposes
190‑15 Changes in accounting periods
190‑20 The effect of transitional accounting
periods on threshold amounts
190‑25 The effect of transitional accounting
periods on uplift factors
Operative provisions
190‑5
Object of this Division
The object of this Division is to have
miners account for MRRT over broadly the same periods as they account for
income tax.
190‑10
Accounting periods recognised for income tax purposes
Despite section 10‑25, if a miner
has, under section 18 of the Income Tax Assessment Act 1936,
accounting periods that are not *financial years, any such accounting period starting after
1 July 2012 is an MRRT year.
190‑15
Changes in accounting periods
(1) Despite sections 10‑25 and 190‑10,
if a miner’s accounting period changes for the purposes of the *income tax law
(including by adopting an accounting period in place of *financial years or by ceasing to
adopt such an accounting period), either or both of the following may be
affected by this section:
(a) the accounting period that would
(apart from this section) be the *MRRT year (the old accounting period)
corresponding to the last *income year in effect before the change;
(b) the accounting period that would
(apart from this section) be the MRRT year (the new accounting period)
corresponding to the first income year in effect after the change.
Note: For accounting periods for income tax
purposes, see sections 18 of the Income Tax Assessment Act 1936.
Old and new accounting periods ending in the same
balancing period
(2) If the old accounting period and the new
accounting period both end in the same 12 month period between 1 December
in a year and 30 November in the next year (a balancing period),
the period between the start of the old accounting period and the end of the
new accounting period is a single MRRT year.
Example: A miner changes accounting periods from an
accounting period ending on 31 March 2014 to an accounting period ending
on 31 October 2014.
Because both periods end in the same
balancing period, the 19 month period between 1 April 2013 and 31 October
2014 is a single MRRT year.
Old and new accounting periods ending in different
balancing periods
(3) If:
(a) the old accounting period and the
new accounting period do not end in the same balancing period; and
(b) the old accounting period ends
after what would (apart from this section) be the start of the new accounting
period;
so much of the new accounting period as occurs after the
end of the old accounting period constitutes a separate MRRT year.
Example: A miner changes accounting periods from an
accounting period ending on 30 September 2016 to an accounting period
ending on 31 March 2017.
Because the periods do not end in the same
balancing period, and because the periods overlap, the 6 month period between 1 October
2016 and 31 March 2017 is a separate MRRT year. (The MRRT year
corresponding to the old accounting period is unchanged.)
(4) If:
(a) the old accounting period and the
new accounting period do not end in the same balancing period; and
(b) there is a gap between the end of
the old accounting period and the start of the new accounting period;
the gap constitutes a separate MRRT year.
Example: A miner changes accounting periods from an
accounting period ending on 30 November 2017 to an accounting period
ending on 31 January 2019.
Because the periods do not end in the same
balancing period, and because there is a gap between the periods, the 2 month
period between 1 December 2017 and 31 January 2018 is a separate MRRT
year. (The MRRT years corresponding to the old accounting period and the new
accounting period are unchanged.)
190‑20
The effect of transitional accounting periods on threshold amounts
(1) For the purpose of working out, in
relation to an *MRRT
year that is not a 12 month period (a transitional accounting period),
a component used in working out an amount mentioned in the table, the component
is adjusted by multiplying it by:
|
Threshold amounts
|
|
Item
|
Amount
|
See:
|
|
1
|
a miner’s group mining profit
|
subsection 45‑5(1)
|
|
2
|
a miner’s group MRRT allowances
|
subsection 45‑10(1)
|
|
3
|
a miner’s share of group mining profit
|
subsection 45‑10(1)
|
|
4
|
a miner’s group production of *taxable resources
|
paragraph 175‑15(1)(a)
|
|
5
|
an *entity’s profit
|
section 200‑15
|
Example: A miner with a mining profit of $35 million for a
transitional accounting period of 120 days will not have a low profit offset
under section 45‑5 or 45‑10, because that profit is adjusted by
multiplying it by 365/120, making the profit $106.46 million.
(2) In addition to subsection (1), the
amount of a miner’s offset under subsection 45‑10(1) in relation to a
transitional accounting period is:
where:
unadjusted offset is what would be the amount
of the offset under subsection 45‑10(1) if this subsection did not apply.
Example: A miner has a mining profit of $20 million, and
MRRT allowances of $3 million, for a transitional accounting period of 120
days. The miner has no connected entities, or affiliates, that are miners.
Under subsection (1), the mining
profit is adjusted to $60.83 million, and the MRRT allowances are adjusted to
$9.13 million. Under subsection 45‑10(1), the amount of the miner’s offset
would be $6.76 million (which would exceed the miner’s MRRT liability of $3.83
million, so MRRT would not be payable).
However, under subsection (2) of this
section, that amount is multiplied by 120/365, making the offset $2.22 million
(which would reduce the miner’s MRRT liability to $1.61 million).
(3) For the purposes of working out whether a
mining project interest is covered by subsection 200‑10(3) in relation to a
transitional accounting period, the sums of amounts referred to in paragraphs 200‑10(3)(a)
and (b) are adjusted by multiplying them by:
190‑25
The effect of transitional accounting periods on uplift factors
For the purpose of working out an *allowance
component or a *base
value for an *MRRT
year immediately following a transitional accounting period, a component of a
formula for working out the allowance component or base value that is an uplift
factor is taken to be:
where:
initial uplift factor is what the uplift
factor would be apart from this section.
n is the number of days in the transitional
accounting period, divided by 365.
Note: There are uplift factors for the following:
(a) royalty credits (section 60‑25);
(b) pre‑mining losses (section 70‑50);
(c) mining losses (section 75‑20);
(d) starting base losses (section 80‑45);
(e) base values for starting base assets under the book
value approach (section 90‑30).
Division 195—Non‑cash benefits
Guide to Division 195
195‑1
What this Division is about
If an entity gives and receives non‑cash
benefits under an arrangement (a barter transaction), the entity is taken to
have:
(a) received an
amount for the non‑cash benefits it gives; and
(b) applied that
amount to acquire the non‑cash benefits it receives.
The amount is the market value of the
benefits the entity receives.
If an entity receives or gives a non‑cash
benefit for nothing (a gift transaction), the entity is taken to have received
or paid an amount equal to the market value of the benefit, and to have paid or
received that amount for the benefit.
Table of sections
Operative provisions
195‑5 Object of this Division
195‑10 Barter transactions
195‑15 Gift transactions
Operative provisions
195‑5
Object of this Division
The object of this Division is to ensure
this Act treats transactions for consideration in kind in the same way as
transactions for consideration in cash.
195‑10
Barter transactions
(1) This section applies, if:
(a) under an *arrangement, an *entity gives
consideration of the following kind (non‑cash consideration):
(i) a *non‑cash benefit;
(ii) a promise to pay
money, other than a promise to pay money within 12 months; and
(b) under the same arrangement, the
entity receives non‑cash consideration.
(2) For the purposes of this Act, when the *entity gives the
non‑cash consideration, the entity is taken to receive an amount (the received
amount), for that consideration and any amount the entity actually
gives under the *arrangement,
equal to the sum of:
(a) the *market value of the non‑cash
consideration the entity receives; and
(b) any amount the entity actually
receives under the arrangement.
(3) For the purposes of this Act, when the *entity receives
the non‑cash consideration, the entity is taken to pay the received amount for
that consideration and any amount the entity actually receives under the
arrangement.
(4) To avoid doubt, for the purposes of subsection (2)
or (3), an amount the *entity actually gives or receives under the *arrangement does
not include an amount to which subparagraph (1)(a)(ii) applies.
195‑15
Gift transactions
(1) For the purposes of this Act, if:
(a) an *entity receives a *non‑cash benefit from another
entity; and
(b) the entity makes no payment, and
gives no non‑cash benefit, to any entity at any time for the non‑cash benefit
the entity receives;
the entity is taken, at the time the entity receives the
benefit, to receive an amount equal to the *market value of the benefit and to pay
the same amount for the benefit.
(2) For the purposes of this Act, if:
(a) an *entity gives a *non‑cash benefit to another entity;
and
(b) the entity receives no payment,
and receives no non‑cash benefit, from any entity at any time for the non‑cash
benefit the entity gives;
the entity is taken, at the time the entity gives the
benefit, to pay an amount equal to the *market value of the benefit and to receive the
same amount for the benefit.
Division 200—Simplified MRRT method
Guide to Division 200
200‑1
What this Division is about
A miner can choose to use the
simplified MRRT method for an MRRT year if the miner’s group profit is below
certain limits.
If the miner chooses to use the
method, the miner has no MRRT liabilities for the year, and any allowance
components for a mining project interest or a pre‑mining project interest cease
to exist.
Table of sections
Operative provisions
200‑5 Effect of the simplified MRRT method
200‑10 Choosing to use the simplified MRRT method
200‑15 Working out an entity’s profit for
simplified MRRT method purposes
Operative provisions
200‑5
Effect of the simplified MRRT method
If a miner chooses, for an *MRRT year, to use
the simplified MRRT method:
(a) the miner’s *MRRT liability for
each mining project interest the miner has for the year is zero; and
(b) all *allowance components that relate to a
mining project interest the miner has, or a *pre‑mining project interest the miner *holds, are
extinguished; and
(c) each mining project interest that:
(i) the miner has during
the year; or
(ii) *originates from a
pre‑mining project interest the miner held during the year;
is taken, despite section 80‑20,
to have no *starting
base loss for any later MRRT year.
200‑10
Choosing to use the simplified MRRT method
(1) A miner may choose to use the simplified
MRRT method for an *MRRT
year if the sum (the miner’s group profit) of each of the
following *entities’
profit worked out under section 200‑15 for that year is less than $50
million:
(a) the miner;
(b) an entity *connected with the miner;
(c) an *affiliate of the miner;
(d) an entity of which the miner is an
affiliate;
(e) an affiliate of an entity covered
by paragraph (b);
(f) an entity connected with an
entity covered by paragraph (b), (c) or (d).
Note: Division 119 in Schedule 1 to the Taxation
Administration Act 1953 is about choices under the MRRT law.
(2) A miner may also choose to use the
simplified MRRT method for an *MRRT year if:
(a) the miner’s group profit for that
year is less than $250 million; and
(b) none of the *entities mentioned
in subsection (1) has a mining project interest covered by subsection (3)
for the year.
(3) A mining project interest is covered by
this subsection for an *MRRT year if the difference between:
(a) the sum of the amounts mentioned
in paragraph 60‑25(1)(a) for that interest for that year; and
(b) the sum of any amounts received or
receivable in that year as mentioned in subsection 60‑30(1) in relation to the
amounts mentioned in that paragraph;
is less than 25% of the amount of the *entity’s profit
(worked out under section 200‑15) for that year that relates to that
interest.
Note: Paragraph 60‑25(1)(a) is about liabilities
that give rise to royalty credits. These amounts are not the same as the
royalty credits, which are grossed up under paragraph 60‑25(1)(b).
(4) The choice must be given to the
Commissioner.
Note: Division 119 in Schedule 1 to the Taxation
Administration Act 1953 requires the choice to be in the approved form.
200‑15
Working out an entity’s profit for simplified MRRT method purposes
(1) To work out an *entity’s profit under this section
for an *MRRT
year, work out the entity’s profit in accordance with *accounting principles.
Note: If the MRRT year is not a 12‑month period, the
entity’s profit is affected by section 190‑20 (substituted accounting
periods).
(2) However, disregard an amount that would
otherwise form part of the *entity’s profit under subsection (1) to the extent
that it is one or more of the following:
(a) any interest expenses;
(b) any taxation expenses;
(c) any earnings or expenses that do
not relate, directly or indirectly, to a *mining revenue event;
(d) any expenses that give rise to a *royalty credit the
entity has for the year;
(e) any expenses that give rise to a *private mining
royalty the entity has for the year;
(f) any exceptional earnings or
expenses.
Example: For the 2014‑15 MRRT year, MinerCo has earnings
of $200 million and expenses of $150 million, giving a profit of $50 million.
However, MinerCo has earnings of $51 million that do not relate to a mining
revenue event and the following expenses:
(a) interest expenses of $20 million;
(b) taxation expenses of $20 million;
(c) expenses that do not relate to a mining revenue event
of $10 million;
(d) mining royalties of $20 million;
(e) private mining royalties of $10 million.
Disregarding these earnings and expenses
for the purposes of subsection (2), MinerCo’s adjusted earnings are $149
million ($200 million ‑ $51 million) and its adjusted expenses are $70 million
($150 million ‑ sum of the expenses in paragraphs (a) to (e)). MinerCo’s
profit under this section for the year is $79 million ($149 million ‑ $70
million).
(3) The amount of profit that relates to a
mining project interest the *entity has for the year is so much of the entity’s profit
for the year as is reasonably attributable to that interest.
Part 4‑6—Integrity measures
Division 205—Anti‑profit shifting
Guide to Division 205
205‑1
What this Division is about
A miner’s liability to pay MRRT must
not be smaller than what that liability would be if the conditions operating
between the miner and other entities in their commercial or financial relations
were consistent with conditions that operate in comparable circumstances
between parties dealing wholly independently with one another.
Table of sections
Operative provisions
205‑5 Object of Division
205‑10 Amounts to reflect independent dealings
205‑15 Method to be used when determining amounts
for the purposes of this Division
205‑20 Commissioner may compensate entity or
another entity
205‑25 Commissioner determinations
Operative provisions
205‑5
Object of Division
The object of this Division is to ensure
that dealings that do not fully reflect those that would be expected between
independent parties do not inappropriately reduce MRRT an entity is liable to
pay.
205‑10
Amounts to reflect independent dealings
(1) This section applies in relation to a
mining project interest a miner has, or a *pre‑mining project interest an *entity *holds, for an *MRRT year if:
(a) conditions operate between the
miner or entity and one or more other entities in their commercial or financial
relations that relate to things done, or to be done, in relation to the mining
project interest or pre‑mining project interest; and
(b) those conditions are different from
the conditions (the independent conditions) that operate in
comparable circumstances between independent entities dealing wholly
independently with one another; and
(c) if the independent conditions had
instead operated, one or more of the following would, or could reasonably be
expected to, apply:
(i) the *mining profit (if
any) for the mining project interest for the year or the *pre‑mining profit
(if any) for the pre‑mining project interest for the year would be larger, or
could reasonably be expected to be, larger;
(ii) the *allowance
components (if any) for the mining project interest or pre‑mining project
interest for the year would be smaller, or could reasonably be expected to be,
smaller;
(iii) an offset under
Division 45 (low profit offsets) or Division 225 (rehabilitation tax
offsets) the miner or entity has for the year would be smaller, or could
reasonably be expected to be, smaller.
(2) For the purposes of paragraph (1)(b):
(a) circumstances mentioned in that
paragraph are comparable if, to the extent that they materially affect the
independent conditions, they are the same as the circumstances of the miner or *entity and one or
more other entities mentioned in paragraph (1)(a); and
(b) conditions mentioned in that
paragraph are different from the independent conditions if a condition exists
that is not one of the independent conditions or if a condition does not exist
that is one of the independent conditions.
(3) The *MRRT law has effect as if:
(a) the amounts to which paragraph (1)(c)
applies; and
(b) any amounts that are elements in
the calculation of those amounts;
were the amounts that would be, or could reasonably be
expected to be, those amounts if the independent conditions had instead
operated.
205‑15
Method to be used when determining amounts for the purposes of this Division
(1) For the purposes of this Division, in
working out what an amount would have been, or could reasonably be expected to
have been, if the independent conditions had instead operated, use the method
that, having regard to:
(a) the circumstances of the miner or *entity and one or
more other entities mentioned in paragraph 205‑10(1)(a), including the
functions performed, assets used and risks borne by the miner or entity and
each other entity in their commercial or financial relations; and
(b) the extent to which the method can
reliably adjust for any differences between those circumstances and the circumstances
mentioned in paragraph 205‑10(1)(b); and
(c) the availability of reliable
information required to apply a particular method; and
(d) the *transfer pricing guidelines;
produces the most appropriate and reliable measure of what
the amount would have been.
(2) The following are the transfer
pricing guidelines:
(a) unless paragraph (b)
applies—the document entitled “Transfer Pricing Guidelines for Multinational
Enterprises and Tax Administrations” and published by the Organisation for
Economic Cooperation and Development on 18 August 2010;
(b) if the Commissioner determines, by
legislative instrument, a later publication of that document to be a transfer
pricing guideline for the purposes of this subsection—that later publication;
(c) any other document, or part of any
other document, published by that organisation that the Commissioner determines,
by legislative instrument, to be a transfer pricing guideline for the purposes
of this subsection.
(3) A determination under paragraph (2)(b)
or (2)(c) may specify the time from which the document, or part of the
document, is to be taken to be a *transfer pricing guideline for the purposes of that
paragraph.
205‑20
Commissioner may compensate entity or another entity
(1) The Commissioner may make a determination
under section 205‑25 if:
(a) section 205‑10 applies in
relation to a mining project interest a miner has, or a *pre‑mining project interest an *entity *holds, for an *MRRT year; and
(b) the Commissioner considers that if
the independent conditions mentioned in that section had instead operated, one
or more of the following would, or could reasonably be expected to, apply:
(i) the *mining profit (if
any) for the mining project interest or the *pre‑mining profit (if any) for the pre‑mining
project interest for another MRRT year would be smaller, or could reasonably be
expected to be smaller;
(ii) an *allowance component
(if any) for the mining project interest or pre‑mining project interest for
another MRRT year would be larger, or could reasonably be expected to be
larger;
(iii) an offset under
Division 45 (low profit offsets) or Division 225 (rehabilitation tax offsets)
the miner or entity has for another MRRT year would be larger, or could reasonably
be expected to be larger; and
(c) the Commissioner considers that it
is fair and reasonable that the amounts to which paragraph (b) applies be
adjusted to be the amounts that would be, or could reasonably be expected to be,
those amounts if the independent conditions had instead operated.
(2) The Commissioner may also make a
determination under section 205‑25 if:
(a) section 205‑10 applies in
relation to a mining project interest a miner has, or a *pre‑mining project interest an *entity *holds, for an *MRRT year; and
(b) the Commissioner considers that if
the independent conditions mentioned in that section had instead operated, one
or more of the following would, or could reasonably be expected to, apply in
relation to another entity mentioned in paragraph 205‑10(1)(a):
(i) the *mining profit (if
any) for a mining project interest, or the *pre‑mining profit (if any) for a pre‑mining
project interest, the other entity has or holds, for an MRRT year, would be
smaller, or could reasonably be expected to be smaller;
(ii) an *allowance
component (if any) for a mining project interest or pre‑mining project interest
the other entity has or holds for an MRRT year would be larger, or could
reasonably be expected to be larger;
(iii) an offset under
Division 45 (low profit offsets) or Division 225 (rehabilitation tax
offsets) the other entity has for an MRRT year would be larger, or could reasonably
be expected to be larger; and
(c) the Commissioner considers that it
is fair and reasonable that the amounts to which paragraph (b) applies be
adjusted to be the amounts that would be, or could reasonably be expected to be,
those amounts if the independent conditions had instead operated.
205‑25
Commissioner determinations
(1) For the purposes of adjusting an amount
mentioned in paragraph 205‑20(1)(c) or (2)(c), the Commissioner may make a
determination stating any of the following:
(a) the amount that, under the *MRRT law, is (and
has been at all times) an *entity’s *mining profit for a mining project interest, or the
entity’s *pre‑mining
profit for a *pre‑mining
project interest for an *MRRT year that has ended;
(b) the amount that, under the MRRT
law, is (and has been at all times) an *allowance component for a mining project interest
or pre‑mining project interest for an MRRT year that has ended;
(c) one or more of the following
amounts that, under the MRRT law, is (and has been at all times) the amount an
entity has for an MRRT year that has ended:
(i) an offset under
Division 45 (low profit offsets);
(ii) an offset under
Division 225 (rehabilitation tax offsets);
(d) in relation to an amount that is
an element in the calculation of amounts to which paragraph (a), (b) or
(c) apply—the amount that, under the MRRT law, is (and has been at all times)
that amount for an MRRT year that has ended.
(2) An *entity may give the Commissioner a
written request to make a determination under this section relating to the
entity. The Commissioner must decide whether or not to grant the request, and
give the entity notice of the Commissioner’s decision.
(3) The Commissioner may take such action as
the Commissioner considers necessary to give effect to the determination.
(4) The Commissioner must give a copy of a
determination under this section to the *entity whose *mining profit, *pre‑mining profit, *allowance
components or offsets is stated in the determination.
(5) A failure to comply with subsection (4)
does not affect the validity of the determination.
(6) To avoid doubt, statements relating to
different *MRRT
years and different *mining
profits, *pre‑mining
profits, *allowance
components and offsets may be included in a single determination under this
section.
(7) If an *entity is dissatisfied with the
Commissioner’s decision not to grant a request by the entity under subsection (2),
the entity may object, in the manner set out in Part IVC of the Taxation
Administration Act 1953, against that decision.
Division 210—Anti‑avoidance
Table of Subdivisions
Guide to Division 210
210‑A Application of this Division
210‑B Commissioner may negate effects of schemes for
MRRT benefits
Guide to Division 210
210‑1
What this Division is about
This Division applies to deter schemes
that give entities MRRT benefits by reducing MRRT liabilities or increasing
offsets the entity has under this Act.
The Division applies if an entity gets
an MRRT benefit from a scheme, and the sole or dominant purpose of that entity
or another entity entering into the scheme was to give that entity or another
entity an MRRT benefit (or an MRRT benefit and one or more other taxation
benefits).
The Commissioner may negate the MRRT
benefit an entity gets from the scheme by making a determination.
Subdivision 210‑A—Application of this Division
Table of sections
210‑5 Object of this Division
210‑10 When does this Division apply?
210‑15 When does an entity get an MRRT benefit
from a scheme?
210‑20 Matters to be considered in determining
purpose
210‑5
Object of this Division
The object of this Division is to deter *schemes to give *entities benefits
that:
(a) reduce *MRRT liabilities; or
(b) increase offsets under Division 45
(low profit offsets) or Division 225 (rehabilitation tax offsets).
210‑10
When does this Division apply?
General rule
(1) This Division applies if:
(a) an *entity gets or got an *MRRT benefit from
a *scheme;
and
(b) the MRRT benefit is not
attributable to the making, by any entity, of a choice (however described)
expressly provided for by a *taxation law (other than a choice under Subdivision 960‑D
of the Income Tax Assessment Act 1997); and
(c) taking account of the matters
described in section 210‑20, it is reasonable to conclude that an entity
that (whether alone or with others) entered into or carried out the scheme, or
part of the scheme, did so with the sole or dominant purpose of that entity or
another entity:
(i) getting an MRRT
benefit from the scheme; or
(ii) both getting an MRRT
benefit from the scheme and reducing one or more of its liabilities to which subsection (5)
applies; and
(d) the scheme:
(i) has been or is entered
into on or after 2 May 2010; or
(ii) has been or is carried
out or commenced on or after that day (other than a scheme that was entered
into before that day).
(2) It does not matter whether the *scheme, or any
part of the scheme, was entered into or carried out inside or outside
Australia.
(3) An *MRRT benefit that the *entity gets or got
from a *scheme
is not taken, for the purposes of paragraph (1)(b), to be attributable to
a choice of a kind referred to in that paragraph if:
(a) the scheme, or part of the scheme,
was entered into or carried out for the purpose of creating a circumstance or
state of affairs; and
(b) the existence of the circumstance
or state of affairs is necessary to enable the choice to be made.
Operation of this Division not limited
(4) The operation of this Division is not
limited by:
(a) the *MRRT law (apart from this Division); or
(b) the International Tax
Agreements Act 1953.
Other liabilities
(5) This subsection applies to any of the
following liabilities:
(a) tax under an *Australian law
(other than the *MRRT
law);
(b) tax under a *foreign law;
(c) a *mining royalty.
210‑15
When does an entity get an MRRT benefit from a scheme?
(1) An *entity gets an MRRT benefit
from a *scheme,
if:
(a) an *MRRT liability of the entity for a mining
project interest for an *MRRT year under the *MRRT law apart from this Division is, or
could reasonably be expected to be, smaller than it would be apart from the
scheme; or
(b) the entity has an offset under
Division 45 (low profit offsets) or Division 225 (rehabilitation tax
offsets), and the entity would not have had, or could not reasonably be
expected to have had, the whole or a part of that offset apart from the scheme.
(2) To avoid doubt, a smaller *MRRT liability mentioned
in paragraph (1)(a) includes a case where the MRRT liability is zero, or
there is no MRRT liability for the *MRRT year.
210‑20
Matters to be considered in determining purpose
The following matters are to be taken
into account under section 210‑10 in considering an *entity’s purpose
in entering into or carrying out the *scheme, or part of the scheme:
(a) the manner in which the scheme was
entered into or carried out;
(b) the form and substance of the
scheme;
(c) the time at which the scheme was
entered into and the length of the period during which the scheme was carried
out;
(d) the effect that the *MRRT law would
have in relation to the scheme apart from this Division;
(e) any change in the financial
position of the entity that has resulted, or may reasonably be expected to
result, from the scheme;
(f) any change that has resulted, or
may reasonably be expected to result, from the scheme in the financial position
of an entity that has or had a connection or dealing with the entity, whether
the connection or dealing is or was of a family, business or other nature;
(g) any other consequence for the
entity, or an entity of a kind mentioned in paragraph (f), of the scheme
having been entered into or carried out;
(h) the nature of the connection
(whether of a business, family or other nature) between the entity and such an
entity.
Subdivision 210‑B—Commissioner may negate effects of schemes for MRRT benefits
Table of sections
210‑25 Commissioner may negate entity’s MRRT
benefits
210‑30 Commissioner may compensate entity or
another entity
210‑35 One determination may cover several MRRT
years etc.
210‑40 Commissioner must give copy of
determination to entity affected
210‑25
Commissioner may negate entity’s MRRT benefits
(1) For the purpose of negating an *MRRT benefit the *entity gets or got
from the *scheme,
the Commissioner may make a determination stating any of the following:
(a) the amount that, under the *MRRT law, is (and
has been at all times) the entity’s *MRRT liability for a mining project interest for an *MRRT year that has
ended;
(b) one or more of the following
amounts that, under the MRRT law, is (and has been at all times) the amount the
entity has for an MRRT year that has ended:
(i) an offset under
Division 45 (low profit offsets);
(ii) an offset under
Division 225 (rehabilitation tax offsets).
(2) The Commissioner may take such action as
the Commissioner considers necessary to give effect to the determination.
210‑30
Commissioner may compensate entity or another entity
(1) This section applies if:
(a) the Commissioner has made a
determination under section 210‑25 to negate the *MRRT benefit an *entity gets or got
from the *scheme;
and
(b) the Commissioner considers that
the entity or another entity gets or got an *MRRT disadvantage from the scheme; and
(c) the Commissioner considers that it
is fair and reasonable that the entity or other entity’s MRRT disadvantage be
negated or reduced.
(2) An *entity gets an MRRT disadvantage from
a *scheme if:
(a) an *MRRT liability of the entity for a mining
project interest for an *MRRT year under the *MRRT law (apart from this Division) is,
or could reasonably be expected to be, larger than it would be apart from the
scheme; or
(b) one or more of the following
amounts the entity has for an MRRT year under the MRRT law (apart from this
Division) is, or could reasonably be expected to be, smaller than it would be
apart from the scheme:
(i) an offset under Division 45
(low profit offsets);
(ii) an offset under
Division 225 (rehabilitation tax offsets).
(3) For the purposes of negating or reducing
the *entity’s
or other entity’s *MRRT
disadvantage from the *scheme, the Commissioner may make a determination stating
any of the following:
(a) the amount that, under the *MRRT law, is (and
has been at all times) the entity’s or other entity’s *MRRT liability for a mining project
interest for an *MRRT
year that has ended;
(b) one or more of the following
amounts that, under the MRRT law, is (and has been at all times) the amount the
entity has for an MRRT year that has ended:
(i) an offset under
Division 45 (low profit offsets);
(ii) an offset under
Division 225 (rehabilitation tax offsets).
(4) An *entity may give the Commissioner a
written request to make a determination under this section relating to the
entity. The Commissioner must decide whether or not to grant the request, and
give the entity notice of the Commissioner’s decision.
(5) If the *entity is dissatisfied with the
Commissioner’s decision not to grant the request the entity may object, in the
manner set out in Part IVC of the Taxation Administration Act 1953,
against that decision.
(6) The Commissioner may take such action as
the Commissioner considers necessary to give effect to the determination.
210‑35
One determination may cover several MRRT years etc.
To avoid doubt, statements relating to
different *MRRT
years and different *MRRT
benefits or *MRRT
disadvantages may be included in a single determination under this Subdivision.
210‑40
Commissioner must give copy of determination to entity affected
(1) The Commissioner must give a copy of a
determination under this Subdivision to the *entity whose *MRRT liability or offset amount is stated
in the determination.
(2) A failure to comply with subsection (1)
does not affect the validity of the determination.
Part 4‑7—Entities
Division 215—Consolidated groups
Guide to Division 215
215‑1
What this Division is about
Consolidated groups and MEC groups
(groups of entities that are treated as single entities for income tax
purposes) can choose to consolidate for MRRT purposes.
Following a choice to consolidate,
subsidiary members are treated as part of the head company of the group for
certain purposes, such as calculating MRRT payable.
Mining project interests that a
subsidiary member brings to the group on joining are treated as having been transferred
to the head company.
Mining project interests that a
subsidiary member takes with it on leaving are treated as having been transferred
from the head company to the member.
Table of Sections
Operative provisions
215‑5 Objects of this Division
215‑10 Choice to consolidate for MRRT purposes
215‑15 Single entity rule
215‑20 Project interests transferred to head
company etc. on joining
215‑25 Project interests transferred to leaving
entity on leaving
215‑30 Mining project interests etc. split to
leaving entity on leaving
215‑35 Acquisition of consolidated group by
another consolidated group etc.
215‑40 Instalment rates for leaving entity or new
head company
215‑45 Effect of choice to continue group after
shelf company becomes new head company
215‑50 Effect of change of head company or
provisional head company of a MEC group
215‑55 Effect of group
conversions involving MEC groups
Operative provisions
215‑5
Objects of this Division
The objects of this Division are:
(a) to reduce the cost of complying
with this Act; and
(b) to improve business efficiency by
removing complexities and promoting simplicity in the taxation of wholly‑owned
groups.
215‑10
Choice to consolidate for MRRT purposes
(1) A *head company of a *consolidated group or a *MEC group or a *provisional head
company of a MEC group may, in writing, choose to apply this Division in
relation to the group.
Note: Division 119 in Schedule 1 to the Taxation
Administration Act 1953 is about choices under the MRRT law.
(2) However, subsection (1) does not
apply if a notice has not been given to the Commissioner under section 703‑58
or 719‑76 of the Income Tax Assessment Act 1997 in relation to the
group.
(3) The *head company or the *provisional head
company must give the Commissioner notice of the choice in the *approved form:
(a) within 21 days after making the
choice; or
(b) within such further period as the
Commissioner allows.
(4) The choice:
(a) has effect on and after the day
the choice is made; and
(b) does not have effect after the *consolidated group
or *MEC group
ceases to exist.
Note: Mining project interests the head company has
just before a consolidated group or MEC group ceases to exist would be
transferred or split (as the case requires) to the relevant entity at the time
the group ceases to exist: see section 215‑25 and 215‑30.
215‑15
Single entity rule
(1) If an *entity is a *subsidiary member of the *consolidated group
or *MEC group
for any period in which the choice is in effect, it and any other subsidiary
member of the group are taken for the purposes covered by subsection (2)
to be parts of the *head
company or *provisional
head company of the group, rather than separate entities, during that period.
Note: Despite the single entity rule, a subsidiary
member of the group is jointly and severally liable for an MRRT liability of
the head company: see section 721‑10 of the Income Tax Assessment Act
1997.
(2) The purposes covered by this subsection
are:
(a) working out the mining project
interests or *pre‑mining
project interests the *head company or *provisional head company, or the *entity, has for any *MRRT year in which
any of the period occurs or any later MRRT year;
(b) working out any MRRT that is
payable in relation to such an interest for any such MRRT year;
(c) working out any allowance
components arising in relation to such an interest for any such MRRT year;
(d) working out the company’s or the
entity’s *instalment
income for an *instalment
quarter that is part of any such MRRT year.
Examples: The following are some examples of consequences of
the single entity rule:
(a) mining project interests that the subsidiary member of
a consolidated group would otherwise start to have at a time after becoming a
member of the group are mining project interests the head company has;
(b) a supply of a taxable resource by a subsidiary member
to the head company of a consolidated group would be disregarded and no amount
would be included in the member’s mining revenue in relation to the supply;
(c) an amount paid by the head company for such a supply
would be disregarded and no amount would be included in its mining expenditure
for the supply;
(d) MRRT liabilities that a subsidiary member has before
becoming a member of the group (and any interest charges associated with such a
liability) remain liabilities of the subsidiary member and not the head
company.
215‑20
Project interests transferred to head company etc. on joining
If, because of the application of
section 215‑15, an *entity is taken at a particular time to start being part of
the *head
company or *provisional
head company of a group:
(a) Division 120 applies as if
each mining project interest the entity had just before that time had been
transferred to the company under a *mining project transfer; and
(b) Division 145 applies as if
each *pre‑mining
project interest the entity *held just before that time had been transferred to the
company under a *pre‑mining
project transfer.
215‑25
Project interests transferred to leaving entity on leaving
(1) If:
(a) because of the application of
section 215‑15, an *entity is taken at a particular time to stop being part of
the *head
company or *provisional
head company of a group; and
(b) the entitlement comprising a
mining project interest the entity has just after that time is all of the
entitlement comprising the mining project interest the company had just before
that time;
Division 120 applies as if each such mining project
interest the entity has just after that time had been transferred from the
company under a *mining
project transfer.
(2) If:
(a) because of the application of
section 215‑15, an *entity is taken at a particular time to stop being part of
the *head
company or *provisional
head company of a group; and
(b) a *pre‑mining project interest the entity *holds just after
that time is all of a pre‑mining project interest the company held just before
that time;
Division 145 applies as if each such pre‑mining
project interest the entity holds just after that time had been transferred
from the company under a *pre‑mining project transfer.
215‑30
Mining project interests etc. split to leaving entity on leaving
(1) If:
(a) because of the application of
section 215‑15, an *entity is taken at a particular time to stop being part of
the *head
company or *provisional
head company of a group; and
(b) the entitlement comprising a
mining project interest the entity has just after that time is part, but not
all, of the entitlement comprising the mining project interest the company had
just before that time;
Division 125 applies as if a *mining project split had happened
in relation to the interests.
(2) If:
(a) because of the application of
section 215‑15, an *entity is taken at a particular time to stop being part of
the *head
company or *provisional
head company of a group; and
(b) a *pre‑mining project interest the entity *holds just after
that time is part, but not all, of a pre‑mining project interest the company
held just before that time;
Division 150 applies as if a *pre‑mining project split had
happened in relation to the interests.
215‑35
Acquisition of consolidated group by another consolidated group etc.
If a *member of a *consolidated group or *MEC group (the relinquishing
group) becomes a member of another consolidated group or MEC group (the
acquiring group) at a particular time (the acquisition time):
(a) first apply section 215‑25 or
215‑30 (as the case requires) in relation to the member ceasing to be a member
of the relinquishing group as if section 215‑15 (the single entity rule)
did not apply in relation to the member just after the acquisition time; and
(b) then apply section 215‑20 in
relation to the member becoming a member of the acquiring group as if section 215‑15
(the single entity rule) did not apply in relation to the member just before
the acquisition time.
215‑40
Instalment rates for leaving entity or new head company
If:
(a) at a particular time an *entity ceases to
be a *subsidiary
member of the *consolidated
group or *MEC
group; and
(b) the Commissioner has, before that
time, given the *head
company or *provisional
head company of the group an instalment rate under section 115‑65 in Schedule 1
to the Taxation Administration Act 1953;
for the purposes of applying Division 115 in that
Schedule in relation to the entity at and after that time, the Commissioner is
taken to have given the entity, under that section, the instalment rate that is
the most recent instalment rate the Commissioner has given the head company or
provisional head company of the group under that section before that time.
215‑45
Effect of choice to continue group after shelf company becomes new head company
(1) If a company (the interposed
company) chooses under subsection 124‑380(5) of the Income Tax
Assessment Act 1997 that a *consolidated group is to continue in existence at and after
the time referred to in that subsection as the completion time, for the
purposes of the *MRRT
law:
(a) the group is taken not to have
ceased to exist under subsection 703‑5(2) of that Act because the company
referred to in subsection 124‑380(5) of that Act as the original company ceases
to be the *head
company of the group; and
(b) the interposed company is taken to
have become the head company of the consolidated group at the completion time;
and
(c) the original company is taken to
have ceased to be the head company at that time.
Note: A further result is that the original company
is taken to have become a subsidiary member of the group at that time.
(2) For the purposes mentioned in subsection 215‑15(2)
in relation to an *MRRT
year ending after the completion time, everything that happened in relation to
the original company before the completion time:
(a) is taken to have happened in
relation to the interposed company instead of in relation to the original
company; and
(b) is taken to have happened in
relation to the interposed company instead of what would (apart from this
section) be taken to have happened in relation to the interposed company before
that time;
just as if, at all times before the completion time, the
interposed company had been the original company and the original company had
been the interposed company.
Note: This section treats the original company and
the interposed company as having in effect exchanged identities throughout the
period before the completion time, but without affecting any of the original
company’s other attributes.
215‑50
Effect of change of head company or provisional head company of a MEC group
For the purposes mentioned in subsection
215‑15(2) in relation to an *MRRT year ending after the transition time:
(a) if:
(i) a company (the old
head company) is the *head company of a *MEC group at the end of an *income year; and
(ii) a different company
(the new head company) is the head company of the group at the
start of the next income year (the transition time); or
(b) if:
(i) a company (also the old
head company) is the *provisional head company of a *MEC group just before a *cessation event
happens to the company; and
(ii) a different company
(also the new head company) is the provisional head company of
the group just after that cessation event (also the transition time);
everything that happened in relation to the old head
company before the transition time is taken to have happened in relation to the
new head company instead, just as if the new head company had been the old head
company at all times before the transition time.
Note 1: This section treats the new head company as
having in effect assumed the identity of the old head company throughout the
period before the transition time, but without affecting any of the other
attributes of the old head company.
Note 2: A further result is that the old head company
is taken to have become a subsidiary member of the group at the transition
time.
215‑55
Effect of group conversions involving MEC groups
(1) This section applies if, at a particular
time (the conversion time):
(a) a *consolidated group (the new group)
is *created
from a *MEC
group (the old group); or
(b) a MEC group (the new group)
is created from a consolidated group (the old group).
(2) For the purposes mentioned in subsection 215‑15(2)
in relation to an *MRRT
year ending after the conversion time:
(a) the new group is taken to be a
continuation of the old group; and
(b) the old group is taken not to have
ceased to exist for the purposes of subsection 215‑10(4); and
(c) everything that happened in
relation to the *head
company of the old group before the conversion time is taken instead to have
happened in relation to:
(i) if the head company of
the old group is the same entity as the head company of the new group—that
entity in its role as head company of the new group; or
(ii) otherwise—the head
company of the new group (just as if the head company of the new group had been
the head company of the old group at all times before the conversion time).
Division 220—Partnerships and unincorporated associations and bodies
Guide to Division 220
220‑1
What this Division is about
This Division contains provisions
about the application of the MRRT law to partnerships and unincorporated
associations.
Note: Division 444 in Schedule 1 to the Taxation
Administration Act 1953 contains related provisions.
Table of sections
Operative provisions
220‑5 Partnerships
220‑10 Unincorporated associations and bodies
Operative provisions
220‑5
Partnerships
For the avoidance of doubt, for the
purposes of the *MRRT
law, any act, or any omission, of an *entity (including any *supply, exportation or use by the entity)
in the capacity of a partner in a *partnership is taken:
(a) to be an act or omission of the
partnership; and
(b) not to be an act or omission of
the partner or any other partner of the partnership.
Note: Section 444‑30 in Schedule 1 to the Taxation
Administration Act 1953 deals with the liability of partners for the
obligations imposed on a partnership under the MRRT law.
220‑10
Unincorporated associations and bodies
(1) For the avoidance of doubt, for the
purposes of the *MRRT
law, any act, or any omission, of an *entity (including any *supply, exportation or use by the entity)
in the capacity of a member of the committee of management of an unincorporated
association or body of entities is taken:
(a) to be an act or omission of the
association or body; and
(b) not to be an act or omission of
any members of the association or body.
Note: Subdivision 444‑A in Schedule 1 to
the Taxation Administration Act 1953 deals with the liability of members
for the obligations imposed on an unincorporated association under the MRRT
law.
(2) However, the *MRRT law:
(a) does not apply in relation to an
unincorporated association, or body of entities, that is a joint venture; and
(b) applies instead in relation to
each *entity
that is a participant in that venture.
Part 4‑8—Miscellaneous
Division 225—Rehabilitation tax offsets
Guide to Division 225
225‑1
What this Division is about
A rehabilitation tax offset can arise if
upstream rehabilitation expenditure would not otherwise be taken into account
in working out a liability for MRRT (because a mining project interest or pre‑mining
project interest is winding down or has ended).
Table of sections
Operative provisions
225‑5 Object of this Division
225‑10 Entitlement to rehabilitation tax offsets
225‑15 Rehabilitation tax offset amounts relating
to mining project interests
225‑20 Rehabilitation tax offset amounts relating
to pre‑mining project interests
225‑25 Application of rehabilitation tax offsets
Operative provisions
225‑5
Object of this Division
The object of this Division is to
provide, in appropriate cases, for offsetting of upstream rehabilitation
expenditure that cannot otherwise be applied against a *mining profit or *pre‑mining profit.
225‑10
Entitlement to rehabilitation tax offsets
(1) An *entity has a rehabilitation tax
offset for an *MRRT year if the entity has a *rehabilitation tax offset amount, for the
MRRT year, in relation to:
(a) any mining project interest that
the entity has at the end of the MRRT year; or
(b) any *pre‑mining project interest that the
entity *holds
at the end of the MRRT year.
(2) However, subsection (1) does not
apply if the *entity
is not, and has never been, liable to pay MRRT, for the *MRRT year or any earlier MRRT year.
(3) The amount of the rehabilitation
tax offset for the *MRRT year is the lesser of:
(a) the sum of all the rehabilitation
tax offset amounts that the *entity has for the year; and
(b) the sum of:
(i) all the amounts of MRRT
that the entity is or has been liable to pay for all earlier MRRT years, less
all the amounts that became payable to the miner under paragraph 225‑25(2)(b)
for all earlier MRRT years; and
(ii) all the entity’s *MRRT liabilities
for the MRRT year, less any offset that the entity has under section 45‑5
or 45‑10 (low profit offsets) for the MRRT year.
(4) For the purposes of subsection (2)
or paragraph (3)(b), disregard an *entity’s liability to pay MRRT if one or more of
the following applies:
(a) the liability arose, under
Division 721 of the Income Tax Assessment Act 1997, in the entity’s
capacity as a *subsidiary
member of a *consolidated
group or a *MEC
group;
(b) the liability arose, under section 444‑5
in Schedule 1 to the Taxation Administration Act 1953, in the
entity’s capacity as a member of the committee of management of an
unincorporated association or body;
(c) the liability arose, under section 444‑30
in Schedule 1 to the Taxation Administration Act 1953, in the
entity’s capacity as a partner of a *partnership;
(d) the liability arose, under section 444‑120
in Schedule 1 to the Taxation Administration Act 1953, in the
entity’s capacity as a *trustee of a trust.
225‑15
Rehabilitation tax offset amounts relating to mining project interests
(1) A miner has a rehabilitation tax
offset amount, for an *MRRT year (the current year), in relation to
a mining project interest that the miner has, if:
(a) the *suspension day for the mining project
interest happened in an earlier MRRT year or the current year; and
(b) in the current year, an amount of expenditure
(upstream rehabilitation expenditure) was incurred that:
(i) is included in *mining expenditure
for the mining project interest for the current year; and
(ii) is necessarily
incurred in carrying on *mining operations of a kind mentioned in paragraph 35‑20(2)(f),
or in carrying on activities done in furtherance of mining operations of that
kind; and
(c) a *mining loss relating to the mining
project interest for the current year is extinguished under section 130‑15.
(2) However, subsection (1) does not
apply if neither the miner nor any other *entity has, or has ever had, an *MRRT liability,
for the *MRRT
year or any earlier MRRT year, in relation to the mining project interest.
(3) The rehabilitation tax offset
amount relating to the mining project interest is:
where:
allowable rehabilitation expenditure is the
lesser of:
(a) the sum of all the amounts of
upstream rehabilitation expenditure that were incurred in the current year in
relation to the mining project interest; and
(b) the amount of the *mining loss,
mentioned in paragraph (1)(c), extinguished under section 130‑15.
(4) However, the *rehabilitation tax offset amount cannot
exceed the sum of all the *MRRT liabilities, of the miner or any other miner, for the
mining project interest for the *MRRT year and all earlier MRRT years.
225‑20
Rehabilitation tax offset amounts relating to pre‑mining project interests
(1) An *entity has a rehabilitation tax
offset amount, for an *MRRT year (the current year), in relation to
a *pre‑mining
project interest that the entity *holds if:
(a) the *termination day for the pre‑mining
project interest happened in an earlier MRRT year or the current year; and
(b) in the current year, an amount of
expenditure (upstream rehabilitation expenditure) was incurred that:
(i) is included in *pre‑mining
expenditure for the pre‑mining project interest for the current year; and
(ii) is necessarily
incurred in carrying on *pre‑mining project operations that would be of a kind
mentioned in paragraph 35‑20(2)(f) if they related to a mining project
interest, or in carrying on activities done in furtherance of mining operations
of that kind; and
(c) a *pre‑mining loss relating to the pre‑mining
project interest for the current year is extinguished under section 155‑25.
(2) However, subsection (1) does not
apply if neither the *entity
nor any other entity has, or has ever had, an *MRRT liability, for the *MRRT year or any
earlier MRRT year, in relation to the *pre‑mining project interest.
(3) The rehabilitation tax offset
amount relating to the *pre‑mining project interest is:
where:
allowable rehabilitation expenditure is the
lesser of:
(a) the sum of all the amounts of
upstream rehabilitation expenditure that were incurred in the current year in
relation to the pre‑mining project interest; and
(b) the amount of the *pre‑mining loss,
mentioned in paragraph (1)(c),extinguished under section 155‑25.
(4) However, the *rehabilitation tax offset amount cannot
exceed the sum of all the *MRRT liabilities, of the *entity or any other entity, for the *pre‑mining project
interest for the *MRRT
year and all earlier MRRT years.
225‑25
Application of rehabilitation tax offsets
(1) If an *entity has a *rehabilitation tax offset for an *MRRT year, the
amount of MRRT that (apart from this section) the entity must pay for the MRRT
year is reduced by the amount of the offset.
Note: The amount to be reduced is the amount payable
under section 10‑1 (which relates to all of the entity’s mining project
interests and pre‑mining project interests), as reduced by any low profit
offset under section 10‑15.
(2) However, if the amount of the offset
exceeds the amount of MRRT that (apart from this section) the *entity must pay
for the *MRRT
year:
(a) the entity is not required to pay
MRRT for the MRRT year; and
(b) the Commissioner must, on behalf
of the Commonwealth, pay to the entity the amount of the excess.
Note 1: See Division 3A of Part IIB of the Taxation
Administration Act 1953 for the rules about how the Commissioner must pay
the entity. Division 3 of Part IIB of that Act allows the
Commissioner to apply the amount owing as a credit against tax debts that the
entity owes to the Commonwealth.
Note 2: Interest is payable under the Taxation
(Interest on Overpayments and Early Payments) Act 1983 if the Commissioner
is late in refunding the amount.
(3) If the amount paid under paragraph (2)(b),
or applied under the Taxation Administration Act 1953, exceeds the *entity’s proper
entitlement under that paragraph, that excess is to be treated as if it were
MRRT that became payable, and due for payment, by the entity at the time when
the amount was so paid or applied.
Note: The main effect of treating the amount as if
it were MRRT is to apply the collection and recovery rules in Part 3‑10 in
Schedule 1 to the Taxation Administration Act 1953, such as a
liability to pay the general interest charge under section 105‑80 in that
Schedule.
Chapter 5—Miscellaneous
Division 235—Miscellaneous
235‑1
Regulations
The Governor‑General may make
regulations prescribing matters:
(a) required or permitted by this Act
to be prescribed; or
(b) necessary or convenient to be
prescribed for carrying out or giving effect to this Act.
Chapter 6—Interpreting this Act
Part 6‑1—Rules for interpreting this Act
Division 245—Rules for interpreting this Act
245‑1
What forms part of this Act
(1) The following all form part of this Act:
(a) the headings of the Chapters,
Parts, Divisions and Subdivisions of this Act;
(b) a provision covered by section 245‑10
(non‑operative provisions);
(c) the headings of the sections and
subsections of this Act;
(d) the headings for groups of
sections of this Act (group headings);
(e) the notes and examples (however
described) that follow provisions of this Act.
(2) The asterisks used to identify defined
terms form part of this Act. However, if a term is not identified by an
asterisk, disregard that fact in deciding whether or not to apply to that term
a definition or other interpretation provision.
245‑5
What does not form part of this Act
The following do not form part of this
Act:
(a) footnotes and endnotes;
(b) tables of Subdivisions;
(c) tables of sections.
245‑10
Guides and other non‑operative provisions, and their role in interpreting this
Act
(1) The provisions covered by this section
are:
(a) any section in Division 2, 3
or 4; or
(b) any section that has as its
heading “What this Division is about”.
(2) These provisions form part of this Act,
but they are not operative provisions. In interpreting another provision in
this Act (an operative provision), non‑operative provisions may
only be considered:
(a) in determining the purpose or
object underlying the operative provision; or
(b) to confirm that the operative
provision’s meaning is the ordinary meaning conveyed by its text, taking into
account its context in the Act and the purpose or object underlying the
provision; or
(c) in determining the operative
provision’s meaning if the provision is ambiguous or obscure; or
(d) in determining the operative
provision’s meaning if the ordinary meaning conveyed by its text, taking into
account its context in the Act and the purpose or object underlying the provision,
leads to a result that is manifestly absurd or is unreasonable.
Part 6‑2—Meaning of some important concepts
Division 250—Meaning of hold
Guide to Division 250
250‑1
What this Division is about
The concept of hold is relevant to:
(a) determining who
is entitled to a starting base loss for an asset; and
(b) determining depreciation
amounts relevant for the alternative valuation method; and
(c) entitlement
to pre‑mining project interests.
Table of sections
Operative provisions
250‑5 Meaning of hold
250‑10 When certain starting base assets are held
250‑15 Things that are jointly held
Operative provisions
250‑5
Meaning of hold
(1) An *entity holds a thing
referred to in subsection (2) if:
(a) the thing is a *depreciating asset
that the entity holds (within the meaning of section 40‑40 of the Income
Tax Assessment Act 1997); or
(b) the entity would hold the thing
(within the meaning of that section) if it were a depreciating asset.
(2) The things are as follows:
(a) a *starting base asset relating to a mining
project interest (or any property or right that is expected to be a starting
base asset after the time mentioned in subsection 80‑25(2));
(b) an asset to which section 175‑40
applies;
(c) a *pre‑mining project interest.
(3) However, the *entity that has a mining project interest
is taken to hold the *starting base asset that is or includes the rights and
interests constituting the mining project interest.
250‑10
When certain starting base assets are held
Assets treated as a single starting base asset
(1) Despite section 250‑5, a miner holds
a single *starting
base asset to which subsection 80‑30(2) applies for the period during which the
miner would be taken, under section 250‑5, to hold the *constituent assets
of the single starting base asset.
Mine development expenditure
(2) Despite section 250‑5, a miner holds
a *starting
base asset that is *mine
development expenditure relating to a mining project interest from the day the
expenditure was incurred until the day on which the miner ceases to have the
mining project interest.
250‑15
Things that are jointly held
The *MRRT law applies to a thing referred to
in subsection 250‑5(2) (the underlying thing) that an *entity *holds, and that is
also held by one or more other entities, as if each entity’s interest in the
thing were itself the underlying thing.
Note: Partners do not hold partnership assets: see
subsection 250‑5(1) and table item 7 in section 40‑40 of the Income
Tax Assessment Act 1997.
Division 255—Integrated mining project interests
Guide to Division 255
255‑1
What this Division is about
The concept of integration of mining
project interests is relevant to:
(a) whether a
royalty credit for a mining project interest can be applied in working out a
transferred royalty allowance for another mining project interest; and
(b) whether
mining project interests are combined in a single mining project interest.
Note 1: For availability of royalty credits in working
out transferred royalty allowances, see section 65‑20.
Note 2: For when mining project interests are combined,
see Subdivision 115‑B.
Table of sections
Operative provisions
255‑5 Upstream integration of mining project
interests
255‑10 Downstream integration of mining project
interests
255‑15 Meaning of downstream
mining operations
255‑20 Choice to integrate
Operative provisions
255‑5
Upstream integration of mining project interests
A mining project interest is integrated
with another mining project interest at a time if:
(a) the same miner has both of the
interests; and
(b) either:
(i) both the interests
relate to iron ore; or
(ii) both the interests do
not relate to iron ore; and
(c) each of those interests relate to
the same mine or proposed mine.
Note: Multiple mining project interests that are
managed as a single operation and covered by a single mine plan would usually
relate to the same mine.
255‑10
Downstream integration of mining project interests
A mining project interest is also integrated
with another mining project interest at a time if:
(a) the same miner has both of the
interests; and
(b) either:
(i) both the interests
relate to iron ore; or
(ii) both the interests do
not relate to iron ore; and
(c) either the *downstream mining operations for each of the
interests, or the *mining
operations as a whole for each of the interests, are, taking account of the
following matters, integrated:
(i) the manner in which
those operations are carried on;
(ii) the extent of
integration of the use or operation of infrastructure or equipment in carrying
on those operations; and
(d) the miner has made a valid choice
under section 255‑20.
255‑15
Meaning of downstream mining operations
(1) *Mining operations for a mining project interest
are downstream mining operations for the mining project interest
to the extent the operations are not *upstream mining operations.
Note: For upstream mining operations,
see section 35‑15.
Examples: The following are some examples of operations or
activities that might be downstream mining operations:
(a) treating taxable resources by crushing, weighing,
sampling, assaying and refining them after extraction (if this is after the valuation
point for the resources);
(b) training, engaging, employing, paying, accommodating
and ensuring the safety of personnel, and other supportive head office
activities, to the extent they are involved in operations or activities
relating to getting the taxable resources from the valuation point into the
form they are in when the mining revenue event happens;
(c) developing plans and engineering specifications for,
and constructing, facilities (whether in the project area or not) to be used in
recovering, transporting and storing taxable resources after they reach their valuation
point but before they are in the form they are in when the mining revenue event
happens;
(d) acquiring and maintaining plant or equipment for use
in recovering, transporting or storing taxable resources after they reach their
valuation point but before they are in the form they are in when the mining
revenue event happens;
(e) upgrading computer software used to control inventory
(like consumables and spare parts) used for recovering, transporting or storing
taxable resources after they reach their valuation point but before they are in
the form they are in when the mining revenue event happens.
(2) It does not matter where, or when, the
operations are carried out.
255‑20
Choice to integrate
(1) A choice under this section is to treat
all mining project interests of the miner that satisfy paragraphs 255‑10(1)(a)
to (d) at any time as *integrated, including interests the miner starts to have
after making the choice.
(2) The choice does not cease to have effect
even if there are no mining project interests that satisfy paragraphs 255‑10(1)(a)
to (d) at a time.
(3) However, the choice ceases to have effect
in relation to a particular mining project interest after the miner that made
the choice stops having the interest.
Note: Division 119 in Schedule 1 to the Taxation
Administration Act 1953 is about choices under the MRRT law.
Part 6‑3—Dictionary
Division 300—Dictionary
300‑1
Dictionary
In this Act:
Aboriginal person has the meaning given by
subsection 4(1) of the Aboriginal and Torres Strait Islander Act 2005.
accounting principles has the meaning given
by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
accounting standard has the same meaning as
in the Corporations Act 2001.
adjustable value:
(a) of a *starting base asset, has the meaning
given by subsection 165‑10(7); and
(b) of a disposed asset (within the
meaning of section 165‑35), has the meaning given by subsection 165‑35(2).
affiliate has the meaning given by subsection
995‑1(1) of the Income Tax Assessment Act 1997.
allowance component means any of the
following:
(a) a *royalty credit;
(b) a *pre‑mining loss;
(c) a *mining loss;
(d) a *starting base loss.
approved form has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
arm’s length has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
arm’s length consideration has the meaning
given by section 30‑30.
arrangement has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
assessed MRRT means MRRT, as assessed under
Schedule 1 to the Taxation Administration Act 1953.
assessment has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
auditing standard has the same meaning as in
the Corporations Act 2001.
Australia, when used in a geographical sense,
includes:
(a) all the external Territories other
than the Australian Antarctic Territory; and
(b) an area that is an offshore area
for the purposes of the Offshore Petroleum and Greenhouse Gas Storage Act
2006.
Australian law has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
Australian permanent establishment has the
meaning given by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
base value has the meaning given by subsection
90‑5(1).
cessation event has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
CGT asset has the meaning given
by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
closely associated has the meaning given by
subsection 95‑20(5).
Commissioner means the Commissioner of
Taxation.
Commonwealth law has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
connected with has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
consolidatable group has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
consolidated group has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
constituent asset:
(a) of a *starting base asset that is treated as a
single starting base asset because of section 80‑30, means any of the
things mentioned in paragraphs 80‑30(1)(a) to (d) that are treated as the
single starting base asset; or
(b) of a starting base asset that is
treated as a single starting base asset because of subsection 180‑10(3), means
any of the starting base assets that are, under that subsection, treated as the
single starting base asset.
cost base has the meaning given by subsection
995‑1(1) of the Income Tax Assessment Act 1997.
created: in relation to a *consolidated group
or *MEC
group, has the meaning given by subsection 995‑1(1) of the Income Tax
Assessment Act 1997.
decreasing adjustment has the meaning given
by section 195‑1 of the *GST Act.
depreciating asset has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
derivative financial arrangement has the
meaning given by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
diminishing value method has the meaning
given by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
downstream mining operations has the meaning
given by section 255‑15.
effective life has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
entity has the meaning given by subsection
995‑1(1) of the Income Tax Assessment Act 1997.
equity interest has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
excluded expenditure has the meaning given by
Subdivision 35‑B.
excluded STB has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
exploration or prospecting has the meaning
given by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
exploration right has the meaning given by
subsection 70‑25(3).
extract, in relation to a *taxable resource,
means extract the taxable resource in any way, and includes recovering the
taxable resource from the place where it occurs.
financial arrangement has the meaning given
by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
financial year has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
foreign currency has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
foreign currency hedge has the meaning given
by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
foreign law has the meaning given by subsection
995‑1(1) of the Income Tax Assessment Act 1997.
general interest charge has the meaning given
by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
GST has the meaning given by section 195‑1
of the *GST
Act.
GST Act has the meaning given by subsection
995‑1(1) of the Income Tax Assessment Act 1997.
head company has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
higher ranking allowance, in relation
to an *MRRT
allowance, means any other MRRT allowance that, under section 10‑10, is
applied earlier than that allowance in working out a miner’s *MRRT liability.
hire purchase agreement has the meaning given
by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
hold a thing mentioned in subsection 250‑5(2)
has the meaning given by Division 250.
income tax law has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
income year has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
increasing adjustment has the meaning given
by section 195‑1 of the *GST Act.
index number has the meaning given by subsection
995‑1(1) of the Income Tax Assessment Act 1997.
initial supply has the meaning given by
section 30‑20.
input tax credit has the meaning given by
section 195‑1 of the *GST Act.
installed ready for use has the meaning given
by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
instalment income has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
instalment quarter has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
integrated, in relation to mining project
interests, has the meaning given by Division 255.
interim expenditure, in relation to a *starting base
asset relating to a mining project interest, has the meaning given by section 90‑55.
long term bond rate, for a period, has the
meaning given by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
market value has a meaning affected by
Subdivision 960‑S of the Income Tax Assessment Act 1997.
MEC group has the meaning given by subsection
995‑1(1) of the Income Tax Assessment Act 1997.
member has the meaning given by subsection
995‑1(1) of the Income Tax Assessment Act 1997.
mine development expenditure has the meaning
given by subsection 80‑35(3).
miner means an *entity that has a *mining project interest.
mining expenditure has the meaning given by
Division 35.
mining loss has the meaning given by section 75‑20.
mining loss allowance has the meaning given
by section 75‑10.
mining operations has the meaning given by
section 35‑20.
mining profit has the meaning given by
Division 25.
mining project interest has the meaning given
by section 15‑5.
mining project split has the meaning given by
subsection 125‑10(3).
mining project transfer has the meaning given
by subsection 120‑10(3).
mining, quarrying or prospecting information
has the meaning given by subsection 995‑1(1) of the Income Tax Assessment
Act 1997.
mining revenue has the meaning given by
Division 30.
mining revenue event has the meaning given by
section 30‑15.
mining royalty has the meaning given by
subsection 35‑45(1).
mining venture has the meaning given by
subsection 15‑5(3).
MRRT means minerals resource rent tax imposed
by any of the following:
(a) the Minerals Resource Rent Tax
(Imposition—General) Act 2011;
(b) the Minerals Resource Rent Tax
(Imposition—Customs) Act 2011;
(c) the Minerals Resource Rent Tax
(Imposition—Excise) Act 2011.
MRRT allowance has the meaning given by
section 10‑10.
MRRT benefit has the meaning given by section 210‑15.
MRRT disadvantage has the meaning given by
subsection 210‑30(2).
MRRT law means:
(a) this Act; and
(b) any Act that imposes MRRT; and
(c) the Taxation Administration Act
1953, so far as it relates to any Act covered by paragraphs (a) and
(b); and
(d) any other Act, so far as it
relates to any Act covered by paragraphs (a) to (c) (or to so much of that
Act as is covered); and
(e) regulations under an Act, so far
as they relate to any Act covered by paragraphs (a) to (d) (or to so much
of that Act as is covered).
MRRT liability has the meaning given by
section 10‑5.
MRRT rate has the meaning given by the
following:
(a) section 4 of the Minerals
Resource Rent Tax (Imposition—General) Act 2011;
(b) section 4 of the Minerals
Resource Rent Tax (Imposition—Customs) Act 2011;
(c) section 4 of the Minerals
Resource Rent Tax (Imposition—Excise) Act 2011.
MRRT year has the meaning given by section 10‑25.
non‑cash benefit has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
opening adjustable value has the meaning
given by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
originates, in relation to a mining project
interest and a *pre‑mining
project interest, has the meaning given by subsection 70‑20(2).
partnership has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
pre‑mining expenditure has the meaning given
by section 70‑35.
pre‑mining loss has the meaning given by
section 70‑30.
pre‑mining loss allowance has the meaning
given by section 70‑10.
pre‑mining loss cap has the meaning given by
section 95‑30.
pre‑mining profit has the meaning given by
section 140‑5.
pre‑mining project interest has the meaning
given by section 70‑25.
pre‑mining project operations has the meaning
given by subsection 70‑35(5).
pre‑mining project split has the meaning
given by subsection 150‑10(2).
pre‑mining project transfer has the meaning
given by subsection 145‑10(2).
pre‑mining revenue has the meaning given by
section 70‑40.
prime cost method has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
private mining royalty has the meaning given
by subsection 35‑45(2).
production right has the meaning given by
section 15‑15.
project area has the meaning given by section 15‑20
or subsection 70‑25(4).
provisional head company of a *MEC group has the
meaning given by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
recoupment has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
rehabilitation tax offset has the meaning
given by section 225‑10.
rehabilitation tax offset amount:
(a) in relation to a mining project
interest—has the meaning given by section 225‑15; and
(b) in relation to a *pre‑mining project
interest—has the meaning given by section 225‑20.
resource marketing operations has the meaning
given by subsection 30‑25(7).
royalty includes the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
royalty allowance has the meaning given by
section 60‑10.
royalty credit has the meaning given by
section 60‑20.
scheme has the meaning given by subsection
995‑1(1) of the Income Tax Assessment Act 1997.
shortfall interest charge has the meaning
given by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
split percentage:
(a) for a new interest a miner has
just after a *mining
project split—has the meaning given by section 125‑15; and
(b) for a new interest an *entity has just
after a *pre‑mining
project split—has the meaning given by subsections 150‑15(5) and (6).
starting base adjustment for a *starting base
asset, has the meaning given by section 165‑20.
starting base adjustment amount for a *starting base
asset, has the meaning given by section 165‑10.
starting base adjustment event, for a *starting base
asset, has the meaning given by section 165‑5.
starting base allowance has the meaning given
by section 80‑10.
starting base asset relating to a mining
project interest has the meaning given by section 80‑25 and subsection 80‑35(1).
starting base days has the meaning given by
subsections 80‑40(6) and (7).
starting base loss, for a mining project
interest, has the meaning given by section 80‑20.
starting base return means a return of the
kind referred to in section 117‑20 in Schedule 1 to the Taxation Administration
Act 1953, that complies with all the requirements of that section and
section 117‑25 (if applicable) in that Schedule and section 388‑75 in
that Schedule.
start time, for a *starting base asset relating to a
mining project interest, has the meaning given by subsection 80‑25(2).
State law has the meaning given by subsection
995‑1(1) of the Income Tax Assessment Act 1997.
subsidiary member has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
supply has the meaning given by section 195‑1
of the *GST
Act.
suspension day has the meaning given by
section 130‑10.
taxable resource has the meaning given by
Division 20.
taxation law has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
termination day:
(a) for a mining project interest, has
the meaning given by section 135‑5; or
(b) for a *pre‑mining project interest, has the
meaning given by section 155‑5.
termination value, of a *starting base
asset, has the meaning given by subsection 165‑10(3) and (4).
Territory law has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
Torres Strait Islander has the meaning given
by subsection 4(1) of the Aboriginal and Torres Strait Islander Act 2005.
transfer pricing guidelines has the meaning
given by subsection 205‑15(2).
transferred mining loss allowance has the
meaning given by section 100‑10.
transferred pre‑mining loss allowance has the
meaning given by section 95‑10.
transferred royalty allowance has the meaning
given by section 65‑10.
transformative operations has the
meaning given by subsection 30‑25(6).
trustee has the meaning given by subsection
995‑1(1) of the Income Tax Assessment Act 1997.
upstream mining operations has the meaning
given by section 35‑15.
valuation point for a *taxable resource has the meaning
given by Division 40.