A Bill for an Act to amend the Petroleum Resource Rent Tax
Assessment Act 1987, and for other purposes
The Parliament of Australia enacts:
1
Short title
This Act may be cited as the Petroleum
Resource Rent Tax Assessment Amendment Act 2011.
2
Commencement
(1) Each provision of this Act specified in
column 1 of the table commences, or is taken to have commenced, in accordance
with column 2 of the table. Any other statement in column 2 has effect
according to its terms.
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Commencement
information
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Column 1
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Column 2
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Column 3
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Provision(s)
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Commencement
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Date/Details
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1. Sections 1 to 3 and anything in this Act not
elsewhere covered by this table
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The day this Act receives the Royal Assent.
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2. Schedule 1, items 1 to 10
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1 July 2012.
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1 July 2012
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3. Schedule 1, item 11
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1 July 2012.
However, the provision(s) do not commence at all if the Tax
Laws Amendment (2011 Measures No. 8) Act 2011 receives the Royal
Assent on or before 1 July 2012.
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4. Schedule 1, items 12 to 24
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1 July 2012.
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1 July 2012
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5. Schedule 1, item 25
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The later of:
(a) the start of 1 July 2012; and
(b) immediately after the commencement of Schedule 2 to
the Tax Laws Amendment (2011 Measures No. 8) Act 2011.
However, the provision(s) do not commence at all if the
event mentioned in paragraph (b) does not occur.
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6. Schedule 1, items 26 to 46
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1 July 2012.
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1 July 2012
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7. Schedule 2, Part 1
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1 July 2012.
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1 July 2012
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8. Schedule 2, Part 2
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A single day to be fixed by Proclamation.
However, if the provision(s) do not commence within the
period of 6 months beginning on the day this Act receives the Royal Assent,
they commence on the day after the end of that period.
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9. Schedules 3 and 4
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1 July 2012.
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1 July 2012
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10. Schedule 5, item 1
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1 July 2012.
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1 July 2012
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11. Schedule 5, items 2 to 5
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The later of:
(a) immediately after the commencement of the provision(s)
covered by table item 2; and
(b) immediately after the commencement of Schedule 3 to
the Minerals Resource Rent Tax (Consequential Amendments and Transitional
Provisions) Act 2011.
However, the provision(s) do not commence at all if the
event mentioned in paragraph (b) does not occur.
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12. Schedule 5, items 6 to 12
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1 July 2012.
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1 July 2012
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13. Schedule 6, Part 1
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The later of:
(a) immediately after the commencement of the provision(s)
covered by table item 2; and
(b) immediately after the commencement of section 3 of
the Clean Energy Act 2011.
However, the provision(s) do not commence at all if the
event mentioned in paragraph (b) does not occur.
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14. Schedule 6, Parts 2 and 3
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1 July 2012.
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1 July 2012
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Note: This table
relates only to the provisions of this Act as originally enacted. It will not
be amended to deal with any later amendments of this Act.
(2) Any information in column 3 of the table
is not part of this Act. Information may be inserted in this column, or
information in it may be edited, in any published version of this Act.
3
Schedule(s)
Each Act that is specified in a Schedule
to this Act is amended or repealed as set out in the applicable items in the
Schedule concerned, and any other item in a Schedule to this Act has effect
according to its terms.
Schedule 1—Extension to onshore projects etc.
Petroleum Resource Rent Tax
Assessment Act 1987
1 Section 2 (definition of access authority)
Repeal the definition, substitute:
access authority means:
(a) a petroleum access authority
within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act
2006; or
(b) an authority or right (however
described) under another Australian law to carry on, in relation to petroleum,
specified operations in a specified area (other than an authority or right that
is an exploration permit, retention lease, production licence or infrastructure
licence).
Note: The Resources Minister may determine that an
authority or right is, or is not, an authority or right of a kind mentioned in
this paragraph: see section 2AA.
2 Section 2 (paragraph (a) of the definition of applicable
commencement date)
After “(b)”, insert “or (c)”.
3 Section 2 (at the end of the definition of applicable
commencement date)
Add:
; or (c) if the project is an onshore
petroleum project or the North West Shelf project, or if an onshore petroleum
project is a pre‑combination project in relation to the project—1 July
2012.
4 Section 2 (definition of block)
Repeal the definition, substitute:
block means:
(a) in relation to an offshore area—a
block within the meaning of the Offshore Petroleum and Greenhouse Gas
Storage Act 2006; or
(b) in relation to an onshore area—an
area (however described) referred to in another Australian law relating to
exploration for, or recovery of, petroleum.
5 Section 2 (definition of eligible production
licence)
Repeal the definition.
6 Section 2 (definition of excluded fee)
Repeal the definition, substitute:
excluded fee means:
(a) an amount of a kind referred to in
paragraph 113(1)(c), subsection 115(5), paragraph 118(1)(c), subsection 178(4)
or paragraph 181(1)(c) of the Offshore Petroleum and Greenhouse Gas Storage
Act 2006; or
(b) a similar amount payable, under
another Australian law, in relation to the grant of an exploration permit, retention
lease or production licence.
7 Section 2 (definition of exploration permit)
Repeal the definition, substitute:
exploration permit means:
(a) a petroleum exploration permit
within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act
2006; or
(b) an authority or right (however
described) under another Australian law:
(i) to explore for
petroleum in an area; or
(ii) to recover petroleum
on an appraisal basis in that area; or
(iii) to carry on such
operations, and execute such works, in the area as are necessary for those
purposes;
that is not an authority or
right to recover petroleum other than on an appraisal basis.
Note: The Resources Minister may determine that an
authority or right is, or is not, an authority or right of a kind mentioned in
this paragraph: see section 2AA.
8 Section 2 (definition of exploration permit area)
Repeal the definition, substitute:
exploration permit area means:
(a) a petroleum exploration permit
area within the meaning of the Offshore Petroleum and Greenhouse Gas Storage
Act 2006; or
(b) the area covered by an authority
or right mentioned in paragraph (b) of the definition of exploration
permit.
9 Section 2 (definition of holder of a registered
interest)
Repeal the definition, substitute:
holder of a registered interest, in relation
to a production licence, means a person holding an interest in the production
licence, being an interest created by a dealing in relation to which:
(a) an entry has been made under
subsection 494(3) of the Offshore Petroleum and Greenhouse Gas Storage Act
2006; or
(b) an entry has been made in a
register mentioned in paragraph (b) of the definition of registered
holder.
10 Section 2 (definition of infrastructure licence)
Repeal the definition, substitute:
infrastructure licence means:
(a) an infrastructure licence within
the meaning of section 7 of the Offshore Petroleum and Greenhouse Gas
Storage Act 2006; or
(b) an authority or right (however
described) under another Australian law to construct and operate facilities in
a specified area for engaging in any of the following activities (other than an
authority or right that is an exploration permit, retention lease, production
licence or pipeline licence):
(i) remote control of
facilities, structures or installations used to recover petroleum in a
production licence area;
(ii) processing petroleum
recovered in any place, including converting petroleum into another form by
physical or chemical means, or both, and partial processing of petroleum;
(iii) storing petroleum
before it is transported to another place;
(iv) preparing petroleum for
transport to another place (for example, pumping or compressing);
(v) activities related to
any of the above.
Note: The Resources Minister may determine that an
authority or right is, or is not, an authority or right of a kind mentioned in
this paragraph: see section 2AA.
11 Section 2 (after paragraph (e) of the
definition of marketable petroleum commodity)
Insert:
(ea) shale oil;
12 Section 2
Insert:
North West Shelf project means the petroleum
project referred to in subsection 19(1B).
13 Section 2
Insert:
oil shale means any shale or other rock
(other than coal) from which a fluid consisting of or including hydrocarbons
may be extracted or produced.
14 Section 2
Insert:
onshore area, in relation to a State or
Territory, means the area of the State or Territory that is not part of that
State’s or Territory’s offshore area within the meaning of the Offshore
Petroleum and Greenhouse Gas Storage Act 2006 and is not within the Joint
Petroleum Development Area within the meaning of that Act.
15 Section 2
Insert:
onshore petroleum project means a petroleum
project for which:
(a) no part of the production licence
area is a petroleum production licence area within the meaning of the Offshore
Petroleum and Greenhouse Gas Storage Act 2006; and
(b) no part of the production licence
area is an area within the Joint Petroleum Development Area within the meaning
of that Act.
16 Section 2 (definition of petroleum)
Repeal the definition, substitute:
petroleum means:
(a) petroleum within the meaning of
the Offshore Petroleum and Greenhouse Gas Storage Act 2006; or
(b) oil shale.
However, petroleum does not include a
taxable resource within the meaning of the Minerals Resource Rent Tax Act
2011.
17 Section 2 (definition of pipeline licence)
Repeal the definition, substitute:
pipeline licence means:
(a) a pipeline licence within the
meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006;
or
(b) an authority or right (however
described) under another Australian law:
(i) to construct a
pipeline in a specified area in accordance with any specified conditions; and
(ii) to construct in that
area specified pumping stations, tank stations and valve stations at specified
positions; and
(iii) to operate that
pipeline and those pumping stations, tank stations and valve stations; and
(iv) to carry on such
operations, to execute such works and to do all such other things in that area
as are necessary for, or incidental to, the construction or operation of that
pipeline and those pumping stations, tank stations and valve stations.
Note: The Resources Minister may determine that an
authority or right is, or is not, an authority or right of a kind mentioned in
this paragraph: see section 2AA.
18 Section 2 (paragraph (a) of the definition of pre‑combination
project)
Omit “eligible”.
19 Section 2 (at the end of the definition of production
licence)
Add:
; or (c) an authority or right (however
described) under another Australian law to undertake activities for the
recovery of petroleum from an area (other than an authority or right that is an
exploration permit or a retention lease).
Note: The Resources Minister may determine that an
authority or right is, or is not, an authority or right of a kind mentioned in
this paragraph: see section 2AA.
20 Section 2 (definition of production licence area)
Repeal the definition, substitute:
production licence area means the following:
(a) a petroleum production licence
area within the meaning of the Offshore Petroleum and Greenhouse Gas Storage
Act 2006;
(b) the area covered by an authority
or right mentioned in paragraph (c) of the definition of production
licence;
and, in relation to the Greater Sunrise project, includes
the Western Greater Sunrise area.
21 Section 2 (definition of registered holder)
Repeal the definition, substitute:
registered holder means:
(a) in relation to a title under the Offshore
Petroleum and Greenhouse Gas Storage Act 2006—the registered holder within
the meaning of that Act; and
(b) in relation to an authority or
right (however described) under another Australian law—the person whose name is
shown in the register (however described) kept under the relevant Australian
law concerned.
22 Section 2 (definition of retention lease)
Repeal the definition, substitute:
retention lease means:
(a) a petroleum retention lease within
the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006;
or
(b) an authority or right (however
described) under another Australian law:
(i) to explore for
petroleum in an area; or
(ii) to recover petroleum
on an appraisal basis in that area; or
(iii) to carry on such
operations, and execute such works, in the area as are necessary for those
purposes;
that is not an authority or
right to recover petroleum other than on an appraisal basis, and that is
granted on the basis that the area contains petroleum and that recovery of that
petroleum is likely to become commercially viable in the future.
Note: The Resources Minister may determine that an
authority or right is, or is not, an authority or right of a kind mentioned in
this paragraph: see section 2AA.
23 Section 2 (definition of retention lease area)
Repeal the definition, substitute:
retention lease area means:
(a) a petroleum retention lease area
within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act
2006; or
(b) the area covered by an authority
or right mentioned in paragraph (b) of the definition of retention
lease.
24 After section 2
Insert:
2AA Determinations
relating to certain defined terms
(1) An authority or right under an Australian
law is taken, for the purposes of this Act, to be an authority or right
mentioned in one of the paragraphs to which this section applies if the Resources
Minister determines, by legislative instrument, that it is an authority or
right of that kind.
(2) An authority or right under an Australian
law is taken, for the purposes of this Act, not to be an authority or right
mentioned in one of the paragraphs to which this section applies if the Resources
Minister determines, by legislative instrument, that it is not an authority or
right of that kind.
(3) This section applies to the following
paragraphs in section 2:
(a) paragraph (b) of the
definition of access authority;
(b) paragraph (b) of the
definition of exploration permit;
(c) paragraph (b) of the
definition of infrastructure licence;
(d) paragraph (b) of the
definition of pipeline licence;
(e) paragraph (c) of the
definition of production licence;
(f) paragraph (b) of the
definition of retention lease.
25 After paragraph 2E(2)(e)
Insert:
(ea) shale oil;
26 Subsection 19(1)
After “(1A)”, insert “and (1B)”.
27 Subsection 19(1)
Omit “an eligible”, substitute “a”.
28 Subsection 19(1)
Omit “eligible” (second occurring).
29 After subsection 19(1A)
Insert:
(1B) For the purposes of this Act, there is
taken to be a single petroleum project in relation to all production licences
that are related to the North West Shelf exploration permits and that are in
force from time to time.
30 Subsection 19(2)
Omit “eligible” (wherever occurring).
31 Paragraph 19(2B)(a)
Omit “an eligible”, substitute “a”.
32 Paragraph 19(2B)(b)
Omit “eligible”.
33 Paragraph 19(2C)(a)
Omit “an eligible”, substitute “a”.
34 Paragraph 19(2C)(b)
Omit “eligible”.
35 Subsection 19(3)
Omit “eligible” (wherever occurring).
36 Subsection 20(1)
Repeal the subsection, substitute:
(1) Subject to this section, where within the
qualifying period in relation to a production licence in relation to a
petroleum project, the Resources Minister, whether on application, request or
otherwise, having regard to:
(a) the respective operations,
facilities and other things that comprise, have comprised or will comprise that
project and any other petroleum project or projects existing at the time at
which the production licence came into force; and
(b) the persons by whom or on whose
behalf the operations, facilities and other things referred to in paragraph (a)
are being, have been or are proposed to be carried on or provided; and
(c) to the extent (if any) that the
projects are onshore petroleum projects—the respective operations, facilities
and other things that are involved, have been involved or will be involved in
any further processing or treating of any petroleum or marketable petroleum
commodity produced in relation to the projects; and
(d) to the extent (if any) that the
projects are not onshore petroleum projects—the geological, geophysical and
geochemical and other features of the production licence areas in relation to the
projects;
considers that the projects are sufficiently related to be
treated for the purposes of this Act as a single petroleum project, the
Minister must issue a certificate under this subsection specifying the
production licence or production licences in relation to each of the projects.
(1A) Despite subsection (1), the Minister
cannot specify, under that subsection:
(a) a production licence relating to the
North West Shelf project; or
(b) if one of the projects is not an
onshore petroleum project—a production licence relating to:
(i) an onshore petroleum project
existing on 30 June 2012; or
(ii) if a pre‑combination
project in relation to a combined project is such a project—the combined
project.
37 Subsection 20(2)
Omit “eligible” (first occurring).
38 Paragraph 20(2)(a)
Repeal the paragraph, substitute:
(a) the period of 90 days after the
latest of the following:
(i) the time the licence
comes into force;
(ii) the commencement of
this Act;
(iii) if the licence relates
to an onshore petroleum project—the start of 1 January 2013; or
39 Paragraph 20(2)(b)
Omit “eligible”.
40 Subsection 20(4)
After “sale of” insert “petroleum or”.
41 Subsections 20(6) and (7)
Omit “eligible” (wherever occurring).
42 Clause 1 of the Schedule (paragraph (a) of the
definition of starting day)
Omit “or the Bass Strait project”, substitute “, the Bass Strait
project or the North West Shelf project”.
43 Clause 1 of the Schedule (after paragraph (c)
of the definition of starting day)
Insert:
(ca) in relation to the North West
Shelf project—the earlier of the day on which the exploration permit known as
WA‑1‑P was granted and the day on which the exploration permit known as WA‑28‑P
was granted; or
44 Subclause 13(1) of the Schedule
Omit “subclauses (2) and (3)”, substitute “subclause (2)”.
45 Subclause 13(3) of the Schedule
Repeal the subclause.
46 Transitional
Division 2 of Part VIII of the Petroleum Resource
Rent Tax Assessment Act 1987 (collection by instalments) does not apply, in
respect of the year of tax commencing on 1 July 2012, in relation to an
onshore petroleum project or the North West Shelf project.
Schedule 2—Assessable receipts
Part 1—Amendments commencing on 1 July 2012
Petroleum Resource Rent Tax
Assessment Act 1987
1 At the end of subsection 23(1)
Add:
; (f) assessable incidental production
receipts.
2 Subsection 23(2)
Omit “(e)”, substitute “(f)”.
3 Section 28
Before “For”, insert “(1)”.
4 At the end of section 28
Add:
(2) However, an amount referred to in subparagraph (b)(ii)
that is a refund of resource tax expenditure is increased by dividing the
amount by the rate mentioned in section 5 of the Petroleum Resource
Rent Tax (Imposition—General) Act 2011.
5 After section 29
Insert:
29A
Assessable incidental production receipts
(1) For the purposes of this Act, a reference
to assessable incidental production receipts derived by a person in relation to
a petroleum project is a reference to the consideration receivable, less the
amount mentioned in subsection (2), by the person in relation to the sale
of a product, or the provision of a service relating to carbon capture and
storage, if:
(a) it has been recovered, extracted,
provided or produced in carrying on operations, facilities or other things of a
kind mentioned in section 37, 38 or 39 in relation to the project; and
(b) it is not petroleum or a
marketable petroleum commodity; and
(c) eligible real expenditure in
relation to the project (including, in the case of a combined project, any pre‑combination
project in relation to the project) was incurred by the person in relation to
those operations, facilities, or other things.
Example: The following are some examples:
(a) water from a water treatment facility that is an
integral part of a coal seam gas project is sold;
(b) excess electricity that is produced as part of the
petroleum project is sold.
(2) The amount is the sum of any expenditure
(whether of a capital or revenue nature) incurred by the person to the extent that:
(a) it is incurred in deriving
assessable incidental production receipts in relation to the petroleum project;
and
(b) it is not eligible real
expenditure in relation to the petroleum project.
6 Paragraph 30(a)
Omit “or assessable employee amenities receipts”, substitute “,
assessable employee amenities receipts or assessable incidental production
receipts”.
7 At the end of paragraphs 31(b) and (c)
Add “or”.
8 After paragraph 31(e)
Insert:
; or (ea) assessable incidental production
receipts;
9 Paragraph 31(f)
Omit “except in the case of the Bass Strait Project”, substitute “unless
paragraph (g) or (h) applies”.
10 At the end of section 31
Add:
; or (h) in the case of an onshore petroleum
project or the North West Shelf project—at any time on or after 1 July
2012, including a time before the project commenced or after the project has
ceased.
11 At the end of Division 2 of Part V
Add:
31AA
Eligible real expenditure—onshore petroleum projects and the North West Shelf
project
Despite section 45, this Division
applies in relation to:
(a) an onshore petroleum project; or
(b) the North West Shelf project; or
(c) a project in relation to which an
onshore petroleum project is a pre‑combination project;
as if eligible real expenditure could be incurred in
relation to such a project at any time, including a time before 1 July
2012.
12 Paragraphs 57(1)(a) and (2)(a)
Omit “24, 25, 27, 28 or 29”, substitute “23”.
13 Transitional
(1) For the purposes of applying section 31 of the Petroleum
Resource Rent Tax Assessment Act 1987 to an onshore petroleum project or
the North West Shelf project, treat any receipts:
(a) of a kind referred to in that
section; and
(b) derived before 1 July 2012 in
relation to activities undertaken in relation to the project on or after that
day;
as having been derived in the financial year in which the
activities are undertaken.
(2) For the purposes of applying subparagraph 28(b)(ii)
of the Petroleum Resource Rent Tax Assessment Act 1987 in relation to an
onshore petroleum project or the North West Shelf project, disregard any
receipts:
(a) of a kind referred to in that subparagraph;
and
(b) that relate to resource tax
expenditure incurred in relation to the project before 1 July 2012.
Part 2—Amendments commencing on Proclamation
Petroleum Resource Rent Tax
Assessment Act 1987
14 Paragraph 24(1)(a)
After “any petroleum” insert “(other than project natural gas
(within the meaning of the regulations) to which paragraph (f) applies)”.
15 Subparagraph 24(1)(d)(ii)
Repeal the subparagraph.
16 At the end of subsection 24(1)
Add:
; and (f) where:
(i) any project natural
gas (within the meaning of the regulations) recovered from the project is or
has been sold; and
(ii) the regulations apply
to the project natural gas;
the amount worked out in
accordance with the regulations.
Schedule 3—Deductible expenditure
Petroleum Resource Rent Tax
Assessment Act 1987
1 Section 2
Insert:
Aboriginal person has the meaning given by
subsection 4(1) of the Aboriginal and Torres Strait Islander Act 2005.
2 Section 2
Insert:
Australian law has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
3 Section 2 (definition of eligible real expenditure)
After “general project expenditure”, insert “, resource tax
expenditure”.
4 Section 2
Insert:
production licence notice, in relation to a
petroleum project, means:
(a) a notice issued under subsection
258(7) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 in
relation to the project; or
(b) a notice issued by a State or
Territory authority that specifies the day that sufficient information has been
provided to determine the application for the production licence in relation to
the project.
5 Section 2
Insert:
Torres Strait Islander has the meaning given
by subsection 4(1) of the Aboriginal and Torres Strait Islander Act 2005.
6 At the end of paragraph 19(4)(b)
Add:
; (vi) operations and
facilities, carried on or provided, for an environmental purpose, in relation
to the carrying on or provision of the operations, facilities and services
referred to in this section.
7 After paragraph 32(f)
Insert:
(fa) resource tax expenditure;
8 Subsection 33(1)
Omit “or the Bass Strait project”, substitute “, the Bass Strait
project or the North West Shelf project”.
9 Subsection 34(1)
Omit “or the Bass Strait project”, substitute “, the Bass Strait
project or the North West Shelf project”.
10 Subsection 34A(1)
Omit “or the Bass Strait project”, substitute “, the Bass Strait
project or the North West Shelf project”.
11 Paragraph 34A(1)(a)
Repeal the paragraph, substitute:
(a) any amount of class 2 general
project expenditure actually incurred by the person in relation to the project
in the financial year, not being expenditure incurred more than 5 years before
the earlier of the following:
(i) the day specified in
the production licence notice in relation to the project;
(ii) the day the production
licence was issued in relation to the project; and
12 Subsection 34A(3)
After “Bass Strait project”, insert “or the North West Shelf
project”.
13 Subsection 35(1)
Omit “or the Bass Strait project”, substitute “, the Bass Strait
project or the North West Shelf project”.
14 After section 35B
Insert:
35C
Resource tax expenditure
(1) For the purposes of this Act, a reference
to the resource tax expenditure incurred by a person in a financial year in
relation to a petroleum project (not being a combined project) is a reference
to the sum of:
(a) any amount of resource tax
expenditure actually incurred by the person in relation to the project in the
financial year; and
(b) any amount that is taken by subsection (5)
or Division 5 to be resource tax expenditure incurred by the person in
relation to the project in the financial year.
(2) For the purposes of this Act, a reference
to the resource tax expenditure incurred by a person in a financial year in
relation to a combined project is a reference to the sum of:
(a) any amount of resource tax
expenditure actually incurred by the person in relation to the project in the
financial year (not being expenditure incurred before the project combination
certificate in relation to the project came into force); and
(b) any amount that is taken by subsection (5)
or Division 5 to be resource tax expenditure incurred by the person in
relation to the project in the financial year; and
(c) if the financial year is the year
in which the project combination certificate in relation to the project came
into force—any amount of resource tax expenditure, or any amount that is taken
by subsection (5) or Division 5 to be resource tax expenditure,
incurred by the person in relation to the pre‑combination projects in the
financial year.
(3) For the purposes of subsections (1)
or (2), a reference to resource tax expenditure incurred by a person in a
financial year in relation to a petroleum project is a reference to resource
tax expenditure incurred by the person in the year to the extent the
expenditure:
(a) is incurred in relation to
petroleum recovered, on or after 1 July 2012, from the production licence
area for the project; and
(b) is incurred under an Australian
law (other than this Act); and
(c) is expenditure to which one of the
following applies:
(i) the expenditure is a
royalty, or would be a royalty if the petroleum were owned by the Commonwealth,
or a State or Territory, just before the recovery of the petroleum;
(ii) the expenditure is an
excise;
(iii) the expenditure is an
amount calculated by reference to the revenue, expenditure or profits made or
incurred by a person in relation to petroleum recovered from the production
licence area for the project;
(iv) the expenditure is an
amount calculated by reference to the value, at the wellhead, of petroleum
recovered from the production licence area for the project.
(4) However, the amount of resource tax expenditure
under subsection (3) is increased by dividing it by the rate of tax
mentioned in section 5 of the Petroleum Resource Rent Tax
(Imposition—General) Act 2011.
(5) For the purposes of subsection (1),
(2) or (3), if the sum of the following incurred by a person in a financial
year (the assessable year) in relation to a petroleum project exceeds
the assessable receipts derived by the person in the assessable year in
relation to the project:
(a) the class 1 augmented bond rate
general expenditure;
(b) the class 1 augmented bond rate
exploration expenditure;
(c) the class 2 augmented bond rate
general expenditure;
(d) the class 1 GDP factor
expenditure;
(e) the class 2 augmented bond rate
exploration expenditure;
(f) the class 2 GDP factor
expenditure;
(g) the resource tax expenditure;
the person is taken to incur, in relation to the project
and on the first day of the next financial year, an amount of resource tax
expenditure worked out in accordance with the formula:
where:
augmented bond rate means the long term bond
rate in relation to the assessable year plus 1.05.
available excess means so much of the excess
as does not exceed the resource tax expenditure incurred in the assessable
year.
(6) Despite subsection (3), if a person
(the eligible person) incurs a liability to make a payment to
procure expenditure of a kind mentioned in subsection (3) by another
person, then the expenditure is taken to have been incurred by the eligible
person, and not by the other person, to the extent of the liability.
15 Subparagraph 37(1)(b)(vi)
Omit “and”.
16 At the end of paragraph 37(1)(b)
Add:
(vii) operations and
facilities, carried on or provided, for an environmental purpose, in relation
to the carrying on or provision of the operations, facilities and services
referred to in this section; and
17 Section 44
Before “For”, insert “(1)”.
18 At the end of section 44
Add:
(2) For the purposes of paragraph (1)(e),
a private override royalty payment does not include a payment to the extent:
(a) it is by way of compensation for
carrying on or providing, in an area the operations, facilities or other things
comprising a petroleum project; and
(b) it is paid:
(i) 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 that
area; or
(ii) 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 that area; or
(iii) to a person who holds
a right that relates to that area and arises under another Australian law
dealing with the rights of Aboriginal persons or Torres Strait Islanders in
relation to land or waters.
19 After paragraph 58B(1)(a)
Insert:
(aa) if the election was made by the
person within 30 days after the commencement of Schedule 1 to the Petroleum
Resource Rent Tax Assessment Amendment Act 2011—1 July 2012; or
20 Clause 1 of the Schedule (definition of relevant
pre‑commencement day)
Repeal the definition, substitute:
relevant pre‑commencement day, in relation to
a petroleum project, means:
(a) if the petroleum project is not a
combined project, the Bass Strait project or the North West Shelf project—the
day occurring 5 years before the earlier of the following:
(i) the day specified in
the production licence notice in relation to the project;
(ii) the day the production
licence was issued in relation to the project; or
(b) if the petroleum project is a
combined project, the Bass Strait project or the North West Shelf project—the
day occurring 5 years before the earlier of the following:
(i) the earliest day
specified in a production licence notice in relation to a pre‑combination
project in relation to the project;
(ii) the earliest day a
production licence was issued in relation to a pre‑combination project in
relation to the project.
Schedule 4—Starting base for onshore petroleum projects and the North
West Shelf project
Part 1—Main amendments
Petroleum Resource Rent Tax
Assessment Act 1987
1 Section 2 (at the end of the definition of assessment)
Add:
Note: Under clause 23 of Schedule 2,
assessments may also be made for starting base purposes.
2 Section 2 (definition of eligible real expenditure)
Before “or closing‑down expenditure”, insert “, acquired
exploration expenditure, starting base expenditure”.
3 Section 2
Insert:
starting base amount has the meaning given by
Division 1 of Part 3 of Schedule 2.
4 Section 2
Insert:
starting base asset has the meaning given by
clause 10 of Schedule 2.
5 Section 2
Insert:
value, of a starting base asset, means:
(a) if, under Part 2 of Schedule 2,
the book value approach is the valuation approach for the interest, in a
petroleum project, to which the asset relates—the book value of the asset,
worked out under Division 3 of Part 3 of that Schedule; or
(b) if, under Part 2 of Schedule 2,
the market value approach is the valuation approach for the interest, in a
petroleum project, to which the asset relates—the market value of the asset,
worked out under Division 3 of Part 3 of that Schedule.
6 Section 31
Before “For the purposes of”, insert “(1)”.
7 At the end of section 31
Add:
(2) Despite paragraph (1)(h), an
assessable receipt that is an assessable receipt because of clause 21 of
Schedule 2 may be derived at any time, including a time before the project
commences or after the project ceases.
8 Before paragraph 32(g)
Insert:
(fb) acquired exploration expenditure;
(fc) starting base expenditure;
9 Subsection 34A(5) (at the end of the definition of class
2 general project expenditure)
Add “(other than acquired exploration expenditure or starting
base expenditure)”.
10 Before section 36
Insert:
35D
Acquired exploration expenditure
(1) For the purposes of this Act, a reference
to the acquired exploration expenditure incurred by a person in a financial
year in relation to a petroleum project (not being a combined project) is a
reference to:
(a) in relation to the financial year
commencing on 1 July 2009—the person’s acquired exploration expenditure
amount in relation to the project, under clause 19 of Schedule 2; or
(b) in relation to any subsequent
financial year—any amount that is taken by subsection (3) or (4) or
Division 5 to be acquired exploration expenditure incurred by the person
in relation to the project in the financial year.
(2) For the purposes of this Act, a reference
to the acquired exploration expenditure incurred by a person in a financial
year in relation to a combined project is a reference to:
(a) any amount that is taken by subsection (3)
or (4) or Division 5 to be acquired exploration expenditure incurred by
the person in relation to the project in the financial year; or
(b) if the project combination
certificate in relation to the project came into force in the financial year:
(i) any amount of acquired
exploration expenditure; or
(ii) any amount that is
taken by subsection (3) or (4) or Division 5 to be acquired
exploration expenditure;
incurred by the person in
relation to the pre‑combination projects in relation to the project in the
financial year.
(3) For the purposes of subsection (1)
or (2), if:
(a) the sum of:
(i) the class 1 augmented
bond rate general expenditure; and
(ii) the class 1 augmented
bond rate exploration expenditure; and
(iii) the class 2 augmented
bond rate general expenditure; and
(iv) the class 1 GDP factor
expenditure; and
(v) the class 2 augmented
bond rate exploration expenditure; and
(vi) the class 2 GDP factor
expenditure; and
(vii) the resource tax
expenditure; and
(viii) the acquired
exploration expenditure;
incurred by a person in a
financial year (the assessable year) in relation to the petroleum
project exceeds the assessable receipts derived by the person in the assessable
year in relation to the project; and
(b) the next financial year starts not
later than 5 years after 2 May 2010;
the person is taken to incur, in relation to the project
and on the first day of the next financial year, an amount of acquired
exploration expenditure worked out in accordance with the formula:
where:
augmented bond rate means the long term bond
rate in relation to the assessable year plus 1.15.
available excess means so much of the excess
as does not exceed the acquired exploration expenditure incurred in the
assessable year.
(4) For the purposes of subsection (1)
or (2), if:
(a) the sum of:
(i) the class 1 augmented
bond rate general expenditure; and
(ii) the class 1 augmented
bond rate exploration expenditure; and
(iii) the class 2 augmented
bond rate general expenditure; and
(iv) the class 1 GDP factor
expenditure; and
(v) the class 2 augmented
bond rate exploration expenditure; and
(vi) the class 2 GDP factor
expenditure; and
(vii) the resource tax
expenditure; and
(viii) the acquired
exploration expenditure;
incurred by a person in a
financial year (the assessable year) in relation to the petroleum
project exceeds the assessable receipts derived by the person in the assessable
year in relation to the project; and
(b) the next financial year starts
later than 5 years after 2 May 2010;
the person is taken to incur, in relation to the project
and on the first day of the next financial year, an amount of acquired
exploration expenditure worked out in accordance with the formula:
where:
augmented bond rate means the long term bond
rate in relation to the assessable year plus 1.05.
available excess means so much of the excess
as does not exceed the acquired exploration expenditure incurred in the
assessable year.
35E
Starting base expenditure
(1) For the purposes of this Act, a reference
to the starting base expenditure incurred by a person in a financial year in
relation to a petroleum project (not being a combined project) is a reference
to:
(a) in relation to the starting base
financial year for the project:
(i) if the look‑back
approach is not the valuation approach for the person’s interest in the project
under Part 2 of Schedule 2—the person’s starting base amount in
relation to the interest; or
(ii) if subparagraph (i)
does not apply—an amount included in the person’s starting base expenditure in
relation to the project under clause 18 of Schedule 2; or
(b) in relation to any subsequent
financial year—any amount that is taken by subsection (3) or Division 5
to be starting base expenditure incurred by the person in relation to the
project in the financial year.
Note: For starting base amounts, see
Division 1 of Part 3 of Schedule 2.
(2) For the purposes of this Act, a reference
to the starting base expenditure incurred by a person in a financial year in
relation to a combined project is a reference to:
(a) any amount that is taken by subsection (3)
or Division 5 to be starting base expenditure incurred by the person in
relation to the project in the financial year; or
(b) if the project combination
certificate in relation to the project came into force in the financial year:
(i) any amount of starting
base expenditure; or
(ii) any amount that is
taken by subsection (3) or Division 5 to be starting base
expenditure;
incurred by the person in
relation to the pre‑combination projects in relation to the project in the
financial year.
(3) For the purposes of subsection (1)
or (2), if the sum of:
(a) the class 1 augmented bond rate
general expenditure; and
(b) the class 1 augmented bond rate
exploration expenditure; and
(c) the class 2 augmented bond rate
general expenditure; and
(d) the class 1 GDP factor
expenditure; and
(e) the class 2 augmented bond rate
exploration expenditure; and
(f) the class 2 GDP factor
expenditure; and
(g) the resource tax expenditure; and
(h) the acquired exploration
expenditure; and
(i) the starting base expenditure;
incurred by a person in a financial year (the assessable
year) in relation to the petroleum project exceeds the assessable
receipts derived by the person in the assessable year in relation to the
project, the person is taken to incur, in relation to the project and on the
first day of the next financial year, an amount of starting base expenditure
worked out in accordance with the formula:
where:
augmented bond rate means the long term bond
rate in relation to the assessable year plus 1.05.
available excess means so much of the excess
as does not exceed the starting base expenditure incurred in the assessable
year.
(4) The reference in paragraph (1)(a) to
the starting base financial year for a petroleum project is a reference to:
(a) if the look‑back approach is not
the valuation approach for the person’s interest in the project under Part 2
of Schedule 2—the earliest financial year, after 30 June 2012, in
which a production licence relating to the project is in existence; or
(b) if paragraph (a) of this
subsection does not apply—the financial year commencing on 1 July 2009.
11 Section 45
Repeal the section, substitute:
45
Time of incurring of expenditure
Petroleum projects generally
(1) For the purposes of this Act, eligible
real expenditure may be incurred by a person in relation to a petroleum project
(other than an onshore petroleum project, the Bass Strait project or the North
West Shelf project) at any time, including a time:
(a) before the project commences or
after the project ceases; or
(b) before the commencement of this
Act.
Onshore petroleum projects
(2) For the purposes of this Act, eligible
real expenditure may be incurred by a person in relation to an onshore
petroleum project:
(a) if the project, or the exploration
permit or retention lease from which the production licence to which the
project relates is derived, came into existence before 2 May 2010—at any
time on or after the starting base day under subsection (5) for the person’s
interest in the project, including a time before the project commences or after
the project ceases; or
(b) if the project, or the exploration
permit or retention lease from which the production licence to which the project
relates is derived, came into existence on or after 2 May 2010—at any time
on or after 2 May 2010, including a time before the project commences or
after the project ceases.
The Bass Strait project
(3) For the purposes of this Act, eligible
real expenditure may be incurred by a person in relation to the Bass Strait
project at any time on or after 1 July 1990, including a time after the
project ceases.
The North West Shelf project
(4) For the purposes of this Act, eligible
real expenditure may be incurred by a person in relation to the North West
Shelf project at any time on or after the starting base day under subsection (5)
for the person’s interest in the project, including a time after the project
ceases.
Starting base days
(5) For the purposes of paragraph (2)(a)
or subsection (4), the starting base day for a person’s interest in an
onshore petroleum project, or in the North West Shelf project, is:
|
Starting base days
|
|
Item
|
If ...
|
The starting base day
is ...
|
|
1
|
the look‑back approach is not the valuation approach for
the interest that the person holds in the project
|
1 July 2012
|
|
2
|
(a) the look‑back approach is the valuation approach for the
interest; and
(b) the person who held the interest at the start of 2 May
2010 had first acquired the interest, or (being a company) had been acquired,
on or after 1 July 2007
|
the day on which that acquisition occurred
|
|
3
|
(a) the look‑back approach is the valuation approach for the
interest; and
(b) item 2 does not apply
|
1 July 2002
|
Note: Eligible real expenditure incurred before 1 July
2012 in relation to an onshore petroleum project that came into existence
before 2 May 2010, or in relation to the North West Shelf project, is
taken into account in a person’s starting base amount under Schedule 2, if
the look‑back approach does not apply to the person’s interest in the project.
(6) For the purposes of subsection (5),
a person holding an interest in an onshore petroleum project or the North West
Shelf project is taken:
(a) to have acquired the interest if,
and when, the person is taken to have acquired that interest for the purposes
of clause 18 of Schedule 2; and
(b) (not being an individual) to have
been acquired if, and when, the person is taken to have been acquired for the
purposes of that clause.
Resource tax expenditure
(7) Despite subsections (1), (2), (3)
and (4), resource tax expenditure cannot be incurred by a person, in relation
to a petroleum project, before 1 July 2012.
12 After subparagraph 48(1)(a)(ia)
Insert:
(ib) if section 35E
does not apply in relation to the financial year in which the transaction is or
was entered into, and the look‑back approach is not the valuation approach for vendor’s
interest in the project under Part 2 of Schedule 2—to have incurred
starting base expenditure, in relation to the project, of the starting base
amount in relation to the vendor’s interest; and
13 After subsection 48(2)
Insert:
(2A) Expenditure that the purchaser, or a
purchaser, is taken to have incurred by subparagraph (1)(a)(ib) is taken
to have been so incurred in the first financial year in relation to which
section 35E applies in relation to the project.
14 After paragraph 48A(5)(c)
Insert:
(ca) if:
(i) section 35E does
not apply in relation to the transfer year; and
(ii) the look‑back approach
is not the valuation approach for vendor’s interest in the project under Part 2
of Schedule 2;
to have incurred starting base
expenditure, in relation to the project, of the transfer percentage of the starting
base amount in relation to the vendor’s interest; and
15 After subsection 48A(7)
Insert:
Time when purchaser taken to have incurred expenditure
to which paragraph (5)(ca) applies
(7A) Expenditure that the purchaser, or any of
the purchasers, is taken by paragraph (5)(ca) to have incurred is taken to
have been so incurred in the first financial year in relation to which section 35E
applies in relation to the project.
16 At the end of the Act
Add:
Schedule 2—Starting base
for onshore petroleum projects and the North West Shelf project
Note: See sections 35D and 35E.
Part 1—Preliminary
1
Object of this Schedule
The object of this Schedule is to
recognise the value, when resource tax reforms were announced on 2 May
2010, of:
(a) onshore petroleum projects; and
(b) the North West Shelf project;
by allowing certain amounts to be included in the
deductible expenditure for the projects.
2
Definitions
In this Schedule:
accounting standard has the same meaning as
in the Corporations Act 2001.
arrangement 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.
CGT asset has the meaning given
by subsection 995‑1(1) of the Income Tax Assessment Act 1997.
cost base has the meaning given by subsection
995‑1(1) of the Income Tax Assessment Act 1997.
depreciating asset 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.
hold, in relation to a starting base asset,
has the meaning given by clause 11.
interim expenditure, in relation to a person’s
starting base asset relating to a petroleum project, has the meaning given by
clause 15.
market value has a meaning affected by
Subdivision 960‑S of the Income Tax Assessment Act 1997.
mining, quarrying or prospecting information
has the meaning given by subsection 995‑1(1) of the Income Tax Assessment
Act 1997.
project activity: a thing done is a project
activity in relation to a petroleum project if it is done in carrying
on or providing the operations, facilities and other things (including services
and amenities) of a kind referred to in section 37 or 38 in relation to
the project.
starting base return means a return of the
kind referred to in clause 22, that complies with all the requirements of
that clause and section 388‑75 in Schedule 1 to the Taxation
Administration Act 1953.
Part 2—Choosing a valuation approach
3
Choosing a valuation approach
(1) A person may choose the valuation approach
for:
(a) an interest that, on 30 June
2013, the person holds in an onshore petroleum project or the North West Shelf
project; or
(b) an interest that the person may in
the future hold in such a project, if the project:
(i) does not exist at the
time the person makes the choice; and
(ii) would, if it later
came into existence, be derived from an exploration permit or retention lease
in which the person held an interest at that time.
(2) The choice is not valid unless the person
gives to the Commissioner a valid starting base return.
(3) The choice must specify whether the
person has chosen:
(a) the book value approach; or
(b) the market value approach; or
(c) the look‑back approach.
Note 1: The book value approach and the market value
approach affect a person’s starting base amount under Part 3, through the
valuation of starting base assets under Division 3 of that Part and the
way in which interim expenditure is taken into account under Division 4 of
that Part.
Note 2: There is no starting base amount if the look‑back
approach applies, but expenditure incurred before 1 July 2012 may be
eligible real expenditure: see subsections 45(2), (4) and (5).
(4) The choice is irrevocable after:
(a) 30 August 2013; or
(b) if, under paragraph 22(2)(c), the
Commissioner allows further time for the person to give a starting base
return—after that time elapses.
(5) The choice applies to:
(a) the year of tax commencing on 1 July
2012; and
(b) all later years of tax.
Note: Making a choice obliges the person to give to
the Commissioner a starting base return under clause 22.
4
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, a person who held in that period:
(i) the interest in the
onshore petroleum project or the North West Shelf project; or
(ii) if that interest did
not exist in that period—an interest in the exploration permit or retention
lease mentioned in subparagraph 3(1)(b)(ii);
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 person 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 interest, as
a report that the person prepared.
5 The
valuation approach for starting base assets
The valuation approach for an interest
in an onshore petroleum project or the North West Shelf project is the approach
specified in a choice under clause 3 relating to:
(a) the interest; or
(b) an interest in an exploration
permit or retention lease from which the interest is derived.
Part 3—Starting base amounts
Division 1—Starting base amounts
6 When
a person has a starting base amount
A person has a starting base
amount in relation to an interest in a petroleum project if:
(a) the project is an onshore
petroleum project or is the North West Shelf project; and
(b) the person holds the interest; and
(c) either:
(i) the production licence
relating to the project existed at the start of 1 July 2012; or
(ii) there existed at that
time an exploration permit, or a retention lease, from which is derived the
production licence to which the project relates; and
(d) the look‑back approach is not the
valuation approach for the interest under Part 2; and
(e) there are one or more starting
base assets relating to the interest.
Note: In order for a starting base asset to relate
to an interest in a petroleum project, the production licence relating to the project,
or the retention lease or exploration permit from which it is derived, must
have existed just before 2 May 2010: see clause 10.
7 The
amount of the starting base amount
(1) If, under Part 2, the book value
approach is the valuation approach for an interest in an onshore petroleum
project or the North West Shelf project, the amount of the starting base amount
relating to the interest is the sum of:
(a) the book values, worked out under
Division 3, of all the starting base assets, relating to the interest, to
which subclause (3) applies; and
(b) the adjusted interim expenditure
amounts relating to the interest, worked out under clause 16.
(2) If, under Part 2, the market value
approach is the valuation approach for an interest in an onshore petroleum
project or the North West Shelf project, the amount of the starting base amount
relating to the interest is the sum of:
(a) unless clause 8 applies—the
market values, worked out under Division 3, of all the starting base
assets, relating to the interest, to which subclause (3) applies; and
(b) if clause 8 applies—the
amount worked out under subclause 8(2); and
(c) the amounts of interim expenditure
incurred in relation to the interest.
(3) This subclause applies to a starting base
asset if, at all times between 2 May 2010 and 30 June 2012, the
person holding the asset simultaneously held:
(a) the interest in the project; or
(b) if, for some or all of that
period, the project did not exist—an interest in a retention lease, or in an
exploration permit, from which the project is derived.
Note: This subsection allows for a transfer of the
starting base asset between 2 May 2010 and 30 June 2012, if it
matches a transfer of the interest.
8
Alternative valuation method for coal seam gas projects
(1) This clause applies if:
(a) under Part 2, the market
value approach is the valuation approach for an interest in an onshore
petroleum project; and
(b) the project includes a known
reserve of coal seam gas; and
(c) either:
(i) the interest, or
another interest in the project, was acquired, by any person, between 1 July
2007 and 2 May 2010; or
(ii) a company that held
the interest, or another interest in the project, was acquired, by any person,
between 1 July 2007 and 2 May 2010; and
(d) the person who chose the market
value approach in relation to the interest (the interest holder)
chooses under subclause (4) of this clause to apply the alternative
valuation method for coal seam gas projects.
(2) For the purposes of paragraph 7(2)(b),
the amount worked out under this subclause is:
where:
estimated reserves is:
(a) if paragraph (b) does not
apply—the most recent approved estimate, made before 2 May 2010, of the
proved, probable and possible reserves of coal seam gas for the project,
expressed in gigajoules; or
(b) if the interest holder does not
hold the entire interest in the project—the portion of that estimate, expressed
in gigajoules, of those reserves that reflects the interest holder’s interest
in the project.
production since estimate is:
(a) if paragraph (b) does not
apply—the amount of coal seam gas produced from the project, expressed in
gigajoules, between the day on which that approved estimate was made and 2 May
2010; or
(b) if the interest holder does not
hold the entire interest in the project—the portion of that production,
expressed in gigajoules, that reflects the interest holder’s interest in the
project.
(3) To be an approved estimate for the
purposes of subclause (2), an estimate of the proved, probable and
possible reserves of coal seam gas for the project must have been:
(a) determined in accordance with the
requirements of the document known as the Petroleum Resources Management
System, issued by the Society of Petroleum Engineers, as in force at the time
the estimate was made; and
(b) independently certified as being
determined in accordance with the requirements of that document as so in force.
(4) The interest holder may choose to apply
the alternative valuation method for coal seam gas projects.
(5) The choice is not valid unless the
interest holder gives it to the Commissioner:
(a) in the approved form; and
(b) on or before 30 August 2013,
or within a further time that the Commissioner allows.
(6) The choice is irrevocable, and applies
to:
(a) the year of tax commencing on 1 July
2012; and
(b) all later years of tax.
(7) For the purposes of paragraph (1)(c):
(a) a person holding an interest in
the project is taken to have acquired the interest if, and when, the person is
taken to have acquired that interest for the purposes of clause 18; and
(b) a company holding an interest in
the project is taken to have been acquired if, and when, the company is taken
to have been acquired for the purposes of that clause.
9
Reducing the starting base amount
(1) Despite clause 7, a starting base
amount under that clause is reduced by the sum of all the reductions (if any)
required by subclauses (2) and (3) of this clause in relation to any
starting base assets to which the starting base amount relates.
Use etc. that is not related to project activities
(2) Reduce the starting base amount to the
extent (if any) that the amount relates to a starting base asset that, during
the starting base period relating to the asset, was used, or being constructed
for use, for a purpose other than carrying on project activities relating to
the petroleum project.
Use etc. that equates to excluded expenditure
(3) Reduce the starting base amount (or, if
that amount is reduced under subclause (2), that amount as so reduced) to
the extent (if any) that the amount:
(a) relates to a starting base asset
that, during the starting base period relating to the asset, was used, or being
constructed for use, for carrying on project activities relating to the
petroleum project; but
(b) would have been excluded
expenditure if it had been an amount of expenditure that the person holding the
interest in the project incurred.
(4) However, subclause (3) does not
apply if:
(a) under Part 2, the market
value approach is the valuation approach for the person’s starting base assets
relating to the petroleum project; and
(b) the amount would have been
excluded expenditure only because of paragraph 44(e), (f) or (g).
Note: Subclause (4) ensures that a starting
base amount in relation to an interest in a petroleum project is not reduced
under the market value approach.
Starting base period
(5) The starting base period in
relation to a starting base asset is a period, between 2 May 2010 and 1 July
2012:
(a) during which a person held both
the asset and the interest in the project; and
(b) during which the asset was, for
any purpose, used or being constructed for use.
Division 2—Starting base assets
10
Meaning of starting base asset
(1) Property, or a legal or equitable right
that is not property, is a starting base asset relating to an
interest in an onshore petroleum project or the North West Shelf project if:
(a) either of the following existed
just before 2 May 2010:
(i) the production licence
relating to the project, or (if the project is a combined project) a pre‑combination
project in relation to the project;
(ii) a retention lease, or
exploration permit, from which the project (or pre‑combination project) is
derived; and
(b) on 2 May 2010, the property
or right was used, or being constructed for use, in carrying on project
activities relating to the project (or pre‑combination project); and
(c) the look‑back approach is not the
valuation approach for the interest under Part 2.
(2) Despite subclause (1):
(a) if, under Part 2, the book
value approach is the valuation approach for the interest in the petroleum
project, the following are not starting base assets:
(i) rights and interests
constituting the petroleum project;
(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) a valid choice has not
been made under section 3 specifying the valuation approach for the
interest; or
(ii) a valid starting base
return that covers the property or right has not been given to the Commissioner.
(3) If, under Part 2, the market value
approach is the valuation approach for the person’s starting base assets
relating to the interest in the petroleum project, treat:
(a) any mining, quarrying or
prospecting information; or
(b) any rights to such information;
as property, or a legal or equitable right, for the
purposes of subsection (1).
(4) Despite subsection (1), something
that has already become a starting base asset relating to an interest in a
petroleum project derived from a particular retention lease or exploration
permit cannot become a starting base asset relating to an interest in another
petroleum project derived from that lease or permit.
(5) This Schedule 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.
11 Holding
a starting base asset
(1) A person holds a starting
base asset relating to an onshore petroleum project or the North West Shelf
project if:
(a) the asset is a depreciating asset
that the person holds (within the meaning of section 40‑40 of the Income
Tax Assessment Act 1997); or
(b) the person would hold the asset
(within the meaning of that section) if it were a depreciating asset.
(2) However, a person who is entitled to the
interest in a petroleum project is taken to hold the rights and interests
constituting the interest in the project.
Division 3—Valuation of starting base assets
12 The
book value of a starting base asset
(1) If, under Part 2, the book value
approach is the valuation approach for an interest in an onshore petroleum
project or the North West Shelf project, the book value of a starting base
asset relating to the interest is the book value under subclause (2) or
(3).
(2) 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 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 valuation period
is the long term bond rate for the valuation period under subclause (4).
n is the number of days in that valuation
period, divided by 365.
(3) However, the initial book value of the
asset is zero if the value of the asset is not recorded as mentioned in subclause (2).
(4) The valuation period for the asset is the
period:
(a) starting:
(i) on the day the
financial report mentioned in paragraph (2)(a) was prepared, unless subparagraph (ii)
of this paragraph applies; or
(ii) if the value of the
asset recorded in the accounts from which the financial report was produced is
inconsistent with an auditor’s report on the financial report—on the day of the
auditor’s report; and
(b) ending at the end of 30 June
2012.
13 The
market value of a starting base asset
(1) If, under Part 2, the market value
approach is the valuation approach for an interest in an onshore petroleum
project or the North West Shelf project, the market value of a starting base
asset relating to the interest is the market value of the asset on 1 May
2010.
(2) However, if the asset is a right or
interest constituting the interest in the project, in working out its market
value for the purposes of this section, disregard any liability of the person
to make any payments, of a kind known as private override royalty payments,
relating to:
(a) petroleum recovered from:
(i) the production licence
area in relation to the project; or
(ii) an exploration permit
area for an exploration permit from which the production licence to which the
project relates is derived; or
(iii) a retention lease area
for a retention lease from which the production licence to which the project
relates is derived; or
(b) marketable petroleum commodities
produced from such petroleum.
14
Partial disposal of a starting base asset before 1 July 2012
(1) The book value under clause 12, or
the market value under clause 13, of a starting base asset relating to an
interest that a person holds in an onshore petroleum project or the North West
Shelf project is reduced to the extent (if any) that any of the person’s
interest in the asset is disposed of during the period:
(a) starting on the day provided under
subclause (2); and
(b) ending at the end of 30 June
2012.
(2) The period starts:
(a) if, under Part 2, the book
value approach is the valuation approach for the interest:
(i) on the day of the
financial report (if any) mentioned in paragraph 12(2)(a) of this Schedule in
relation to the accounts in which the value of the asset is recorded; or
(ii) if subparagraph (i)
of this paragraph does not apply—on 2 May 2010; or
(b) if, under Part 2, the market
value approach is the valuation approach for the interest—on 2 May 2010.
(3) Treat, for the purposes of this clause,
as a disposal of part of the person’s interest in the starting base asset an
arrangement that has the effect of transferring to another person part of the
benefits or entitlements that the person has in relation to the asset.
Division 4—Interim expenditure
15
Meaning of interim expenditure
(1) An amount of expenditure that a person
incurs relating to an interest in an onshore petroleum project or the North
West Shelf project is interim expenditure relating to the
interest to the extent that:
(a) the amount:
(i) relates to a
depreciating asset that is used, or being constructed for use, on 1 July
2012 in carrying on project activities relating to the project; and
(ii) is included in the
cost of the asset under Subdivision 40‑C of the Income Tax Assessment
Act 1997; and
(iii) was incurred during
the period starting on the day provided under subclause (3) or (4) and
ending at the end of 30 June 2012; or
(b) the amount:
(i) relates to a CGT asset
that is not a depreciating asset and that is used, or being constructed for
use, on 1 July 2012 in carrying on project activities relating to the
project; and
(ii) is included in the
cost base of the asset; and
(iii) was incurred during
the period starting on the day provided under subclause (3) or (4) and
ending at the end of 30 June 2012; or
(c) the amount:
(i) is mining capital
expenditure (within the meaning of the Income Tax Assessment Act 1997)
relating to project activities relating to the project; and
(ii) was incurred between 2 May
2010 and 30 June 2012.
(2) However, if the 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.
Start of the expenditure period
(3) If, under Part 2, the book value
approach is the valuation approach for the interest in the petroleum project,
the period starts:
(a) if subclause (5) applies to
the asset:
(i) on the day of the
financial report (if any) mentioned in paragraph 12(2)(a) of this Schedule in
relation to the accounts in which the value of the asset is recorded; or
(ii) if subparagraph (i)
of this paragraph does not apply—on 2 May 2010; or
(b) otherwise—on the first day, before
the end of 30 June 2012, from which the person held the asset at all times
until the end of 30 June 2012.
Example: The person bought an asset on 1 January 2011
and sold it on 1 May 2011. The person 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 person did not hold the asset until the end of 30 June 2012,
as required by paragraph (3)(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 person held the asset until the
end of 30 June 2012.
(4) If, under Part 2, the market value
approach is the valuation approach for the interest in the petroleum project,
the period starts:
(a) if subclause (5) applies to
the asset—on 2 May 2010; or
(b) otherwise—on the first day, before
the end of 30 June 2012, from which the person held the asset at all times
until the end of 30 June 2012.
(5) This subclause applies to an asset if, at
all times between 2 May 2010 and 30 June 2012, the person holding the
asset simultaneously held:
(a) the interest in the project; or
(b) if, for some or all of that
period, the project did not exist—an interest in a retention lease, or in an
exploration permit, from which the project is derived.
(6) For the purposes of subclauses (3)
to (5), an amount of expenditure to which paragraph (1)(c) applies is
taken to be an asset that the person incurring the expenditure holds from the
day the expenditure was incurred until the day on which the person ceases to
hold the interest in the project.
Excluded expenditure
(7) Despite subclause (1), 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.
16
Adjusted interim expenditure amounts
(1) If:
(a) under Part 2, the book value
approach is the valuation approach for an interest in an onshore petroleum
project or the North West Shelf project; and
(b) a person holding an interest in
the project incurred an amount of interim expenditure relating to the interest;
there is an adjusted interim expenditure amount relating
to the interest.
(2) The adjusted interim expenditure amount
is as follows:
where:
long term bond rate for the interim valuation period
is the long term bond rate for the interim valuation period under subclause (3).
n is the number of days in the interim
valuation period, divided by 365.
(3) The interim valuation period for an
amount of interim expenditure is the period:
(a) starting on the day on which the
person holding the interest in the petroleum project incurred the amount; and
(b) ending at the end of 30 June
2012.
17
Partial disposal of an asset before 1 July 2012
(1) If:
(a) a person incurs interim expenditure
relating to an interest that a person holds in an onshore petroleum project or
the North West Shelf project; and
(b) the interim expenditure relates to
a depreciating asset or a CGT asset; and
(c) any of the person’s interest in
the asset is disposed of between 2 May 2010 and 1 July 2012;
the amount of the interim expenditure is taken to be
reduced to the extent the person’s interest in the asset is disposed of.
(2) Treat, for the purposes of this clause,
as a disposal of part of the person’s interest in the asset an arrangement that
has the effect of transferring to another person part of the benefits or
entitlements that the person has in relation to the asset.
Part 4—The look‑back approach
Note: Section 45 deals generally with when
eligible real expenditure may be incurred in relation to onshore petroleum
projects and the North West shelf project, including under the look‑back
approach. This Part deals with some specific issues under the look‑back
approach, in particular issues relating to the costs of acquiring projects.
18
Expenditure incurred in acquiring interests in petroleum projects
Interests acquired between 1 July 2007 and 2 May
2010
(1) If:
(a) under Part 2, the look‑back
approach is the valuation approach for an interest in an onshore petroleum
project or the North West Shelf project; and
(b) during the period between 1 July
2007 and 2 May 2010, either or both of the following events occurred:
(i) a person acquired the
interest;
(ii) if the person holding
the interest is a company—the person was acquired by another company;
the starting base expenditure, incurred by the person
referred to in paragraph (b) in relation to the last such event to occur
in relation to the interest during that period, includes the expenditure (acquisition
expenditure) referred to in subsection (2).
(2) The acquisition expenditure is whichever
of the following is applicable:
(a) the expenditure incurred by the
person in acquiring the interest;
(b) the expenditure incurred by the
other company in making the acquisition.
(3) Despite subclause (1), the starting
base expenditure incurred by the person in relation to the project does not
include acquisition expenditure to the extent (if any) that the acquisition
expenditure reflects the value of things that are not project activities
relating to the project.
(4) Despite subclause (1), the starting
base expenditure incurred by the person in relation to the project does not
include acquisition expenditure to the extent that the expenditure relates to
an acquired exploration expenditure amount.
(5) Acquisition expenditure included under subclause (1)
in the starting base expenditure incurred by the person is taken, for the
purposes of this Act, to have been incurred on 2 May 2010.
Interests acquired before 30 June 2007
(6) If, under Part 2, the look‑back
approach is the valuation approach for an interest in an onshore petroleum
project or the North West Shelf project, the eligible real expenditure incurred
by the person holding the interest does not include:
(a) if the person acquired the
interest before 30 June 2007—expenditure (acquisition expenditure)
incurred by the person in acquiring the interest; or
(b) if the person is a company that
was acquired by another company before 30 June 2007—expenditure (acquisition
expenditure) incurred by the other company in making the acquisition.
Acquisitions
(7) For the purposes of this clause and
clause 19, the person holding an interest in an onshore petroleum project
or the North West Shelf project is taken to have acquired the interest if and
only if:
(a) in a case where the project
existed on 2 May 2010—the person purchased the interest; or
(b) in a case where the project did
not exist on 2 May 2010—the person purchased:
(i) the exploration permit
or retention lease from which the production licence to which the project
relates is derived; or
(ii) an interest in the
exploration permit or retention lease.
The acquisition is taken to have occurred when the transaction
was first entered into that, when complete, had the effect of transferring the interest,
or the permit or lease.
(8) For the purposes of this clause and
clause 19:
(a) a company is taken to have been
acquired by another company if and only if the company became a subsidiary of
the other company; and
(b) the acquisition is taken to have
occurred when:
(i) the transaction was
first entered into that, when complete, had the effect of the first becoming a
subsidiary of the other company; or
(ii) an agreement to enter
into that transaction;
was first entered into; and
(c) except for the purposes of subclause (6)
of this clause, the acquisition expenditure relating to the acquisition
includes any expenditure the company incurred in acquiring any interest in the
other company:
(i) during the period between
1 July 2007 and 2 May 2010; or
(ii) under an agreement
entered into during the period between 1 July 2007 and 2 May 2010.
Note: Section 2B defines a subsidiary.
(9) However, paragraph (8)(c) does not
apply to acquisition expenditure to the extent (if any) that the acquisition
expenditure reflects the value of things that are not project activities
relating to the petroleum project in which the other company holds an interest.
19
Acquired exploration expenditure amounts
(1) If:
(a) under Part 2, the look‑back
approach is the valuation approach for an interest in an onshore petroleum
project or the North West Shelf project; and
(b) either:
(i) the person holding the
interest acquired the interest during the period between 1 July 2007 and 2 May
2010; or
(ii) the person holding the
interest is a company that was acquired during the period between 1 July
2007 and 2 May 2010; and
(c) expenditure that:
(i) the person holding the
interest incurred in acquiring the interest; or
(ii) the person making the
acquisition of the company holding the interest incurred in making the
acquisition;
would, apart from subclause 18(4),
be included under clause 18 in the starting base expenditure incurred by
the person holding the interest;
the person holding the interest is taken, for the purposes
of this Act, to have an acquired exploration expenditure amount in relation to
the project equal to the amount of acquisition expenditure allocated to
exploration assets and evaluation assets, as recorded in a financial report
that satisfies subclause (2).
(2) The financial report satisfies this
subclause if:
(a) it has been audited; and
(b) it was prepared in accordance with
the accounting standards (within the meaning of the Corporations Act 2001);
and
(c) it relates to a period that
includes the day of the acquisition.
(3) The acquired exploration expenditure
amount is taken, for the purposes of this Act, to be acquired exploration
expenditure incurred by the person holding the interest on 2 May 2010.
20
Restriction applying the look‑back approach in certain cases
Despite section 45 and clauses 18
and 19, if:
(a) under Part 2, the look‑back
approach is the valuation approach for an interest in an onshore petroleum
project or the North West Shelf project; and
(b) particular expenditure would,
apart from this clause, be eligible real expenditure incurred by a person in
relation to the project; and
(c) either:
(i) if the expenditure was
incurred between 1 July 2010 and 30 June 2012—the person has not kept
and retained records, relating to the expenditure, that would meet the
requirements of section 112; or
(ii) if the expenditure was
incurred between 1 July 2002 and 30 June 2010—the person has not kept
and retained records that enable the amount and nature of the expenditure to be
reasonably substantiated;
the eligible real expenditure incurred by the person in
relation to the project does not include that expenditure.
21
Certain receipts taken to be assessable receipts
If:
(a) under Part 2, the look‑back
approach is the valuation approach for an interest in an onshore petroleum
project or the North West Shelf project; and
(b) between the starting base day
under subsection 45(5) and 30 June 2012, the person incurred, in relation
to particular property, expenditure that would have been eligible real
expenditure incurred by the person in relation to the project if the person
were to incur it after 30 June 2012; and
(c) between that starting base day and
30 June 2012, circumstances arose relating to the property that would have
caused an assessable receipt of one of the following kinds to be derived in
relation to the property if those circumstances were to arise after 30 June
2012:
(i) an assessable property
receipt;
(ii) an assessable
miscellaneous compensation receipt;
(iii) an assessable employee
amenities receipt;
an amount equal to what would have been the amount of that
assessable receipt is taken, for the purposes of this Act, to be an assessable
receipt of that kind derived by the person, in relation to the project, in the
financial year in which the circumstances arose.
Part 5—Starting base returns and assessments
22
Starting base returns
(1) A person must give to the Commissioner a
starting base return if the person wishes to choose a valuation approach under
clause 3 in relation to a petroleum project.
(2) A starting base return is not valid
unless:
(a) it is in the approved form; and
(b) it is signed by or on behalf of
the person giving the return; and
(c) it is given to the Commissioner on
or before 30 August 2013, or within a further time that the Commissioner
allows.
(3) Without limiting the information that the
approved form may require, the starting base return must provide the following
information:
(a) the valuation approach chosen under
clause 3 in relation to the petroleum project;
(b) if the book value approach or
market value approach was chosen—the amount of the starting base amount
relating to the person’s interest in the project;
(c) if the look‑back approach was
chosen—the amount of eligible real expenditure incurred before 1 July 2012
relating to the person’s interest in the project.
23
Starting base assessments
(1) If a person has given to the Commissioner
a valid starting base return relating to a petroleum project, the Commissioner
is taken to have made, in accordance with what the person specified in the
return, an ascertainment (a starting base assessment) of:
(a) if the book value approach or
market value approach is the valuation approach relating to the person’s interest
in the project—the amount of the starting base amount relating to the person’s
interest in the project; or
(b) if the look‑back approach is the
valuation approach relating to the person’s interest in the project—the amount and
kind of eligible real expenditure incurred before 1 July 2012 relating to
the person’s interest in the project.
(2) The starting base assessment is taken to
have been made on the day the starting base return is given to the
Commissioner.
(3) On and after the day the Commissioner is
taken to have made the starting base assessment, the return is taken to be a
notice of the starting base assessment:
(a) under the hand of the
Commissioner; and
(b) given to the person on the day the
Commissioner is taken to have made the starting base assessment.
(4) The starting base assessment is taken,
from the time it is made, to be an assessment for the purposes of:
(a) section 65 (validity of
assessments); and
(b) section 66 (objections to
assessments); and
(c) Division 3 of Part VI
(amendment of assessments); and
(d) section 106 (evidence).
(5) Without limiting subclause (4), from
the first time an assessment (a general assessment) is made of
the person’s taxable profit (or that the person has no taxable profit), in
relation to the project and a year of tax commencing on or after 1 July
2012:
(a) the starting base assessment is
taken, for the purposes of this Act, to form part of the general assessment; and
(b) any objection against the general
assessment under section 66 must not relate to matters to which the
starting base assessment relates; and
(c) any amendment of the general
assessment under Division 3 of Part VI must not relate to matters to
which the starting base assessment relates, except to the extent necessary to
give effect to the starting base assessment (including the starting base
assessment as amended).
(6) Without limiting subsection 67(2), the
Commissioner may amend a general assessment at any time to the extent necessary
to give effect to the starting base assessment (including the starting base
assessment as amended).
17 Transitional
For the purposes of applying clause 13 of Schedule 2 to
the Petroleum Resource Rent Tax Assessment Act 1987 in relation to working
out the market value of a starting base asset, disregard any liability relating
to receipts to which subitem 13(1) of Schedule 2 to the Petroleum
Resource Rent Tax Assessment Amendment Act 2011 applies.
Part 2—Other amendments
Petroleum Resource Rent Tax
Assessment Act 1987
18 Section 2 (at the end of paragraphs (a) to (f)
of the definition of long term bond rate)
Add “and”.
19 Section 2 (paragraph (h) of the definition of long
term bond rate)
After “subsequent financial year”, insert “that is earlier than
the financial year commencing on 1 July 2012”.
20 Section 2 (at the end of the definition of long
term bond rate)
Add:
; and (i) in relation to the financial year
commencing on 1 July 2012 and any subsequent financial year—has the same
meaning as in subsection 995‑1(1) of the Income Tax Assessment Act 1997;
and
(j) in relation to a period that is
not a financial year—has the same meaning as in subsection 995‑1(1) of the Income
Tax Assessment Act 1997.
21 Section 2 (at the end of the definition of post‑30 June
2008 petroleum project)
Add “, and includes an onshore petroleum project and the North‑West
shelf project”.
22 Section 2
Insert:
pre‑licence area, in relation to a production
licence, means:
(a) if the production licence was
derived from an exploration permit—the exploration permit area of the exploration
permit; or
(b) if the production licence was
derived from a retention lease—either:
(i) the retention lease
area of the retention lease; or
(ii) the exploration permit
area of the exploration permit to which the retention lease is related.
23 Section 2 (definition of transferable exploration
expenditure)
Omit “the Schedule”, substitute “Schedule 1”.
24 Section 2 (notes 1 and 2 at the end of the
definition of transferable exploration expenditure)
Omit “the Schedule”, substitute “Schedule 1”.
25 After section 4
Insert:
4A
Holding an interest—petroleum project
Petroleum projects generally
(1) For the purposes of this Act, a person is
taken to have held, at a particular time, an interest in relation to a
petroleum project if the person was, at that time, entitled to receive receipts
from the sale of petroleum, or of marketable petroleum commodities produced
from petroleum, recovered from:
(a) if the time is a time after the
production licence in relation to the project came into force—the production
licence area in relation to the project; or
(b) if the time is a time before the
production licence in relation to the project came into force—a pre‑licence
area in relation to the production licence.
(2) However, subsection (1) does not
apply if the project is a combined project, the Bass Strait project or the
North West Shelf project.
Combined projects
(3) For the purposes of this Act, a person is
taken to have held, at a particular time, an interest in relation to a combined
project if the person was, at that time, entitled to receive receipts from the
sale of petroleum, or of marketable petroleum commodities produced from
petroleum, recovered from:
(a) if the time is a time after the
project combination certificate came into force—the production licence areas in
relation to the project; or
(b) if the time is:
(i) a time before the
project combination certificate came into force; and
(ii) a time after the
earliest of the production licences in relation to the pre‑combination projects
came into force;
one or more of the production
licence areas in relation to the pre‑combination projects; or
(c) if the time is a time before the
earliest of the production licences in relation to the pre‑combination projects
came into force—the earliest pre‑licence area to arise in relation to any of
the pre‑combination projects.
The Bass Strait project and the North West Shelf
project
(4) For the purposes of this Act, a person is
taken to have held, at a particular time, an interest in relation to:
(a) the Bass Strait project; or
(b) the North West Shelf project;
if the person was, at that time, entitled to receive
receipts from the sale of petroleum, or of marketable petroleum commodities
produced from petroleum, recovered from the production licence areas in
relation to that project.
4B
Holding an interest—exploration permit
For the purposes of this Act, a person
is taken to have held an interest in relation to an exploration permit at a
particular time if the person was, at that time, entitled to receive receipts
from the sale of petroleum, or marketable petroleum commodities produced from
petroleum, recovered from the exploration permit area.
4C
Holding an interest—retention lease
For the purposes of this Act, a person
is taken to have held an interest in relation to a retention lease at a
particular time if the person was, at that time, entitled to receive receipts
from the sale of petroleum, or marketable petroleum commodities produced from
petroleum, recovered from:
(a) if the time is a time after the
retention lease was granted—the retention lease area; or
(b) if the time is a time before the
retention lease was granted—the exploration permit area of the exploration
permit to which the retention lease is related.
26 Subsection 22(1) (note)
Omit “the Schedule”, substitute “Schedule 1”.
27 Subsection 35A(1)
Omit “the Schedule”, substitute “Schedule 1”.
28 Subsection 35A(1) (note)
Omit “the Schedule”, substitute “Schedule 1”.
29 Subsection 35A(2)
Omit “the Schedule” (wherever occurring), substitute “Schedule 1”.
30 Subsection 35A(2) (note)
Omit “the Schedule”, substitute “Schedule 1”.
31 Subsection 35B(1)
Omit “the Schedule”, substitute “Schedule 1”.
32 Subsection 35B(1) (note)
Omit “the Schedule”, substitute “Schedule 1”.
33 Subsection 35B(2)
Omit “the Schedule” (wherever occurring), substitute “Schedule 1”.
34 Subsection 35B(2) (note)
Omit “the Schedule”, substitute “Schedule 1”.
35 Section 36A (note)
Omit “the Schedule”, substitute “Schedule 1”.
36 Subsection 36B(1) (note)
Omit “the Schedule”, substitute “Schedule 1”.
37 At the end of section 44
Add:
Note: Under the look‑back approach under Schedule 2,
some excluded expenditure relating to onshore petroleum projects or the North
West Shelf project may be included in eligible real expenditure.
38 Subsections 45A(2) and (4), 45B(2) and (4) and 45D(2)
Omit “the Schedule”, substitute “Schedule 1”.
39 Subparagraph 45D(3)(b)(ii)
Omit “the Schedule”, substitute “Schedule 1”.
40 Paragraphs 45E(1)(b) and (c) and (3)(c)
Omit “the Schedule”, substitute “Schedule 1”.
41 Subparagraph 48(1)(a)(ia)
Omit “the Schedule”, substitute “Schedule 1”.
42 Paragraph 48A(5)(c)
Omit “the Schedule”, substitute “Schedule 1”.
43 At the end of section 61
Add:
Note: For starting base assessments, see clause 23
of Schedule 2.
44 At the end of subsection 67(2)
Add:
Note: The Commissioner may also amend an assessment
at any time to give effect to a starting base assessment, see subclause 23(6)
of Schedule 2.
45 Paragraphs 97(1A)(c) and 98A(1)(b)
Omit “the Schedule”, substitute “Schedule 1”.
46 Schedule (heading)
Repeal the heading, substitute:
Schedule 1—Provisions relating to incurring and transfer of exploration
expenditure on or after 1 July 1990
47 Clause 1 of the Schedule (definition of pre‑licence
area)
Repeal the definition.
48 Clauses 2 and 3 of the Schedule
Repeal the clauses.
49 Part 1A of the Schedule (heading)
Repeal the heading, substitute:
Part 1A—Special rules
relating to the transfer of certain expenditure
50 At the end of Part 1A of the Schedule
Add:
4C
Certain onshore or North West Shelf expenditure is not transferable
Despite paragraphs 7(b), 8(5)(c), 11(b),
12(4)(c) and 18(3)(e) of this Schedule and subclauses 18(1) and 18(2) of this
Schedule, amounts of exploration expenditure incurred, before 1 July 2012,
in relation to:
(a) an onshore petroleum project; or
(b) the North West Shelf project;
are not transferable under section 45A, 45B or 45C.
51 Clause 5 of the Schedule (paragraph (a) of the
definition of notional taxable profit)
After “class 2 GDP factor expenditure”, insert “, resource tax
expenditure, acquired exploration expenditure, starting base expenditure”.
52 Clause 9 of the Schedule (paragraph (a) of the
definition of notional taxable profit)
After “class 2 GDP factor expenditure”, insert “, resource tax
expenditure, acquired exploration expenditure, starting base expenditure”.
Schedule 5—Consolidated groups
Part 1—Main amendments
Petroleum Resource Rent Tax
Assessment Act 1987
1 At the end of Part V
Add:
Division 8—Consolidated groups
58N
Choice to consolidate
(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.
(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 choice is not valid unless it is in
the approved form, and the head company or the provisional head company gives
it to the Commissioner:
(a) within 21 days after making the
choice; or
(b) within such further period as the
Commissioner allows.
(4) The choice is irrevocable, and:
(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: The head company’s interests in petroleum
projects just before a consolidated group or MEC group ceases to exist would be
transferred at the time the group ceases to exist: see section 58R.
58P
Single entity rule
(1) If a person is a subsidiary member of the
consolidated group or MEC group for any period in which the choice is in effect,
the person 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 persons, during
that period.
Note: Despite the single entity rule, a subsidiary
member of the group is jointly and severally liable for a 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 head company’s and
subsidiary member’s interests in onshore petroleum projects for any year of tax
in which any of the period occurs or any later year of tax; and
(b) working out any tax that is
payable in relation to such an interest for any such year of tax; and
(c) working out assessable receipts
and deductible expenditure arising in relation to such an interest for any such
year of tax.
Examples: The following are some examples of consequences of
the single entity rule:
(a) a subsidiary member’s interest in an onshore petroleum
project becomes a part of the head company’s aggregated interest in the project;
(b) a subsidiary member’s assessable receipts and
deductible expenditure relating to the interest are inherited by the head
company along with the interest;
(c) liabilities that a subsidiary member has to pay tax 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.
58Q Interests
taken to be transferred to head company etc. on joining
If, because of the application of
section 58P, a person is taken at a particular time to start being part of
the head company or provisional head company, section 48 applies as if
each of the person’s interests in onshore petroleum projects just before that
time had been transferred to the head company or provisional head company.
58R Interests
taken to be transferred to leaving entity on leaving
(1) If:
(a) at a particular time, a person
stops being taken, because of section 58P, to be part of the head company
or provisional head company; and
(b) the entitlement comprising the person’s
interest in an onshore petroleum project just after that time is all of the
entitlement comprising the company’s interest in the project just before that
time;
section 48 applies as if the person’s interest in the
project just after that time had been transferred from the company under a
transaction of a kind referred to in subsection 48(1A).
(2) If:
(a) at a particular time, a person
stops being taken, because of section 58P, to be part of the head company
or provisional head company; and
(b) the entitlement comprising the person’s
interest in an onshore petroleum project just after that time is part, but not
all, of the entitlement comprising the company’s interest in the project just
before that time;
section 48A applies as if the person’s interest in
the project just after that time had been transferred from the company under a
transaction of a kind referred to in subsection 48A(1).
58S
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 subsection 58R(1) or
(2) (as the case requires) in relation to the member ceasing to be a member of
the relinquishing group as if section 58P did not apply in relation to the
member just after the acquisition time; and
(b) then apply section 58Q in
relation to the member becoming a member of the acquiring group as if section 58P
did not apply in relation to the member just before the acquisition time.
58T
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 this Act:
(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 referred to in
subsection 58P(2) in relation to a year of tax 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;
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.
58U
Effect of change of head company or provisional head company of a MEC group
(1) For the purposes referred to in
subsection 58P(2) in relation to a year of tax:
(a) if:
(i) a company (the old
head company) is the head company of a *MEC group at the end of an income year
(within the meaning of the Income Tax Assessment Act 1997); 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 (within
the meaning of that Act) 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, 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.
(2) However, this section does not apply in
relation to a year of tax ending on or before the transition time.
58V
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 referred to in
subsection 58P(2) in relation to a year of tax 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 58N(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 (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).
Part 2—Other amendments
Income Tax Assessment Act 1997
2 At the end of subsection 703‑50(1)
Add:
Note 3: A group that is consolidated for income tax
purposes may also consolidate for the purposes of the Petroleum Resource
Rent Tax Assessment Act 1987 (see section 58N of that Act).
3 At the end of subsection 719‑50(1)
Add:
Note 3: A group that is consolidated for income tax
purposes may also consolidate for the purposes of the Petroleum Resource
Rent Tax Assessment Act 1987 (see section 58N of that Act).
4 Subsection 721‑10(2) (at the end of the table)
Add:
|
95
|
subsection 82(1) or (2) of the Petroleum Resource Rent
Tax Assessment Act 1987 (when tax assessed under
that Act is payable)
|
the year of tax (within the
meaning of that Act) to which the tax assessed under that Act relates
|
|
100
|
subsection 82(3) of the Petroleum Resource Rent Tax
Assessment Act 1987 (shortfall interest charge on shortfall in tax assessed under that Act)
|
the year of tax (within the
meaning of that Act) to which the *shortfall
interest charge relates
|
|
105
|
section 95 of the Petroleum Resource Rent Tax
Assessment Act 1987 (when instalment of tax is payable)
|
the instalment period (within
the meaning of that Act) in relation to the instalment
|
|
110
|
subsection 98C(4) of the Petroleum Resource Rent Tax
Assessment Act 1987 (when instalment transfer interest charge is due)
|
the instalment transfer charge
period (within the meaning of that Act) in relation to the charge
|
5 At the end of section 721‑10
Add:
(5) Items 95, 100, 105 and 110 of the
table in subsection (2) only apply in relation to tax‑related liabilities
that are due and payable by the *head company because it chooses, under section 58N of
the Petroleum Resource Rent Tax Assessment Act 1987, to apply Division 8
of Part V of that Act in relation to the *consolidated group.
Petroleum Resource Rent Tax
Assessment Act 1987
6 Section 2
Insert:
consolidated group has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
7 Section 2
Insert:
created:
(a) in relation to a consolidated
group—has the meaning given by section 703‑15 of the Income Tax
Assessment Act 1997; and
(b) in relation to a MEC group—has the
meaning given by section 719‑25 of that Act.
8 Section 2 (definition of head company)
Repeal the definition, substitute:
head company:
(a) of a designated company group—has
the meaning given by section 2BA; and
(b) of a consolidated group or a MEC
group—has the meaning given by subsection 995‑1(1) of the Income Tax
Assessment Act 1997.
9 Section 2
Insert:
MEC group has the meaning given by subsection
995‑1(1) of the Income Tax Assessment Act 1997.
10 Section 2
Insert:
member:
(a) in relation to a consolidated
group—has the meaning given by section 703‑15 of the Income Tax
Assessment Act 1997; and
(b) in relation to a MEC group—has the
meaning given by section 719‑25 of that Act.
11 Section 2
Insert:
provisional head company of a MEC group has
the meaning given by subsection 995‑1(1) of the Income Tax Assessment Act
1997.
12 Section 2
Insert:
subsidiary member has the meaning given by
subsection 995‑1(1) of the Income Tax Assessment Act 1997.
Schedule 6—Other amendments
Part 1—Amendments related to clean energy package
Petroleum Resource Rent Tax
Assessment Act 1987
1 At the end of subsection 28(1)
Add:
; (c) amounts receivable by the person
in respect of the sale of free carbon units (within the meaning of the Clean
Energy Act 2011):
(i) that the person
received under the Jobs and Competitiveness Program (within the meaning of that
Act); and
(ii) that relate to the
petroleum project.
2 After paragraph 44(i)
Insert:
(ia) payments of unit shortfall charge
under the Clean Energy Act 2011; or
Part 2—Amendments related to repeal of an Act
Petroleum Resource Rent Tax Act 1987
3 The whole of the Act
Repeal the Act.
4 Application
The amendment made by item 3 of this Schedule applies in
relation to the year of tax beginning on 1 July 1986 and later years of
tax.
5 Transitional
To the extent that:
(a) a person has paid or pays, in
relation to a year of tax ending before the commencement of this Schedule, an
amount in respect of a liability for tax that the Petroleum Resource Rent
Tax Act 1987 purported to impose on the person for that year; and
(b) the amount has not been repaid to
the person;
the payment of the amount is taken, by this item, to have
discharged or to discharge the person’s liability to pay tax imposed by the Petroleum
Resource Rent Tax (Imposition—General) Act 2011, the Petroleum Resource
Rent Tax (Imposition—Customs) Act 2011 or the Petroleum Resource Rent
Tax (Imposition—Excise) Act 2011 (as the case requires) in relation to that
year of tax.
Part 3—Other amendments
Crimes (Taxation Offences) Act 1980
6 Subsection 3(1) (paragraph (a) of the definition of petroleum
resource rent tax)
Repeal the paragraph, substitute:
(a) tax imposed by any of the
following:
(i) the Petroleum
Resource Rent Tax (Imposition—General) Act 2011;
(ii) the Petroleum
Resource Rent Tax (Imposition—Customs) Act 2011;
(iii) the Petroleum
Resource Rent Tax (Imposition—Excise) Act 2011;
as assessed under the Petroleum
Resource Rent Tax Assessment Act 1987; and
Excise Tariff Act 1921
7 Subsection 3(1) (definition of Resource Rent Tax area)
Repeal the definition, substitute:
Resource Rent Tax area means an area that,
for the purposes of the Petroleum Resource Rent Tax Assessment Act 1987:
(a) is the:
(i) exploration permit
area of an exploration permit other than one of the North West Shelf
exploration permits; or
(ii) retention lease area
of a retention lease that is related to an exploration permit other than one of
the North West Shelf exploration permits; or
(iii) production licence
area of a production licence that is related to an exploration permit other
than one of the North West Shelf exploration permits; and
(b) is not an onshore area within the
meaning of that Act.
Income Tax Assessment Act 1997
8 Subsection 995‑1(1) (definition of petroleum resource
rent tax)
Repeal the definition, substitute:
petroleum resource rent tax means tax imposed
by any of the following:
(a) the Petroleum Resource Rent Tax
(Imposition—General) Act 2011;
(b) the Petroleum Resource Rent Tax
(Imposition—Customs) Act 2011;
(c) the Petroleum Resource Rent Tax
(Imposition—Excise) Act 2011;
as assessed under the Petroleum Resource Rent Tax
Assessment Act 1987.
Petroleum Resource Rent Tax
Assessment Act 1987
9 Section 2 (definition of tax)
Repeal the definition, substitute:
tax means tax imposed by any of the
following:
(a) the Petroleum Resource Rent Tax
(Imposition—General) Act 2011;
(b) the Petroleum Resource Rent Tax
(Imposition—Customs) Act 2011;
(c) the Petroleum Resource Rent Tax
(Imposition—Excise) Act 2011.
10 After paragraph 31(a)
Insert:
; or (aa) assessable tolling receipts; or
11 Paragraphs 34A(1)(b), (2)(b), (2)(c) and (3)(b)
Omit “section 48”, substitute “Division 5”.
12 Subsection 98B(3) (definition of instalment transfer
tax)
Omit “Petroleum Resource Rent Tax Act 1987”, substitute “Petroleum
Resource Rent Tax (Imposition—General) Act 2011”.