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This is a Bill, not an Act. For current law, see the Acts databases.
MINERALS RESOURCE RENT TAX BILL 2011
2010-2011
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Minerals Resource Rent Tax Bill 2011
No. , 2011
(Treasury)
A Bill for an Act about a minerals resource rent
tax, and for related purposes
i Minerals Resource Rent Tax Bill 2011 No. , 2011
Contents
Chapter 1--Introduction
1
Part 1-1--Preliminary
1
Division 1--Preliminary
1
1-1 Short
title
...........................................................................................
1
1-5 Commencement
.................................................................................
2
1-10 Object
of
this Act ............................................................................... 2
1-15 Administration
of this Act ................................................................. 2
1-20
Extension to external Territories ........................................................ 2
1-25 Extraterritorial application ................................................................. 2
Part 1-2--A guide to this Act
3
Division 2--Overview of this Act
3
2-1
What this Act is about ........................................................................ 3
2-5
How this Act is arranged ................................................................... 4
Division 3--Defined terms
5
3-1
When defined terms are identified ..................................................... 5
3-5
When terms are not identified ............................................................ 5
3-10 Identifying
the
defined
term in a definition ....................................... 5
Division 4--Status of guides and other non-operative material
6
4-1 Non-operative
material ...................................................................... 6
4-5 Guides
................................................................................................
6
4-10 Other
material
....................................................................................
6
Chapter 2--General liability rules
7
Part 2-1--Core rules
7
Division 10--Core rules
7
10-1
A miner's liability for MRRT ............................................................ 7
10-5
The MRRT liability for a mining project interest .............................. 7
10-10 MRRT
allowances
.............................................................................
8
10-15
The effect of low profits on a miner's liability for MRRT ................ 8
10-20
Payment of MRRT ............................................................................. 9
10-25 MRRT
years
.......................................................................................
9
Part 2-2--Mining project interests
10
Division 15--Mining project interests
10
Guide to Division 15
10
Minerals Resource Rent Tax Bill 2011 No. , 2011 ii
15-1 What
this
Division is about .............................................................. 10
Operative provisions
10
15-5
When an entity has a mining project interest ................................... 10
15-10
Iron ore mining project interests to be kept separate ....................... 13
15-15 Meaning
of
production right ............................................................ 13
15-20 Meaning
of
project area .................................................................. 14
Division 20--Taxable resources
15
Guide to Division 20
15
20-1 What
this
Division is about .............................................................. 15
Operative provisions
15
20-5 What
are
taxable resources .............................................................. 15
Part 2-3--Mining profits
17
Division 25--Mining profits
17
Guide to Division 25
17
25-1 What
this
Division is about .............................................................. 17
Operative provisions
17
25-5
How to work out the mining profit for a mining project
interest ............................................................................................. 17
Division 30--Mining revenue
19
Guide to Division 30
19
30-1 What
this
Division is about .............................................................. 19
Subdivision 30-A--A miner's mining revenue
19
30-5 A
miner's
mining revenue ................................................................ 20
Subdivision 30-B--Revenue from supply, export or use of taxable
resources
20
30-10
When amounts from taxable resources etc. are included in
mining revenue ................................................................................ 20
30-15
Meaning of mining revenue event ................................................... 21
30-20 Meaning
of
initial supply ................................................................. 22
30-25
Working out amounts to be included ............................................... 22
30-30 Meaning
of
arm's length consideration ........................................... 26
30-35 When
supplies
are made .................................................................. 26
Subdivision 30-C--Other revenue
26
30-40
Recoupment or offsetting of mining expenditure ............................ 27
30-45
Recoupment of payments that give rise to royalty credits ............... 28
30-50 Compensation
for
loss
of taxable resources ..................................... 28
30-55
Amounts that do not relate to a particular mining revenue
event ................................................................................................. 29
iii Minerals Resource Rent Tax Bill 2011 No. , 2011
Subdivision 30-D--Miscellaneous
29
30-60
No double counting .......................................................................... 29
30-65
Expenditure incurred in causing amounts to be received etc. .......... 29
30-70
Amounts taken to be received .......................................................... 30
30-75
GST and increasing adjustments ...................................................... 30
Division 35--Mining expenditure
31
Guide to Division 35
31
35-1 What
this
Division is about .............................................................. 31
Subdivision 35-A--A miner's mining expenditure
31
35-5 A
miner's
mining expenditure ......................................................... 31
35-10 General
expenditure
.........................................................................
32
35-15 Meaning
of
upstream mining operations ......................................... 32
35-20 Meaning
of
mining operations ......................................................... 33
35-25
No double counting .......................................................................... 34
Subdivision 35-B--Excluded expenditure
34
35-35
Cost of acquiring rights and interests in projects ............................. 35
35-40 Royalties
..........................................................................................
35
35-45 Meanings
of
mining royalty and private mining royalty .................. 36
35-50 Financing
costs
................................................................................
37
35-55 Hire
purchase
agreements ................................................................ 38
35-60
Non-adjacent land and buildings used in administrative or
accounting activities ........................................................................ 39
35-65
Hedging or foreign exchange arrangements .................................... 39
35-70
Rehabilitation bond and trust payments ........................................... 39
35-75
Payments of income tax or GST ...................................................... 40
Division 40--Valuation point
41
Guide to Division 40
41
40-1 What
this
Division is about .............................................................. 41
Operative provisions
41
40-5 Meaning
of
valuation point .............................................................. 41
Part 2-4--Low profit offsets
43
Division 45--Low profit offsets
43
Guide to Division 45
43
45-1 What
this
Division is about .............................................................. 43
Operative provisions
43
45-5
Low profit offset--profits not greater than $50 million .................. 43
45-10
Low profit offset--profits greater than $50 million and less
than $100 million ............................................................................. 44
Minerals Resource Rent Tax Bill 2011 No. , 2011 iv
Part 2-5--Payment of MRRT
46
Division 50--How to work out when to pay MRRT
46
Guide to Division 50
46
50-1 What
this
Division is about .............................................................. 46
Operative provisions
46
50-5 When
assessed
MRRT is payable .................................................... 46
50-10 When
shortfall
interest charge is payable ........................................ 47
50-15
General interest charge payable on unpaid assessed MRRT
or shortfall interest charge ............................................................... 47
Chapter 3--MRRT allowances
49
Part 3-1--Royalty allowances
49
Division 60--Royalty allowances
49
Guide to Division 60
49
60-1 What
this
Division is about .............................................................. 49
Operative provisions
50
60-5
Objects of this Division ................................................................... 50
60-10
When a miner has a royalty allowance ............................................ 50
60-15
The amount of a royalty allowance .................................................. 50
60-20
When a royalty credit arises ............................................................. 51
60-25
Amount of a royalty credit ............................................................... 51
60-30 Royalty
credits
reduced by recoupments ......................................... 53
Part 3-2--Transferred royalty allowances
54
Division 65--Transferred royalty allowances
54
Guide to Division 65
54
65-1 What
this
Division is about .............................................................. 54
Operative provisions
54
65-5 Object
of
this Division ..................................................................... 54
65-10
When a miner has a transferred royalty allowance .......................... 55
65-15
The amount of a transferred royalty allowance ................................ 55
65-20
Available royalty credits .................................................................. 55
Part 3-3--Pre-mining loss allowances
57
Division 70--Pre-mining loss allowances
57
Guide to Division 70
57
70-1 What
this
Division is about .............................................................. 57
Subdivision 70-A--Object of this Division
57
v Minerals Resource Rent Tax Bill 2011 No. , 2011
70-5
Objects of this Division ................................................................... 57
Subdivision 70-B--When a miner has a pre-mining loss allowance
58
70-10
When a miner has a pre-mining loss allowance ............................... 58
70-15
The amount of a pre-mining loss allowance .................................... 59
70-20
Available pre-mining losses for a pre-mining loss allowance ......... 59
70-25 Meaning
of
pre-mining project interest etc. .................................... 60
Subdivision 70-C--Pre-mining losses
60
70-30 Pre-mining
losses
.............................................................................
61
70-35 Meaning
of
pre-mining expenditure etc. .......................................... 61
70-40 Meaning
of
pre-mining revenue ....................................................... 63
Subdivision 70-D--Amounts of pre-mining losses
64
70-45
Pre-mining losses for the MRRT years in which they arise ............. 64
70-50
Pre-mining losses for later MRRT years .......................................... 64
Part 3-4--Mining loss allowances
66
Division 75--Mining loss allowances
66
Guide to Division 75
66
75-1 What
this
Division is about .............................................................. 66
Operative provisions
66
75-5
Objects of this Division ................................................................... 66
75-10
When a miner has a mining loss allowance ..................................... 67
75-15
The amount of a mining loss allowance ........................................... 67
75-20 Mining
losses
...................................................................................
67
Part 3-5--Starting base allowances
69
Division 80--Starting base allowances
69
Guide to Division 80
69
80-1 What
this
Division is about .............................................................. 69
Subdivision 80-A--Objects of this Division
70
80-5
Objects of this Division ................................................................... 70
Subdivision 80-B--When a miner has a starting base allowance
70
80-10
When a miner has a starting base allowance .................................... 71
80-15
The amount of a starting base allowance ......................................... 71
80-20
When a miner has a starting base loss.............................................. 71
Subdivision 80-C--Starting base assets
72
80-25 Meaning
of
starting base asset ........................................................ 72
80-30
Treating starting base assets as a single starting base asset ............. 73
80-35 Mine
development
expenditure
may be a starting base asset ........... 74
Subdivision 80-D--Amounts of starting base losses
75
Minerals Resource Rent Tax Bill 2011 No. , 2011 vi
80-40
Starting base losses for the MRRT years in which they arise .......... 75
80-45
Starting base losses for later MRRT years ....................................... 77
80-50
Mining project interests originating from pre-mining project
interests with different valuation approaches ................................... 78
Division 85--Valuation approaches
80
Guide to Division 85
80
85-1 What
this
Division is about .............................................................. 80
Operative provisions
80
85-5
Choosing a valuation approach ........................................................ 80
85-10
Restriction on specifying the book value approach ......................... 81
85-15
The valuation approach for a mining project interest ...................... 82
Division 90--Declines in value of starting base assets
83
Guide to Division 90
83
90-1 What
this
Division is about .............................................................. 83
Subdivision 90-A--How to work out the decline in value of a
starting base asset
83
90-5
How to work out the decline in value of a starting base asset ......... 84
90-10
Write off rates under the book value approach ................................ 84
90-15
Write off rates under the market value approach ............................. 85
Subdivision 90-B--Base values under the book value approach
87
90-20
Application of this Subdivision ....................................................... 87
90-25
Initial base value .............................................................................. 87
90-30
Later base values .............................................................................. 90
Subdivision 90-C--Base values under the market value approach
90
90-35
Application of this Subdivision ....................................................... 91
90-40
Initial base value .............................................................................. 91
90-45
Mining project interest originating from pre-mining project
interests etc. ..................................................................................... 92
90-50
Later base values .............................................................................. 93
Subdivision 90-D--Miscellaneous
93
90-55 Meaning
of
interim expenditure ....................................................... 93
90-60
Partial disposal of a starting base asset before the start time ........... 95
90-65
Recoupment of the value of a starting base asset ............................. 96
Part 3-6--Transferred pre-mining loss allowances
99
Division 95--Transferred pre-mining loss allowances
99
Guide to Division 95
99
95-1 What
this
Division is about .............................................................. 99
vii Minerals Resource Rent Tax Bill 2011 No. , 2011
Operative provisions
99
95-5 Object
of
this Division ..................................................................... 99
95-10
When a miner has a transferred pre-mining loss allowance ........... 100
95-15
The amount of a transferred pre-mining loss allowance ................ 100
95-20
Available pre-mining losses for a transferred pre-mining loss
allowance ....................................................................................... 100
95-25 Cap
on
available
pre-mining losses ............................................... 102
95-30 The
pre-mining loss cap ................................................................ 103
Part 3-7--Transferred mining loss allowances
105
Division 100--Transferred mining loss allowances
105
Guide to Division 100
105
100-1 What
this
Division is about ............................................................ 105
Operative provisions
105
100-5 Object
of
this Division ................................................................... 105
100-10 When a miner has a transferred mining loss allowance ................. 106
100-15 The amount of a transferred mining loss allowance ...................... 106
100-20 Available
mining losses ................................................................. 106
100-25 Common
ownership test ................................................................ 107
Chapter 4--Specialist liability rules
108
Part 4-1--Mining project interests
108
Division 115--Combining mining project interests
108
Guide to Division 115
108
115-1 What
this
Division is about ............................................................ 108
Subdivision 115-A--Object of this Division
108
115-5 Object
of
this Division ................................................................... 108
Subdivision 115-B--When mining project interests are combined
109
115-10 Mining project interests may be treated as the same mining
project interest ............................................................................... 109
115-15 Choosing to override non-compliance ........................................... 110
115-20 Transferability
of
royalty credits ................................................... 111
115-25 Transferability
of
pre-mining losses .............................................. 111
115-30 Transferability
of
mining losses ..................................................... 111
115-35 Starting base losses and starting base assets .................................. 112
Subdivision 115-C--The effect of combining mining project
interests
112
115-40 The effect of combining mining project interests .......................... 112
115-45 Allowance components arising in preceding MRRT years ............ 113
Minerals Resource Rent Tax Bill 2011 No. , 2011 viii
115-50 Different valuation approaches for mining project interests .......... 114
115-55 Transferred
pre-mining
loss allowances ........................................ 115
115-60 Transferred mining loss allowances ............................................... 116
115-65 Choice of the alternative valuation method ................................... 117
Division 120--Transferring mining project interests
118
Guide to Division 120
118
120-1 What
this
Division is about ............................................................ 118
Operative provisions
118
120-5 Object
of
this Division ................................................................... 118
120-10 Effect of mining project transfer .................................................... 119
120-15 Effect of transferred property ......................................................... 122
120-20 Events happening after mining project transfer ............................. 123
120-25 Start of mining venture taken to be mining project transfer .......... 124
Division 125--Splitting mining project interests
125
Guide to Division 125
125
125-1 What
this
Division is about ............................................................ 125
Operative provisions
125
125-5 Object
of
this Division ................................................................... 125
125-10 Effect of mining project split ......................................................... 126
125-15 Meaning
of
split percentage .......................................................... 130
125-20 Effect of transferred property ......................................................... 130
125-25 Effect of MRRT liability from earlier years on rehabilitation
tax offset amounts .......................................................................... 131
125-30 Events
happening
after
mining project split .................................. 131
125-35 Start of mining venture taken to be mining project split ................ 132
Division 130--Winding down mining project interests
134
Guide to Division 130
134
130-1 What
this
Division is about ............................................................ 134
Operative provisions
134
130-5 Object
of
this Division ................................................................... 134
130-10 Suspension days for mining project interests ................................. 134
130-15 Extinguishing
allowance components ............................................ 135
130-20 Restarting
commercial production ................................................. 136
Division 135--Ending mining project interests
137
Guide to Division 135
137
135-1 What
this
Division is about ............................................................ 137
Operative provisions
137
135-5
The termination day for a mining project interest .......................... 137
ix Minerals Resource Rent Tax Bill 2011 No. , 2011
135-10 The effect of renewing or changing production rights ................... 137
135-15 The effect of renewing or changing mining ventures .................... 138
135-20 The effect of mining project transfers and mining project
splits ............................................................................................... 138
135-25 Continuation of obligations etc. after the termination day ............. 138
Part 4-2--Pre-mining project interests
140
Division 140--Pre-mining profits and royalty credits
140
Guide to Division 140
140
140-1 What
this
Division is about ............................................................ 140
Subdivision 140-A--Pre-mining profits
140
140-5 Pre-mining
profits
..........................................................................
140
140-10 Treatment of pre-mining profits--general rule .............................. 141
140-15 Effect on allowance components for other mining project
interests .......................................................................................... 142
140-20 Treatment of pre-mining profits--mining project interest
originating from the pre-mining project interest ............................ 143
Subdivision 140-B--Pre-mining royalty credits
143
140-25 Pre-mining
royalty credits ............................................................. 143
Division 145--Transferring pre-mining project interests
145
Guide to Division 145
145
145-1 What
this
Division is about ............................................................ 145
Operative provisions
145
145-5 Object
of
this Division ................................................................... 145
145-10 Continuation of pre-mining project interest ................................... 146
145-15 Effects
of
pre-mining
project transfer ............................................ 146
145-20 Effect of transferred property ......................................................... 148
145-25 Events happening after pre-mining project transfer ....................... 149
145-30 Pre-mining project transfer when mining project interest
originates ....................................................................................... 150
Division 150--Splitting pre-mining project interests
152
150-1 Guide
to
Division 150 .................................................................... 152
Operative provisions
152
150-5 Object
of
this Division ................................................................... 152
150-10 Continuation of pre-mining project interest ................................... 153
150-15 Effects
of
pre-mining project split ................................................. 153
150-20 Effect of transferred property ......................................................... 155
150-25 Effect of MRRT liability from earlier years on rehabilitation
tax offset amounts .......................................................................... 156
150-30 Events happening after pre-mining project split ............................ 157
Minerals Resource Rent Tax Bill 2011 No. , 2011 x
150-35 Pre-mining project split when mining project interest
originates ....................................................................................... 158
Division 155--Ending pre-mining project interests
160
Guide to Division 155
160
155-1 What
this
Division is about ............................................................ 160
Operative provisions
160
155-5
The termination day for a pre-mining project interest ................... 160
155-10 The effect of renewing or changing exploration rights .................. 160
155-15 The effect of pre-mining project transfers and pre-mining
project splits ................................................................................... 161
155-20 Continuation of obligations etc. after the termination day ............. 161
155-25 Extinguishing
allowance components ............................................ 162
Part 4-3--Adjusting MRRT liabilities
163
Division 160--Adjustments to revenue and expenditure of
project interests
163
Guide to Division 160
163
160-1 What
this
Division is about ............................................................ 163
Operative provisions
163
160-5 Object
of
this Division ................................................................... 163
160-10 Mining
adjustments........................................................................
164
160-15 Effect of mining adjustments on mining revenue, mining
expenditure etc. .............................................................................. 165
Division 165--Starting base adjustments
168
Guide to Division 165
168
165-1 What
this
Division is about ............................................................ 168
Subdivision 165-A--Starting base adjustment events and starting
base adjustment amounts
168
165-5
Starting base adjustment events ..................................................... 168
165-10 Starting base adjustment amounts .................................................. 169
165-15 Reductions in declines in value of starting base assets .................. 171
Subdivision 165-B--General rules for starting base adjustments
172
165-20 Starting base adjustments ............................................................... 172
165-25 The effect of starting base adjustments on starting base
losses .............................................................................................. 173
165-30 The effect of negative starting base adjustments on mining
revenue ........................................................................................... 174
Subdivision 165-C--Partial disposal of starting base assets
174
xi Minerals Resource Rent Tax Bill 2011 No. , 2011
165-35 Starting base adjustments for partial disposal of starting base
assets .............................................................................................. 174
165-40 Declines in value of retained parts of starting base assets ............. 175
165-45 Reductions
in
starting base losses .................................................. 177
165-50 Base value for the next MRRT year .............................................. 178
Subdivision 165-D--Miscellaneous
178
165-55 Use etc. of starting base assets for other mining project
interests etc. ................................................................................... 178
165-60 Effect on base value of use etc. of starting base assets after
starting base adjustment events ...................................................... 181
Part 4-4--Valuation
182
Division 170--Valuation principles
182
Guide to Division 170
182
170-1 What
this
Division is about ............................................................ 182
Operative provisions
182
170-5
Valuations to comply with valuation principles............................. 182
170-10 The
valuation
principles ................................................................. 183
Division 175--Alternative valuation method
185
Guide to Division 175
185
175-1 What
this
Division is about ............................................................ 185
Subdivision 175-A--Object of this Division
185
175-5 Object
of
this Division ................................................................... 186
Subdivision 175-B--Choosing to use the alternative valuation
method
186
175-10 Choosing to use the alternative valuation method ......................... 186
175-15 Group production of taxable resources .......................................... 187
Subdivision 175-C--Amounts included in mining revenue under
the alternative valuation method
188
175-20 When amounts are included in mining revenue under the
alternative valuation method .......................................................... 188
175-25 How to work out the single amount ............................................... 189
175-30 Unadjusted
revenue amounts ......................................................... 190
175-35 Downstream
operating costs .......................................................... 190
175-40 Depreciation
of assets .................................................................... 190
175-45 Return
on
capital costs ................................................................... 192
Division 180--Valuation of starting base assets using the
look-back approach
194
Guide to Division 180
194
Minerals Resource Rent Tax Bill 2011 No. , 2011 xii
180-1 What
this
Division is about ............................................................ 194
Operative provisions
194
180-5
Choosing to apply the look-back approach .................................... 194
180-10 The effect of the look-back approach on valuation of mining
project interests .............................................................................. 195
Part 4-5--Accounting for MRRT
197
Division 185--Currency translation
197
Guide to Division 185
197
185-1 What
this
Division is about ............................................................ 197
Operative provisions
197
185-5
Objects of this Division ................................................................. 197
185-10 Translation of amounts into Australian currency ........................... 198
185-15 Functional
currency rules ............................................................... 199
185-20 Functional currency rules--Australian permanent
establishments ................................................................................ 201
185-25 Special
translation rules ................................................................. 202
Division 190--Substituted accounting periods
207
Guide to Division 190
207
190-1 What
this
Division is about ............................................................ 207
Operative provisions
207
190-5 Object
of
this Division ................................................................... 207
190-10 Accounting
periods
recognised for income tax purposes ............... 207
190-15 Changes in accounting periods ...................................................... 208
190-20 The effect of transitional accounting periods on threshold
amounts .......................................................................................... 209
190-25 The effect of transitional accounting periods on uplift factors ...... 211
Division 195--Non-cash benefits
212
Guide to Division 195
212
195-1 What
this
Division is about ............................................................ 212
Operative provisions
212
195-5 Object
of
this Division ................................................................... 212
195-10 Barter
transactions
.........................................................................
213
195-15 Gift
transactions
.............................................................................
213
Division 200--Simplified MRRT method
215
Guide to Division 200
215
200-1 What
this
Division is about ............................................................ 215
Operative provisions
215
xiii Minerals Resource Rent Tax Bill 2011 No. , 2011
200-5
Effect of the simplified MRRT method ......................................... 215
200-10 Choosing to use the simplified MRRT method ............................. 216
200-15 Working out an entity's profit for simplified MRRT method
purposes ......................................................................................... 217
Part 4-6--Integrity measures
219
Division 205--Anti-profit shifting
219
Guide to Division 205
219
205-1 What
this
Division is about ............................................................ 219
Operative provisions
219
205-5
Object of Division .......................................................................... 219
205-10 Amounts to reflect independent dealings ....................................... 220
205-15 Method to be used when determining amounts for the
purposes of this Division ............................................................... 221
205-20 Commissioner
may
compensate
entity or another entity ............... 222
205-25 Commissioner
determinations ....................................................... 224
Division 210--Anti-avoidance
226
Guide to Division 210
226
210-1 What
this
Division is about ............................................................ 226
Subdivision 210-A--Application of this Division
226
210-5 Object
of
this Division ................................................................... 227
210-10 When does this Division apply? .................................................... 227
210-15 When does an entity get an MRRT benefit from a scheme? .......... 228
210-20 Matters to be considered in determining purpose .......................... 229
Subdivision 210-B--Commissioner may negate effects of schemes
for MRRT benefits
229
210-25 Commissioner may negate entity's MRRT benefits ...................... 230
210-30 Commissioner
may
compensate
entity or another entity ............... 230
210-35 One determination may cover several MRRT years etc. ............... 231
210-40 Commissioner must give copy of determination to entity
affected .......................................................................................... 232
Part 4-7--Entities
233
Division 215--Consolidated groups
233
Guide to Division 215
233
215-1 What
this
Division is about ............................................................ 233
Operative provisions
234
215-5
Objects of this Division ................................................................. 234
215-10 Choice
to
consolidate
for MRRT purposes .................................... 234
215-15 Single
entity
rule
............................................................................
235
Minerals Resource Rent Tax Bill 2011 No. , 2011 xiv
215-20 Project interests transferred to head company etc. on joining ........ 236
215-25 Project
interests
transferred
to leaving entity on leaving ............... 236
215-30 Mining project interests etc. split to leaving entity on leaving ...... 237
215-35 Acquisition
of
consolidated
group by another consolidated
group etc. ....................................................................................... 237
215-40 Instalment rates for leaving entity or new head company .............. 238
215-45 Effect of choice to continue group after shelf company
becomes new head company .......................................................... 238
215-50 Effect of change of head company or provisional head
company of a MEC group .............................................................. 239
215-55 Effect of group conversions involving MEC groups ..................... 240
Division 220--Partnerships and unincorporated associations and
bodies
242
Guide to Division 220
242
220-1 What
this
Division is about ............................................................ 242
Operative provisions
242
220-5 Partnerships....................................................................................
242
220-10 Unincorporated
associations and bodies ........................................ 243
Part 4-8--Miscellaneous
244
Division 225--Rehabilitation tax offsets
244
Guide to Division 225
244
225-1 What
this
Division is about ............................................................ 244
Operative provisions
244
225-5 Object
of
this Division ................................................................... 244
225-10 Entitlement to rehabilitation tax offsets ......................................... 244
225-15 Rehabilitation tax offset amounts relating to mining project
interests .......................................................................................... 246
225-20 Rehabilitation tax offset amounts relating to pre-mining
project interests .............................................................................. 247
225-25 Application of rehabilitation tax offsets ......................................... 248
Chapter 5--Miscellaneous
250
Division 235--Miscellaneous
250
235-1 Regulations
....................................................................................
250
Chapter 6--Interpreting this Act
251
Part 6-1--Rules for interpreting this Act
251
Division 245--Rules for interpreting this Act
251
245-1
What forms part of this Act ........................................................... 251
xv Minerals Resource Rent Tax Bill 2011 No. , 2011
245-5
What does not form part of this Act ............................................... 251
245-10 Guides and other non-operative provisions, and their role in
interpreting this Act ....................................................................... 251
Part 6-2--Meaning of some important concepts
253
Division 250--Meaning of hold
253
Guide to Division 250
253
250-1 What
this
Division is about ............................................................ 253
Operative provisions
253
250-5 Meaning
of
hold ............................................................................. 253
250-10 When certain starting base assets are held ..................................... 254
250-15 Things
that
are
jointly held ............................................................ 254
Division 255--Integrated mining project interests
255
Guide to Division 255
255
255-1 What
this
Division is about ............................................................ 255
Operative provisions
255
255-5
Upstream integration of mining project interests ........................... 255
255-10 Downstream integration of mining project interests ...................... 256
255-15 Meaning
of
downstream mining operations .................................. 256
255-20 Choice
to
integrate ......................................................................... 257
Part 6-3--Dictionary
258
Division 300--Dictionary
258
300-1 Dictionary
......................................................................................
258
Minerals Resource Rent Tax Bill 2011 No. , 2011 1
A Bill for an Act about a minerals resource rent
1
tax, and for related purposes
2
The Parliament of Australia enacts:
3
Chapter 1--Introduction
4
Part 1-1--Preliminary
5
Division 1--Preliminary
6
1-1 Short title
7
This Act may be cited as the Minerals Resource Rent Tax Act
8
2011.
9
Chapter 1 Introduction
Part 1-1 Preliminary
Division 1 Preliminary
Section 1-5
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
2 Minerals Resource Rent Tax Bill 2011 No. , 2011
1-5 Commencement
1
This Act commences on 1 July 2012.
2
1-10 Object of this Act
3
The object of this Act is to ensure that the Australian community
4
receives an adequate return for its
*
taxable resources, having
5
regard to:
6
(a) the inherent value of the resources; and
7
(b) the non-renewable nature of the resources; and
8
(c) the extent to which the resources are subject to
9
Commonwealth, State and Territory royalties.
10
This Act does this by taxing above normal profits made by miners
11
(also known as economic rents) that are reasonably attributable to
12
the resources in the form and place they were in when extracted.
13
1-15 Administration of this Act
14
The Commissioner has the general administration of this Act.
15
Note:
An effect of this provision is that people who acquire information
16
under this Act are subject to the confidentiality obligations in
17
Division 355 in Schedule 1 to the Taxation Administration Act 1953.
18
1-20 Extension to external Territories
19
The
*
MRRT law extends to every external Territory other than the
20
Australian Antarctic Territory.
21
1-25 Extraterritorial application
22
The
*
MRRT law extends to acts, omissions, matters and things
23
outside
*
Australia (except where a contrary intention appears).
24
25
Introduction Chapter 1
A guide to this Act Part 1-2
Overview of this Act Division 2
Section 2-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 3
Part 1-2--A guide to this Act
1
Division 2--Overview of this Act
2
2-1 What this Act is about
3
This Act works out a miner's MRRT liability on mining profits
4
made from extracting taxable resources (mainly coal and iron ore)
5
for a mining project interest for a year.
6
A mining project interest is principally a share of the output of an
7
undertaking to extract taxable resources. Mining profit consists of
8
mining revenue less mining expenditure. The sum of the miner's
9
mining profits for its interests are taxed at the MRRT rate.
10
Mining revenue is mainly that part of the revenue the miner makes
11
from supplying, exporting or using extracted taxable resources (or
12
things produced from them) that reasonably relates to the form and
13
place the resources were in at their valuation point (usually when
14
leaving the run-of-mine stockpile).
15
Mining expenditure is mainly the costs of finding and extracting
16
the taxable resources and getting them to their valuation point.
17
Mining profit may be reduced by allowances for past losses, for the
18
miner's existing investments at 2 May 2010 (called a starting base
19
allowance), and for the miner's Commonwealth, State and
20
Territory mining royalty amounts. Some allowances can be
21
transferred to other mining project interests to reduce their mining
22
profits.
23
If the total mining profits of the miner and certain connected
24
entities is $50 million or less, a low-profit offset will ensure that
25
the miner has no liability for MRRT. The offset is phased-out for
26
profits between $50 million and $100 million.
27
Chapter 1 Introduction
Part 1-2 A guide to this Act
Division 2 Overview of this Act
Section 2-5
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
4 Minerals Resource Rent Tax Bill 2011 No. , 2011
2-5 How this Act is arranged
1
(1) This Act is arranged in a way that reflects the principle of moving
2
from the general case to the particular.
3
(2) In this respect, the conceptual structure of the Act is something like
4
a pyramid. The pyramid shape illustrates the way the MRRT law is
5
organised, moving down from the central or core provisions at the
6
top of the pyramid, to general rules of wide application and then to
7
the more specialised topics.
8
9
10
Note:
Provisions relating to the administration of the MRRT and to
11
collection and recovery of amounts of MRRT or instalments of MRRT
12
are contained in Schedule 1 to the Taxation Administration Act 1953.
13
14
Simplified
MRRT method
Consolidated
groups
Alternative
valuation method
Core
rules
Specialist liability rules
(examples)
Other general
liability rules
M
R
R
T
al
lo
w
an
ce
s
N
on
-c
as
h
be
ne
fi
ts
Introduction Chapter 1
A guide to this Act Part 1-2
Defined terms Division 3
Section 3-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 5
Division 3--Defined terms
1
3-1 When defined terms are identified
2
(1) Many of the terms used in the MRRT law are defined.
3
(2) Most defined terms in this Act are identified by an asterisk
4
appearing at the start of the term: as in "
*
MRRT year".
5
3-5 When terms are not identified
6
(1) Once a defined term has been identified by an asterisk, later
7
occurrences of the term in the same subsection are not usually
8
asterisked.
9
(2) Terms are not asterisked in the non-operative material contained in
10
this Act.
11
Note:
The non-operative material is described in Division 4.
12
(3) The following basic terms used throughout the Act are not
13
identified with an asterisk:
14
15
Common definitions that are not asterisked
Item Term
1 Commissioner
2 extract
3 miner
4
mining project interest
5 MRRT
16
3-10 Identifying the defined term in a definition
17
Within a definition, the defined term is identified by bold italics.
18
19
Chapter 1 Introduction
Part 1-2 A guide to this Act
Division 4 Status of guides and other non-operative material
Section 4-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
6 Minerals Resource Rent Tax Bill 2011 No. , 2011
Division 4--Status of guides and other non-operative
1
material
2
4-1 Non-operative material
3
(1) In addition to the operative provisions themselves, this Act
4
contains other material to help readers identify accurately and
5
quickly the provisions that are relevant to them and to help them
6
understand those provisions.
7
(2) This other material falls into 2 main categories, see sections 4-5
8
and 4-10.
9
4-5 Guides
10
(1) One category is the guide in many Divisions. Under the heading
11
"What this Division is about', a short explanation of the Division
12
appears in boxed text.
13
(2) Guides form part of this Act but are not operative provisions. In
14
interpreting an operative provision, guides may only be considered
15
for limited purposes. These are set out in subsection 245-10(2).
16
4-10 Other material
17
The other category consists of material such as notes and
18
examples. These also form part of the Act. They are usually
19
distinguished by font size from the operative provisions, but are
20
not kept separate from them.
21
22
General liability rules Chapter 2
Core rules Part 2-1
Core rules Division 10
Section 10-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 7
Chapter 2--General liability rules
1
Part 2-1--Core rules
2
Division 10--Core rules
3
Table of sections
4
10-1
A miner's liability for MRRT
5
10-5
The MRRT liability for a mining project interest
6
10-10 MRRT
allowances
7
10-15
The effect of low profits on a miner's liability for MRRT
8
10-20
Payment of MRRT
9
10-25 MRRT
years
10
10-1 A miner's liability for MRRT
11
A miner is liable to pay MRRT, for an
*
MRRT year, equal to the
12
sum of its
*
MRRT liabilities for each of its mining project interests
13
for that year.
14
Note: For
mining project interests, see Part 2-2.
15
10-5 The MRRT liability for a mining project interest
16
Work out the miner's MRRT liability for a mining project interest
17
for an
*
MRRT year as follows:
18
MRRT liability
MRRT rate
Mining profit
MRRT allowances
=
×
-
19
Method statement
20
Step 1. Work out the miner's
*
mining profit for the mining
21
project interest for the
*
MRRT year.
22
Note:
For
the
mining profit, see Part 2-3.
23
Step 2. Work out the miner's
*
MRRT allowances for the mining
24
project interest for the
*
MRRT year.
25
Chapter 2 General liability rules
Part 2-1 Core rules
Division 10 Core rules
Section 10-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
8 Minerals Resource Rent Tax Bill 2011 No. , 2011
Note:
For
MRRT allowances, see section 10-10.
1
Step 3. Subtract the
*
MRRT allowances from the
*
mining profit.
2
Step 4. Multiply the result by the
*
MRRT rate. This is the
3
miner's MRRT liability for the mining project interest for
4
the
*
MRRT year.
5
Note
1:
For
the
MRRT rate, see section 300-1.
6
Note 2:
If the result from step 3 is zero, the miner's MRRT
7
liability will also be zero.
8
10-10 MRRT allowances
9
The
MRRT allowances, and the order in which they are applied in
10
working out
*
MRRT liabilities, are as follows:
11
12
MRRT allowances
Item
Order of applying the MRRT allowances
See:
1
*
Royalty allowance
Part 3-1
2
*
Transferred royalty allowance
Part 3-2
3
*
Pre-mining loss allowance
Part 3-3
4
*
Mining loss allowance
Part 3-4
5
*
Starting base allowance
Part 3-5
6
*
Transferred pre-mining loss allowance
Part 3-6
7
*
Transferred mining loss allowance
Part 3-7
13
Note:
MRRT allowances are made up of allowance components, up to the
14
amount of the relevant mining profit.
15
10-15 The effect of low profits on a miner's liability for MRRT
16
If the miner has an offset under section 45-5 or 45-10 for the
17
*
MRRT year, the amount of MRRT that the miner must pay for the
18
MRRT year is reduced by the amount of the offset.
19
General liability rules Chapter 2
Core rules Part 2-1
Core rules Division 10
Section 10-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 9
Note 1:
For low profit offsets, see Part 2-4.
1
Note 2:
A miner is not liable to pay MRRT for the MRRT year if the miner
2
has chosen to use the simplified MRRT method under Division 200.
3
10-20 Payment of MRRT
4
The miner must pay to the Commonwealth its
*
assessed MRRT for
5
the
*
MRRT year on or before the day on which the assessed
6
MRRT becomes due and payable.
7
Note 1:
For payment of MRRT, see Part 2-5.
8
Note 2:
Division 115 in Schedule 1 to the Taxation Administration Act 1953
9
provides for payment of MRRT by instalments.
10
Note 3:
Rehabilitation tax offsets reduce the amount of MRRT that the miner
11
must pay: see section 225-25.
12
10-25 MRRT years
13
An
MRRT year is a
*
financial year starting on or after 1 July 2012.
14
Note:
Other accounting periods may be MRRT years if a miner uses, for
15
income tax purposes, an accounting period other than a financial year:
16
see Division 190 (Substituted accounting periods).
17
18
Chapter 2 General liability rules
Part 2-2 Mining project interests
Division 15 Mining project interests
Section 15-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
10 Minerals Resource Rent Tax Bill 2011 No. , 2011
Part 2-2--Mining project interests
1
Division 15--Mining project interests
2
Guide to Division 15
3
15-1 What this Division is about
4
The concept of a mining project interest is central to the MRRT. A
5
miner's liability is based on its MRRT liabilities for each of its
6
mining project interests.
7
Note:
Chapter 4 contains special rules about mining project interests,
8
including combining, transferring and splitting of mining project
9
interests, and their suspension and termination.
10
Table of sections
11
Operative provisions
12
15-5
When an entity has a mining project interest
13
15-10
Iron ore mining project interests to be kept separate
14
15-15 Meaning
of
production right
15
15-20 Meaning
of
project area
16
Operative provisions
17
15-5 When an entity has a mining project interest
18
Mining project interest arising from a mining venture
19
(1)
An
*
entity has a mining project interest to the extent that the entity
20
is entitled to share in the output of a
*
mining venture in which the
21
entity participates (whether actively or otherwise, and whether
22
alone or with one or more other entities).
23
Note 1:
There may be more than one mining venture to extract taxable
24
resources from an area covered by a production right.
25
Note 2:
Changing or renewing a mining venture does not cause the
26
termination day of a mining project interest: see section 135-15.
27
General liability rules Chapter 2
Mining project interests Part 2-2
Mining project interests Division 15
Section 15-5
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 11
(2)
If
the
*
mining venture relates to one or more
*
production rights, the
1
*
entity has a separate mining project interest in relation to each
2
production right.
3
Example: Scouting Resources participates in a mining venture relating to the
4
extraction of taxable resources from an area covered by 3 production
5
rights. Scouting Resources has 3 mining project interests, one in
6
relation to each production right.
7
Meaning of mining venture
8
(3) An undertaking is a mining venture if the purpose, or a purpose, of
9
the undertaking is:
10
(a) to extract some or all of the
*
taxable resources from the area
11
covered by one or more
*
production rights; and
12
(b) to produce an output that is a taxable resource extracted
13
under the authority of the production right or rights, or
14
something produced using such a taxable resource.
15
Example: CheckCo and BelCo enter into a contractual arrangement under which
16
they agree to jointly extract and process iron ore from the whole area
17
covered by a mining lease, and each take an equal share of the ore
18
once it has been pelletised.
19
Participation in this undertaking gives rise to a mining project interest
20
for each of CheckCo and BelCo, comprising their respective
21
entitlements to share in the pellets produced from the mining venture.
22
Residual mining project interest
23
(4)
An
*
entity has a mining project interest to the extent that:
24
(a) the entity is entitled to extract
*
taxable resources from the
25
area covered by a
*
production right; and
26
(b) there is no
*
mining venture, relating to the extraction of those
27
taxable resources, that gives rise to a mining project interest
28
for one or more entities under subsection (1).
29
Note 1:
The start of a mining venture relating to the extraction of those taxable
30
resources is treated as a mining project transfer (if the venture relates
31
to all of the resources), or otherwise, a mining project split: see
32
section 120-25 (for transfers) or 125-35 (for splits).
33
Note 2:
Changing or renewing a production right does not cause the
34
termination day of a mining project interest: see section 135-10.
35
Chapter 2 General liability rules
Part 2-2 Mining project interests
Division 15 Mining project interests
Section 15-5
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
12 Minerals Resource Rent Tax Bill 2011 No. , 2011
Example: LesseeCo holds a mining lease, with a term of 21 years, to extract coal
1
from an area. LesseeCo enters into a sublease with DiggerCo, giving
2
DiggerCo the exclusive right to extract coal from the whole area for a
3
period of 3 years.
4
LesseeCo has a mining project interest under this subsection
5
comprising its entitlement to extract coal from the area after the
6
expiration of the 3 year sublease.
7
If there is no mining venture relating to the coal that may be extracted
8
under the sublease, DiggerCo has a mining project interest under this
9
subsection comprising its entitlement to extract the coal under the
10
sublease.
11
Further entitlements constitute new mining project interest
12
(5) If, after the
*
entity becomes entitled as mentioned in subsection (1)
13
or (4), the entity becomes so entitled to a further extent, the entity
14
is taken to have a separate mining project interest corresponding to
15
that further extent.
16
Note:
The separate mining project interests are combined into a single
17
mining project interest under Division 115 if the requirements of that
18
Division are met.
19
Example: CheckCo and BelCo each have a mining project interest comprising
20
an entitlement to share in the output of a mining venture in which they
21
both participate.
22
CheckCo transfers its interest in the mining venture to BelCo
23
(Division 120, about transferring mining project interests, applies).
24
BelCo then has a mining project interest comprising the entitlement it
25
acquired from CheckCo to share in the output of the venture. That
26
mining project interest is separate from CheckCo's original mining
27
project interest.
28
Royalties not to give rise to mining project interest
29
(6) To avoid doubt, a
*
mining royalty or a
*
private mining royalty is
30
not an output mentioned in subsection (1), unless it is a private
31
mining royalty that is payable in kind.
32
Example: CheckCo and BelCo each participate in a mining venture that
33
produces pelletised iron ore from the area covered by a production
34
right. Under the contractual arrangement between the parties,
35
CheckCo is entitled to take all the pelletised iron ore, and is required
36
to pay BelCo an amount of money calculated by reference to the
37
quantity of iron ore extracted under the mining venture.
38
General liability rules Chapter 2
Mining project interests Part 2-2
Mining project interests Division 15
Section 15-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 13
CheckCo has a mining project interest under subsection (1), BelCo
1
does not.
2
However, if CheckCo was required to pay BelCo in pelletised iron
3
ore, BelCo would also have a mining project interest under
4
subsection (1).
5
15-10 Iron ore mining project interests to be kept separate
6
If, apart from this section, a mining project interest would relate to
7
both iron ore and
*
taxable resources other than iron ore, treat the
8
interest as:
9
(a) a mining project interest relating to iron ore; and
10
(b) another mining project interest relating to taxable resources
11
other than iron ore.
12
15-15 Meaning of production right
13
(1)
A
production right is:
14
(a) an authority or right (however described) under an
15
*
Australian law to extract a
*
taxable resource from a
16
particular area in
*
Australia; or
17
(b) if an authority or right (however described) under an
18
Australian law is not required to extract a taxable resource
19
from a particular area--an interest in an area in
*
Australia
20
that allows a person to extract a taxable resource from the
21
area.
22
Examples: The following are some examples of production rights:
23
(a) a mining lease;
24
(b) a mining lease subject to environmental approval;
25
(c) a mining licence.
26
(2)
However,
an
*
exploration right is not a production right.
27
Note:
An exploration right may give rise to a pre-mining project interest: see
28
section 70-25.
29
Chapter 2 General liability rules
Part 2-2 Mining project interests
Division 15 Mining project interests
Section 15-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
14 Minerals Resource Rent Tax Bill 2011 No. , 2011
15-20 Meaning of project area
1
The
project area for a mining project interest is so much of the
2
area covered by a
*
production right as is:
3
(a) for a mining project interest arising under subsection
4
15-5(1)--the area to which the
*
mining venture mentioned in
5
that subsection relates; or
6
(b) for a mining project interest arising under subsection
7
15-5(4)--the area to which the entitlement giving rise to the
8
mining project interest relates.
9
Note:
The project area for a mining project interest may also be, or be part
10
of, the project area for another mining project interest.
11
12
General liability rules Chapter 2
Mining project interests Part 2-2
Taxable resources Division 20
Section 20-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 15
Division 20--Taxable resources
1
Guide to Division 20
2
20-1 What this Division is about
3
The concept of a taxable resource is central to whether an entity
4
has a mining project interest, and to the other concepts (such as
5
mining profits) that govern an entity's MRRT liabilities.
6
Table of sections
7
Operative provisions
8
20-5 What
are
taxable resources
9
Operative provisions
10
20-5 What are taxable resources
11
(1)
A
taxable resource is a quantity of any of the following:
12
(a)
iron
ore;
13
(b)
coal;
14
(c) anything produced from a process that results in iron ore or
15
coal being consumed or destroyed without extraction;
16
(d) coal seam gas extracted as a necessary incident of mining
17
coal.
18
Example: Gas extracted on an ongoing basis from a coal mine, or a proposed
19
coal mine (if it is not extracted as part of a separate commercial
20
operation) in order to comply with engineering requirements, mine
21
safety laws or environmental conditions would be a taxable resource
22
because its extraction is a necessary incident of mining the coal.
23
Gas extracted before coal mining begins as part of an independent
24
commercial operation would not be a taxable resource because its
25
extraction would not be a necessary incident of coal mining. Instead,
26
that gas would be subject to taxation under the Petroleum Resource
27
Rent Tax Assessment Act 1987.
28
(2) In deciding whether something is a taxable resource, disregard:
29
Chapter 2 General liability rules
Part 2-2 Mining project interests
Division 20 Taxable resources
Section 20-5
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
16 Minerals Resource Rent Tax Bill 2011 No. , 2011
(a) the use to which it is or will be put; and
1
(b) what is or will be produced from it after extraction.
2
(3) A quantity of a thing may be a taxable resource even if its extent is
3
not known (for example, before it is extracted).
4
5
General liability rules Chapter 2
Mining profits Part 2-3
Mining profits Division 25
Section 25-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 17
Part 2-3--Mining profits
1
Division 25--Mining profits
2
Guide to Division 25
3
25-1 What this Division is about
4
A miner's mining profit is a component of its MRRT liability for a
5
mining project interest for an MRRT year. It is the excess of
6
mining revenue over mining expenditure for the interest for the
7
year.
8
Table of sections
9
Operative provisions
10
25-5
How to work out the mining profit for a mining project interest
11
Operative provisions
12
25-5 How to work out the mining profit for a mining project interest
13
Work out a miner's mining profit for a mining project interest for
14
an
*
MRRT year as follows:
15
Mining profit
Mining revenue
Mining expenditure
=
-
16
Method statement
17
Step 1. Work out the miner's
*
mining revenue for the mining
18
project interest for the
*
MRRT year.
19
Note:
For
the
mining revenue, see Division 30.
20
Step 2. Work out the miner's
*
mining expenditure for the mining
21
project interest for the
*
MRRT year.
22
Note:
For
the
mining expenditure, see Division 35.
23
Chapter 2 General liability rules
Part 2-3 Mining profits
Division 25 Mining profits
Section 25-5
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
18 Minerals Resource Rent Tax Bill 2011 No. , 2011
Step 3. If the
*
mining revenue exceeds the
*
mining expenditure,
1
the difference is the miner's mining profit for the mining
2
project interest for the
*
MRRT year.
3
Step 4. If the
*
mining revenue does not exceed the
*
mining
4
expenditure, the miner's mining profit for the mining
5
project interest for the
*
MRRT year is zero.
6
Note:
Mining
expenditure
that exceeds mining revenue is a
7
mining loss that may be applied in working out a mining
8
loss allowance (see Part 3-4) or a transferred mining loss
9
allowance (see Part 3-7).
10
11
General liability rules Chapter 2
Mining profits Part 2-3
Mining revenue Division 30
Section 30-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 19
Division 30--Mining revenue
1
Table of Subdivisions
2
Guide to Division 30
3
30-A
A miner's mining revenue
4
30-B
Revenue from supply, export or use of taxable resources
5
30-C Other
revenue
6
30-D Miscellaneous
7
Guide to Division 30
8
30-1 What this Division is about
9
A miner's mining revenue for a mining project interest may consist
10
of revenue from:
11
(a)
taxable resources extracted from the project area
12
for the mining project interest, to the extent that the
13
revenue is reasonably attributable to the taxable
14
resources in the form and place they were in when
15
they were at their valuation point; and
16
(b)
recoupment of mining expenditure relating to the
17
mining project interest; and
18
(c)
compensation for loss of taxable resources for the
19
mining project interest; and
20
(d)
amounts for supply of taxable resources if the
21
amounts are not attributable to particular taxable
22
resources.
23
Subdivision 30-A--A miner's mining revenue
24
Table of sections
25
Chapter 2 General liability rules
Part 2-3 Mining profits
Division 30 Mining revenue
Section 30-5
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
20 Minerals Resource Rent Tax Bill 2011 No. , 2011
30-5 A
miner's
mining revenue
1
30-5 A miner's mining revenue
2
A
miner's
mining revenue for a mining project interest that the
3
miner has, for an
*
MRRT year, is the sum of all the amounts that,
4
under this Act, are included in the miner's mining revenue for that
5
interest for that year.
6
Note:
Most of the amounts are covered by this Division. However, the
7
following amounts may also be included in a miner's mining revenue:
8
(a) amounts that are in effect recoupment of the value of starting
9
base assets (see section 90-65);
10
(b) amounts arising as a result of adjustments to take account of
11
changes in circumstances (see Division 160);
12
(c) amounts arising as a result of balancing adjustment events for
13
starting base assets (see Division 165).
14
Subdivision 30-B--Revenue from supply, export or use of
15
taxable resources
16
Table of sections
17
30-10
When amounts from taxable resources etc. are included in mining revenue
18
30-15
Meaning of mining revenue event
19
30-20 Meaning
of
initial supply
20
30-25
Working out amounts to be included
21
30-30 Meaning
of
arm's length consideration
22
30-35
When supplies are made
23
30-10 When amounts from taxable resources etc. are included in
24
mining revenue
25
An amount is included in a miner's mining revenue for a mining
26
project interest for an
*
MRRT year if:
27
(a)
a
*
taxable resource has been extracted from the
*
project area
28
for the mining project interest; and
29
(b) during the year, a
*
mining revenue event happens in relation
30
to the taxable resource.
31
General liability rules Chapter 2
Mining profits Part 2-3
Mining revenue Division 30
Section 30-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 21
30-15 Meaning of mining revenue event
1
(1)
A
mining revenue event happens in relation to a
*
taxable resource
2
extracted from the
*
project area for a mining project interest if the
3
miner who has the interest:
4
(a)
makes
an
*
initial supply of the taxable resource, but not after
5
its exportation from
*
Australia; or
6
(b) exports the taxable resource from Australia, but not after
7
paragraph (a) has applied to the taxable resource; or
8
(c) makes an initial supply of or uses, or exports from Australia,
9
something produced using the taxable resource, but not after
10
paragraph (a) or (b), or this paragraph, has already applied in
11
relation to the taxable resource.
12
Note:
There is a mining revenue event (but only one) in relation to each
13
quantity of taxable resource.
14
(2)
However,
a
mining revenue event does not happen for use of a
15
thing produced using a
*
taxable resource, to the extent that:
16
(a) the use takes place in the course of operations or activities of
17
a kind mentioned in paragraph 35-20(1)(a) for the mining
18
project interest; and
19
(b) those operations or activities do not involve doing anything
20
to, or with, other taxable resources extracted from the
21
*
project area for the interest after those other taxable
22
resources reach the form and location they are in when a
23
mining revenue event happens in relation to them; and
24
(c) the use does not give rise to:
25
(i) an amount of
*
mining expenditure for the miner; or
26
(ii) an amount that is taken into account for the miner under
27
step 2 of the method statement in section 30-25; or
28
(iii) an amount that is taken into account for the miner under
29
step 3 of the method statement in section 175-25
30
(alternative valuation method).
31
Chapter 2 General liability rules
Part 2-3 Mining profits
Division 30 Mining revenue
Section 30-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
22 Minerals Resource Rent Tax Bill 2011 No. , 2011
30-20 Meaning of initial supply
1
(1)
An
initial supply of a
*
taxable resource, or something produced
2
using a taxable resource, is the first
*
supply of the taxable resource
3
or thing a miner makes, disregarding a supply covered by
4
subsection (2).
5
(2)
However,
a
*
supply of a
*
taxable resource, or something produced
6
using such a taxable resource, is not an initial supply if:
7
(a) the supply is made between
*
entities in the course of a
8
*
mining venture in relation to which each of the entities has a
9
mining project interest; or
10
(b) the supply does not result in a change in the ownership of the
11
taxable resource or the thing produced using such a taxable
12
resource.
13
30-25 Working out amounts to be included
14
(1) Work out the amount to be included under section 30-10, in
15
relation to a
*
mining revenue event that happens in relation to a
16
*
taxable resource, as follows:
17
Method statement
18
Step 1. Work out under subsection (2) the revenue amount for
19
the
*
mining revenue event.
20
Step 2. Using the method that satisfies subsection (3), work out
21
how much of that revenue amount is reasonably
22
attributable to the
*
taxable resource:
23
(a)
in the form in which it existed when it was at its
24
*
valuation point; and
25
(b)
at the place where it was located when it was at its
26
valuation point.
27
General liability rules Chapter 2
Mining profits Part 2-3
Mining revenue Division 30
Section 30-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 23
The amount worked out under this step is the amount to
1
be included under section 30-10.
2
Revenue amount
3
(2) The revenue amount mentioned in step 1 of the method statement
4
in subsection (1) is:
5
6
Working out the revenue amount
Item Column
1
If the amount to be included
relates to ...
Column 2
Then the revenue amount is ...
1
A
*
supply of the
*
taxable resource,
or a thing produced using the taxable
resource
The consideration received or
receivable for the supply
2
An exportation from
*
Australia of
the
*
taxable resource, or a thing
produced using the taxable resource
What would be the
*
arm's length
consideration for a
*
supply of the
taxable resource or thing at the time
and place the taxable resource or
thing is loaded for export
3
Use of a thing produced from the
*
taxable resource
What would be the
*
arm's length
consideration for a
*
supply of the
thing at the time and place of the
use.
7
Note:
Supplies covered by item 1 of the table that are not at arm's length
8
may, in appropriate cases, attract the operation of Division 205
9
(anti-profit shifting).
10
(3) The method to use in step 2 of the method statement in
11
subsection (1) is the one that produces the most appropriate and
12
reliable measure of how much of the revenue amount is reasonably
13
attributable as mentioned in that step, having regard to:
14
(a) the miner's circumstances, including, but not limited to, the
15
functions performed, assets used, and risks borne by the
16
miner in carrying on its
*
mining operations,
*
transformative
17
Chapter 2 General liability rules
Part 2-3 Mining profits
Division 30 Mining revenue
Section 30-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
24 Minerals Resource Rent Tax Bill 2011 No. , 2011
operations and
*
resource marketing operations for the mining
1
project interest; and
2
(b) the available information.
3
(4) In using the method that satisfies subsection (3), make the
4
following assumptions, to the extent that they are relevant to that
5
method:
6
(a) that a distinct and separate
*
entity (the notional downstream
7
entity) does all the things (including using all the assets) that
8
the miner actually does in carrying on the
*
downstream
9
mining operations,
*
transformative operations and
*
resource
10
marketing operations for the mining project interest;
11
(b) that the notional downstream entity does not acquire an
12
interest in the
*
taxable resource;
13
(c) that the miner and the notional downstream entity deal
14
wholly independently with one another;
15
(d)
that:
16
(i) there is a market for what the notional downstream
17
entity is assumed by paragraph (a) to do; and
18
(ii) that market is competitive in the sense that the returns to
19
the notional downstream entity would be no more or
20
less than are necessary for it to commit capital, and in
21
particular are commensurate with the non-diversifiable
22
risks inherent in the things it does.
23
(5) Without limiting subsection (3), a miner is taken for the purposes
24
of step 2 in the method statement in subsection (1) to use the
25
method that satisfies subsection (3) if the miner works out how
26
much of the revenue amount is reasonably attributable as
27
mentioned in that step by:
28
(a) reducing the revenue amount by an amount that, having
29
regard to the matters mentioned in paragraphs (3)(a) and (b),
30
is sufficient for a notional downstream entity to recover the
31
following costs relating to what it is assumed by
32
subsection (4) to do:
33
(i) any operating costs;
34
General liability rules Chapter 2
Mining profits Part 2-3
Mining revenue Division 30
Section 30-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 25
(ii) any depreciation of the assets that the notional
1
downstream entity is taken to have used;
2
(iii) a cost of capital sufficient to justify the continued
3
commitment of the capital; and
4
(b) adding back to the revenue amount so much (if any) of the
5
costs mentioned in paragraph (a) of this subsection as relate
6
to things done to the extent that they were not taken into
7
account in the revenue amount.
8
However, the costs mentioned in paragraph (a) of this subsection
9
only include costs to the extent that they reasonably relate to the
10
*
taxable resource in relation to which the
*
mining revenue event
11
happens.
12
Meaning of transformative operations
13
(6) Operations or activities are transformative operations, for a
14
mining project interest, to the extent that the operations or
15
activities:
16
(a) are operations or activities of a kind mentioned in paragraph
17
35-20(1)(a) for the mining project interest; and
18
(b) involve doing something to, or with, the
*
taxable resources
19
after they reach the form and location they are in when they
20
are first applied to producing something in relation to which
21
a
*
mining revenue event of a kind mentioned in paragraph
22
30-15(1)(c) happens; and
23
(c) do not involve doing anything to, or with, those taxable
24
resources after they reach the form and location they are in
25
when that mining revenue event happens.
26
Meaning of resource marketing operations
27
(7) Operations or activities are resource marketing operations, for a
28
mining project interest, to the extent that the operations or
29
activities involve marketing, selling, shipping or delivering of
30
*
taxable resources in relation to which a
*
mining revenue event
31
happens.
32
Chapter 2 General liability rules
Part 2-3 Mining profits
Division 30 Mining revenue
Section 30-30
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
26 Minerals Resource Rent Tax Bill 2011 No. , 2011
30-30 Meaning of arm's length consideration
1
(1)
The
arm's length consideration for a
*
supply is the amount that
2
would reasonably be expected to be received or receivable by the
3
miner as consideration for the supply if:
4
(a) the miner made the supply under an agreement between the
5
miner and another
*
entity; and
6
(b) they were dealing wholly independently with one another in
7
relation to the supply.
8
(2) The method used to determine that amount is to be the method that
9
produces the most appropriate and reliable measure of that amount
10
having regard to:
11
(a) the miner's circumstances, including, but not limited to, the
12
functions performed, assets used, and risks borne by the
13
miner in carrying on its
*
mining operations,
*
transformative
14
operations and
*
resource marketing operations for the mining
15
project interest; and
16
(b) the available information.
17
(3) However, if it is not possible to work out the arm's length
18
consideration in accordance with subsections (1) and (2), the arm's
19
length consideration for a
*
supply is the amount that is, in the
20
Commissioner's opinion, fair and reasonable.
21
30-35 When supplies are made
22
Treat the time when a miner makes a
*
supply for the purposes of
23
this Act as the earliest of the following:
24
(a) when consideration for the supply is received or becomes
25
receivable;
26
(b) when what is being supplied is delivered;
27
(c) when ownership of what is being supplied passes.
28
Subdivision 30-C--Other revenue
29
Table of sections
30
General liability rules Chapter 2
Mining profits Part 2-3
Mining revenue Division 30
Section 30-40
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 27
30-40
Recoupment or offsetting of mining expenditure
1
30-45
Recoupment of payments that give rise to royalty credits
2
30-50 Compensation
for
loss of taxable resources
3
30-55
Amounts that do not relate to a particular mining revenue event
4
30-40 Recoupment or offsetting of mining expenditure
5
(1) An amount is included in a miner's
*
mining revenue for a mining
6
project interest for an
*
MRRT year to the extent that:
7
(a) during the year, the amount is received, or becomes
8
receivable, by any of the following
*
entities:
9
(i)
the
miner;
10
(ii)
an
entity
*
connected with the miner;
11
(iii)
an
*
affiliate of the miner;
12
(iv) an entity of which the miner is an affiliate;
13
(v) an affiliate of an entity covered by subparagraph (ii);
14
(vi) an entity connected with an entity covered by
15
subparagraph (ii), (iii) or (iv); and
16
(b) payment of the amount has, or would have, the purpose or
17
effect of
*
recouping or offsetting some or all of an amount of
18
expenditure (including future expenditure); and
19
(c) the amount does not give rise to an adjustment under
20
Division 160 (adjustments for changes in circumstances).
21
Example: In the 2012-13 MRRT year, a miner receives a subsidy for employing
22
apprentices. In the 2013-14 MRRT year, the miner incurs mining
23
expenditure for the relevant mining project interest in the form of
24
wages paid to the apprentices.
25
To the extent that the subsidy offsets those wages, it is included in the
26
miner's mining revenue for the mining project interest for the 2012-13
27
MRRT year.
28
(2) However, that amount is reduced (if necessary) to reflect the
29
proportion of the amount of expenditure mentioned in
30
paragraph (1)(b) that is, or will be, included in
*
mining expenditure
31
for the mining project interest.
32
Chapter 2 General liability rules
Part 2-3 Mining profits
Division 30 Mining revenue
Section 30-45
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
28 Minerals Resource Rent Tax Bill 2011 No. , 2011
30-45 Recoupment of payments that give rise to royalty credits
1
An amount is included in a miner's
*
mining revenue for a mining
2
project interest for an
*
MRRT year if the amount is an excess
3
royalty recoupment mentioned in subsection 60-30(2) for the
4
interest.
5
Note:
Royalty recoupments are generally applied to reduce royalty credits
6
under section 60-30. However, if there are insufficient royalty credits
7
the excess is mining revenue under this section.
8
30-50 Compensation for loss of taxable resources
9
(1) An amount is included in a miner's
*
mining revenue for a mining
10
project interest for an
*
MRRT year to the extent that:
11
(a) during the year, the amount is received, or becomes
12
receivable, by any of the following
*
entities:
13
(i)
the
miner;
14
(ii)
an
entity
*
connected with the miner;
15
(iii)
an
*
affiliate of the miner;
16
(iv) an entity of which the miner is an affiliate;
17
(v) an affiliate of an entity covered by subparagraph (ii);
18
(vi) an entity connected with an entity covered by
19
subparagraph (ii), (iii) or (iv); and
20
(b) the amount is by way of insurance, compensation or
21
indemnity relating to loss of, destruction of or damage that:
22
(i) happens to a
*
taxable resource extracted from the
23
*
project area for the mining project interest, or to a thing
24
produced using such a taxable resource; and
25
(ii) happens before a
*
mining revenue event happens in
26
relation to the taxable resource; and
27
(c) the amount is reasonably attributable to the taxable resource,
28
as mentioned in step 2 of the method statement in subsection
29
30-25(1).
30
(2) Work out the extent to which the amount is reasonably attributable
31
to the
*
taxable resource as so mentioned by applying section 30-25
32
as if the amount were a revenue amount under subsection 30-25(2).
33
General liability rules Chapter 2
Mining profits Part 2-3
Mining revenue Division 30
Section 30-55
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 29
30-55 Amounts that do not relate to a particular mining revenue
1
event
2
An amount is included in a miner's
*
mining revenue for a mining
3
project interest for an
*
MRRT year to the extent that:
4
(a) during the year, the amount is received, or becomes
5
receivable, by the miner; and
6
(b) the amount is received, or becomes receivable, for a
*
supply,
7
or a proposed supply, of
*
taxable resources; and
8
(c) the amount does not relate to a particular
*
mining revenue
9
event.
10
Subdivision 30-D--Miscellaneous
11
Table of sections
12
30-60
No double counting
13
30-65
Expenditure incurred in causing amounts to be received etc.
14
30-70
Amounts taken to be received
15
30-75
GST and increasing adjustments
16
30-60 No double counting
17
If 2 or more provisions of this Act include the same amount in a
18
miner's
*
mining revenue (whether for the same
*
MRRT year or
19
different MRRT years), the amount is included only under the
20
provision that is most appropriate.
21
30-65 Expenditure incurred in causing amounts to be received etc.
22
An amount that, under Subdivision 30-B or 30-C, is to be included
23
in a miner's
*
mining revenue for a mining project interest for an
24
*
MRRT year is reduced to the extent that:
25
(a) the miner necessarily incurred any expenditure in enforcing
26
the miner's entitlement to receive the amount; and
27
(b) the expenditure does not relate to any other amount; and
28
(c) the expenditure was not
*
mining expenditure for the mining
29
project interest; and
30
Chapter 2 General liability rules
Part 2-3 Mining profits
Division 30 Mining revenue
Section 30-70
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
30 Minerals Resource Rent Tax Bill 2011 No. , 2011
(d) the expenditure was not
*
excluded expenditure.
1
Note:
This section ensures that the costs associated with mining revenue, but
2
not dealt with under Division 35, are taken into account.
3
Example: If a miner undertakes litigation to receive compensation for damage to
4
the miner's taxable resources, the amount included in the miner's
5
mining revenue under section 30-50 would be reduced under this
6
section to take account of the miner's litigation costs.
7
30-70 Amounts taken to be received
8
For the purposes of the
*
MRRT law, an amount that is not actually
9
to be paid over to a miner is taken to be received by the miner if it
10
is, and when it is, applied or otherwise dealt with on behalf of the
11
miner or as the miner directs.
12
30-75 GST and increasing adjustments
13
An amount that, under this Division, is to be included in the
14
miner's
*
mining revenue does not include:
15
(a)
any
*
GST payable on a
*
supply for which the amount is the
16
consideration, or part of the consideration; or
17
(b)
any
*
increasing adjustments that relate to such a supply.
18
19
General liability rules Chapter 2
Mining profits Part 2-3
Mining expenditure Division 35
Section 35-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 31
Division 35--Mining expenditure
1
Table of Subdivisions
2
Guide to Division 35
3
35-A
A miner's mining expenditure
4
35-B Excluded
expenditure
5
Guide to Division 35
6
35-1 What this Division is about
7
A miner's mining expenditure for a mining project interest
8
includes expenditure necessarily incurred in carrying on mining
9
operations upstream of the valuation point.
10
However, some expenditure is specifically excluded.
11
Note: For
pre-mining expenditure, see section 70-35.
12
Subdivision 35-A--A miner's mining expenditure
13
Table of sections
14
35-5 A
miner's
mining expenditure
15
35-10 General
expenditure
16
35-15 Meaning
of
upstream mining operations
17
35-20 Meaning
of
mining operations
18
35-25
No double counting
19
35-5 A miner's mining expenditure
20
(1)
A
miner's
mining expenditure for a mining project interest that the
21
miner has, for an
*
MRRT year, is the sum of all the amounts that,
22
under this Act, are included in the miner's mining expenditure for
23
that interest for that year.
24
Note:
Most of the amounts are covered by this Division. However, amounts
25
arising as a result of adjustments to take account of changes in
26
Chapter 2 General liability rules
Part 2-3 Mining profits
Division 35 Mining expenditure
Section 35-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
32 Minerals Resource Rent Tax Bill 2011 No. , 2011
circumstances may also be included in a miner's mining expenditure
1
(see Division 160).
2
(2) However, an amount is not included in the miner's mining
3
expenditure for the mining project interest for the
*
MRRT year to
4
the extent that it is
*
excluded expenditure.
5
Note: For
excluded expenditure, see Subdivision 35-B.
6
35-10 General expenditure
7
(1) An amount of expenditure is included in a miner's
*
mining
8
expenditure for a mining project interest for an
*
MRRT year to the
9
extent that the miner necessarily incurred the amount, in that year,
10
in the carrying on (by the miner or another
*
entity) of
*
upstream
11
mining operations for the mining project interest.
12
(2) The expenditure may be of either a capital or revenue nature.
13
35-15 Meaning of upstream mining operations
14
*
Mining operations for a mining project interest are upstream
15
mining operations for the mining project interest to the extent the
16
operations:
17
(a) are operations or activities of a kind mentioned in paragraph
18
35-20(1)(a) for the mining project interest; and
19
(b) do not involve doing anything to, or with, the
*
taxable
20
resources extracted from the
*
project area for the mining
21
project interest after those taxable resources reach their
22
*
valuation point.
23
Examples: The following are some examples of operations or activities that might
24
be upstream mining operations:
25
(a) obtaining the agreement of native title holders as part of the
26
process of obtaining a production right over the project area;
27
(b) exploring for taxable resources in the project area;
28
(c) crushing and weighing the taxable resources before they reach
29
their valuation point;
30
(d) training, engaging, employing, paying, accommodating and
31
ensuring the safety of personnel, and other supportive head office
32
activities, to the extent they are involved in operations or
33
General liability rules Chapter 2
Mining profits Part 2-3
Mining expenditure Division 35
Section 35-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 33
activities relating to getting the taxable resource to the valuation
1
point;
2
(e) developing plans and engineering specifications for, and
3
constructing, facilities (whether in the project area or not) to be
4
used in recovering, transporting and storing the taxable resources
5
before they reach their valuation point;
6
(f) acquiring and maintaining plant or equipment for use in
7
recovering, transporting or storing the taxable resources before
8
they reach their valuation point;
9
(g) upgrading computer software used to control inventory (like
10
consumables and spare parts) used for recovering, transporting or
11
storing the taxable resources before they reach their valuation
12
point;
13
(h) rehabilitation of a project area from damage caused by activities
14
relating to the exploration, extraction and movement of taxable
15
resources to the valuation point.
16
Note: For
downstream mining operations, see section 255-15.
17
35-20 Meaning of mining operations
18
(1) Operations or activities are mining operations, for a mining project
19
interest, to the extent that the operations or activities:
20
(a) are preliminary or integral to, or consequential upon:
21
(i) extracting or producing
*
taxable resources from the
22
*
project area for the mining project interest; or
23
(ii) producing something using those taxable resources; but
24
(b) do not involve doing anything to, or with, those taxable
25
resources after they reach the form and location they are in
26
when:
27
(i)
a
*
mining revenue event of a kind mentioned in
28
paragraph 30-15(1)(a) or (b) happens in relation to
29
them; or
30
(ii) they are first applied to producing something in relation
31
to which a mining revenue event of a kind mentioned in
32
paragraph 30-15(1)(c) happens.
33
(2) Without limiting subsection (1), the following activities are mining
34
operations for a mining project interest:
35
(a)
*
exploration or prospecting for
*
taxable resources in the
36
*
project area for the mining project interest;
37
Chapter 2 General liability rules
Part 2-3 Mining profits
Division 35 Mining expenditure
Section 35-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
34 Minerals Resource Rent Tax Bill 2011 No. , 2011
(b) extracting taxable resources from the project area;
1
(c) doing anything to, or with, taxable resources extracted or
2
produced from the project area before they reach the form
3
and location they are in when a
*
mining revenue event
4
happens in relation to them;
5
(d) obtaining access to the project area for any of the other
6
activities mentioned in this subsection (other than
7
paragraph (h));
8
(e) acquiring, constructing or maintaining anything to be used, or
9
reasonably expected to be used, for any of the activities
10
mentioned in any of paragraphs (a) to (d) (even if no such
11
activity is happening at the time the acquisition, construction
12
or maintenance happens);
13
(f) rehabilitating the project area, or any other land affected by
14
any activity mentioned in any of paragraphs (a) to (e);
15
(g) closing down any activity mentioned in any of paragraphs (a)
16
to (f);
17
(h) any activity done in furtherance of an activity mentioned in
18
any of paragraphs (a) to (g).
19
35-25 No double counting
20
If 2 or more provisions of this Act include the same amount in a
21
miner's
*
mining expenditure (whether for the same
*
MRRT year or
22
a different MRRT year), the amount is included only under the
23
provision that is most appropriate.
24
Subdivision 35-B--Excluded expenditure
25
Table of sections
26
35-35
Cost of acquiring rights and interests in projects
27
35-40 Royalties
28
35-45 Meanings
of
mining royalty and private mining royalty
29
35-50 Financing
costs
30
35-55
Hire purchase agreements
31
35-60
Non-adjacent land and buildings used in administrative or accounting
32
activities
33
General liability rules Chapter 2
Mining profits Part 2-3
Mining expenditure Division 35
Section 35-35
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 35
35-65
Hedging or foreign exchange arrangements
1
35-70
Rehabilitation bond and trust payments
2
35-75
Payments of income tax or GST
3
35-35 Cost of acquiring rights and interests in projects
4
(1) An amount of expenditure is excluded expenditure to the extent
5
that it relates to acquiring, or acquiring an interest in, a
*
production
6
right covering an area, unless the expenditure is in relation to the
7
grant of the production right.
8
(2) An amount of expenditure is excluded expenditure to the extent
9
that it relates to acquiring a mining project interest.
10
(3) An amount of expenditure is excluded expenditure to the extent
11
that it relates to acquiring an interest in profits, receipts or
12
expenditures of, or relating to, a mining project interest.
13
35-40 Royalties
14
(1) An amount of expenditure is excluded expenditure to the extent
15
that it is any of the following:
16
(a)
a
*
mining royalty;
17
(b)
a
*
private mining royalty;
18
(c) a payment that gives rise to a
*
royalty credit under paragraph
19
60-20(1)(b) (payments by way of recoupment for mining
20
royalties).
21
(2) Despite subsection (1), a
*
private mining royalty is not excluded
22
expenditure, to the extent that:
23
(a) it is paid to an
*
entity as consideration for the entity
24
performing services that form part of
*
upstream mining
25
operations for a mining project interest; and
26
(b) it does not represent a share of the profits made from a
27
*
mining venture relating to the mining project interest.
28
Chapter 2 General liability rules
Part 2-3 Mining profits
Division 35 Mining expenditure
Section 35-45
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
36 Minerals Resource Rent Tax Bill 2011 No. , 2011
(3) Despite subsection (1), a
*
private mining royalty is not excluded
1
expenditure to the extent that it is paid to an entity under an
2
agreement entered into with the entity:
3
(a) before 2 May 2010; and
4
(b) at a time when the entity is an STB (within the meaning of
5
Division 1AB of Part III of the Income Tax Assessment Act
6
1936) other than an
*
excluded STB.
7
(4) Despite subsection (1), a
*
private mining royalty is not excluded
8
expenditure, to the extent that it is by way of consideration for the
9
carrying on of
*
mining operations in the
*
project area for a mining
10
project interest, if it is paid:
11
(a) to a native title holder (within the meaning of the Native Title
12
Act 1993) whose approved determination of native title
13
(within the meaning of that Act) relates to the project area for
14
the mining project interest; or
15
(b) to a registered native title claimant (within the meaning of the
16
Native Title Act 1993) whose claimant application (within the
17
meaning of that Act) relates to the project area for the mining
18
project interest; or
19
(c) to a person who holds a right that:
20
(i) arises under another
*
Australian law dealing with the
21
rights of
*
Aboriginal persons or
*
Torres Strait Islanders
22
in relation to land or waters; and
23
(ii) relates to the project area for the mining project interest.
24
(5) To the extent a
*
private mining royalty is not
*
excluded
25
expenditure because of subsection (3) or (4), it is not excluded
26
expenditure under section 35-35.
27
35-45 Meanings of mining royalty and private mining royalty
28
(1) An amount of expenditure is a mining royalty to the extent the
29
expenditure:
30
(a) is made in relation to a
*
taxable resource extracted under
31
authority of a
*
production right; and
32
General liability rules Chapter 2
Mining profits Part 2-3
Mining expenditure Division 35
Section 35-50
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 37
(b) is made under a
*
Commonwealth law, a
*
State law or a
1
*
Territory law; and
2
(c)
either:
3
(i)
is
a
*
royalty; or
4
(ii) would be a royalty, if the taxable resource were owned
5
by the Commonwealth, State or Territory (as the case
6
requires) just before the recovery of the resource.
7
Note: Subparagraph
(1)(c)(ii)
covers
a case where an amount is payable
8
under an Australian law in relation to minerals owned by private
9
landowners.
10
(2) An amount of expenditure is a private mining royalty if:
11
(a)
it
is:
12
(i)
a
*
taxable resource or a quantity of something produced
13
using a taxable resource; or
14
(ii) calculated by reference to a taxable resource or a
15
quantity of something produced using a taxable
16
resource; or
17
(iii) calculated by reference to the gross or net value of a
18
taxable resource or something produced using a taxable
19
resource; or
20
(iv) calculated by reference to the revenue, expenditure or
21
profits made or incurred by an
*
entity in relation to a
22
taxable resource or a quantity of something produced
23
using a taxable resource; and
24
(b) it is not a
*
mining royalty.
25
35-50 Financing costs
26
An amount of expenditure is excluded expenditure to the extent
27
that it relates to:
28
(a)
an
*
arrangement that gives rise to a
*
financial arrangement;
29
or
30
(b)
an
*
equity interest that is a financial arrangement; or
31
(c)
a
*
scheme that gives rise to an equity interest issued by the
32
miner.
33
Chapter 2 General liability rules
Part 2-3 Mining profits
Division 35 Mining expenditure
Section 35-55
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
38 Minerals Resource Rent Tax Bill 2011 No. , 2011
Examples:
1
(a) borrowing costs, exit fees or interest payments relating to a loan,
2
or repayments of principal; and
3
(b) payments of dividends or payments for buying back or cancelling
4
shares.
5
35-55 Hire purchase agreements
6
(1) An amount of expenditure is excluded expenditure to the extent
7
that it relates to a
*
hire purchase agreement.
8
(2) However, if an amount of expenditure is excluded expenditure for
9
a miner under subsection (1) in relation to a
*
hire purchase
10
agreement:
11
(a) the miner is taken to have incurred the amount mentioned in
12
subsection (3) at the earliest time at which the property is
13
*
supplied to the miner under the agreement; and
14
(b) the miner is taken to have acquired the property for that
15
amount at the time the amount is incurred; and
16
(c) the amount is not excluded expenditure under subsection (1)
17
or section 35-50.
18
(3) For the purposes of paragraph (2)(a), the amount is:
19
(a) if an amount is stated to be the cost or value of the property
20
for the purposes of the agreement, and the miner and the hirer
21
were dealing with each other at
*
arm's length in connection
22
with the agreement--the amount so stated; or
23
(b) otherwise--the amount that could reasonably have been
24
expected to have been paid by the miner for the purchase of
25
the property if:
26
(i) the hirer had actually sold the property to the miner at
27
the start of the agreement; and
28
(ii) the hirer and the miner were dealing with each other at
29
arm's length in connection with the sale.
30
Note:
The amount may be mining expenditure under this Division.
31
General liability rules Chapter 2
Mining profits Part 2-3
Mining expenditure Division 35
Section 35-60
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 39
35-60 Non-adjacent land and buildings used in administrative or
1
accounting activities
2
An amount of expenditure is excluded expenditure to the extent
3
that:
4
(a) it relates to land or buildings that are not located at or
5
adjacent to the
*
project area for a mining project interest that
6
the miner has; and
7
(b) the land or buildings are for use in connection with
8
administrative or accounting activities; and
9
(c) the expenditure is of a capital nature.
10
35-65 Hedging or foreign exchange arrangements
11
An amount of expenditure is excluded expenditure to the extent
12
that it relates to:
13
(a)
a
*
derivative financial arrangement; or
14
(b)
a
*
foreign currency hedge.
15
35-70 Rehabilitation bond and trust payments
16
(1) An amount of expenditure is excluded expenditure to the extent
17
that it is provided as security (however described) for rehabilitation
18
of the
*
project area for a mining project interest.
19
(2) An amount of expenditure that is incurred by a trustee or
20
bondholder out of an amount provided as security as mentioned in
21
subsection (1) is taken to have been incurred by a miner in relation
22
to a mining project interest to the extent that:
23
(a) the amount is for rehabilitation of an area; and
24
(b) the area is the
*
project area for the mining project interest the
25
miner has at the time the amount is incurred; and
26
(c) if more than one miner has a mining project interest in
27
relation to that project area at that time--the rehabilitation
28
reasonably relates to the mining project interest.
29
Note:
The trustee or bondholder is required to give the miner the information
30
it needs to determine the extent, if any, to which the amount is mining
31
Chapter 2 General liability rules
Part 2-3 Mining profits
Division 35 Mining expenditure
Section 35-75
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
40 Minerals Resource Rent Tax Bill 2011 No. , 2011
expenditure for the miner: see Division 121 in Schedule 1 to the
1
Taxation Administration Act 1953.
2
35-75 Payments of income tax or GST
3
An amount of expenditure is excluded expenditure to the extent
4
that it is:
5
(a) tax payable under the Income Tax Assessment Act 1936, or
6
the Income Tax Assessment Act 1997; or
7
(b)
*
GST; or
8
(c) an amount relating to:
9
(i)
an
*
input tax credit to which the miner is entitled; or
10
(ii)
a
*
decreasing adjustment that the miner has; or
11
(d) an amount of penalty or interest payable under a
*
taxation
12
law.
13
14
General liability rules Chapter 2
Mining profits Part 2-3
Valuation point Division 40
Section 40-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 41
Division 40--Valuation point
1
Guide to Division 40
2
40-1 What this Division is about
3
The concept of the valuation point is central to determining the
4
revenue and expenditure that make up mining profit.
5
The valuation point is a defined point in the extractive process.
6
Table of sections
7
Operative provisions
8
40-5 Meaning
of
valuation point
9
Operative provisions
10
40-5 Meaning of valuation point
11
Resource is stored on run-of-mine stockpile
12
(1)
The
valuation point for a
*
taxable resource is the point just before
13
the resource is removed from the run-of-mine stockpile on which it
14
is stored.
15
Resource is not stored on run-of-mine stockpile
16
(2)
The
valuation point for a
*
taxable resource that is not stored on a
17
run-of-mine stockpile is:
18
(a) if the resource is moved away from the immediate point of
19
extraction to a place, at or adjacent to the point of extraction,
20
where the resource enters the first beneficiation process after
21
extraction--the point at which the resource enters that
22
beneficiation process; or
23
Chapter 2 General liability rules
Part 2-3 Mining profits
Division 40 Valuation point
Section 40-5
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
42 Minerals Resource Rent Tax Bill 2011 No. , 2011
(b) if paragraph (a) does not apply--the point at which the
1
resource is first moved away from the immediate point of
2
extraction.
3
Resource is in gaseous state
4
(3)
However,
the
valuation point for a
*
taxable resource that is in a
5
gaseous state at the point mentioned in subsection (2) is the first
6
point at which the gaseous resource exits a wellhead.
7
Exception where supply happens first
8
(4) Despite subsections (1), (2) and (3), the valuation point for a
9
*
taxable resource is instead the point just before the
*
initial supply
10
of the resource, if the time the resource is at that point is before the
11
time it would be at the valuation point for the resource under
12
subsection (1), (2) or (3).
13
Example: If, under an agreement, a resource is supplied to another party when
14
the resource is delivered to the run-of-mine stockpile, the valuation
15
point is just before the resource is delivered to the stockpile.
16
17
General liability rules Chapter 2
Low profit offsets Part 2-4
Low profit offsets Division 45
Section 45-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 43
Part 2-4--Low profit offsets
1
Division 45--Low profit offsets
2
Guide to Division 45
3
45-1 What this Division is about
4
A miner is entitled to an offset for an MRRT year if the miner's
5
group mining profit for the year is less than $100 million.
6
If that profit is less than or equal to $50 million, an offset reduces
7
the amount of MRRT the miner must pay for the year to nil.
8
An offset phases out between profits of $50 million and $100
9
million, so that the miner is not immediately subjected to a full
10
MRRT liability when the miner's group profit exceeds $50 million.
11
Table of sections
12
Operative provisions
13
45-5
Low profit offset--profits not greater than $50 million
14
45-10
Low profit offset--profits greater than $50 million and less than $100
15
million
16
Operative provisions
17
45-5 Low profit offset--profits not greater than $50 million
18
(1) A miner has an offset for an
*
MRRT year if the sum of the
*
mining
19
profits (the miner's group mining profit) for the year of each
20
mining project interest of the following
*
entities is less than or
21
equal to $50 million:
22
(a)
the
miner;
23
(b)
an
entity
*
connected with the miner;
24
(c)
an
*
affiliate of the miner;
25
Chapter 2 General liability rules
Part 2-4 Low profit offsets
Division 45 Low profit offsets
Section 45-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
44 Minerals Resource Rent Tax Bill 2011 No. , 2011
(d) an entity of which the miner is an affiliate;
1
(e) an affiliate of an entity covered by paragraph (b);
2
(f) an entity connected with an entity covered by paragraph (b),
3
(c) or (d).
4
Note 1:
An offset under this section reduces the amount of MRRT that a miner
5
must pay for an MRRT year: see section 10-15.
6
Note 2:
If the MRRT year is not a 12-month period, the miner's group mining
7
profit is affected by section 190-20 (substituted accounting periods).
8
(2) The amount of the miner's offset for the
*
MRRT year is the sum of
9
the miner's
*
MRRT liabilities for each of the miner's mining
10
project interests for the year.
11
45-10 Low profit offset--profits greater than $50 million and less
12
than $100 million
13
(1) A miner with a group mining profit greater than $50 million and
14
less than $100 million for an
*
MRRT year has an offset for that
15
year if the amount worked out using the following formula is
16
greater than zero:
17
Miner's share
Taper Miner's
group
$50 million
of group mining
amount
MRRT allowances
profit
-
-
×
18
where:
19
miner's group MRRT allowances is the sum of the
*
MRRT
20
allowances for each mining project interest for the year that an
21
*
entity mentioned in subsection 45-5(1) has.
22
miner's share of group mining profit is the sum of the miner's
23
*
mining profit for each of its mining project interests for the year,
24
divided by the miner's group mining profit for the year.
25
taper amount is the difference between the miner's group mining
26
profit for the year and $50 million.
27
Note 1:
An offset under this section reduces the amount of MRRT that a miner
28
must pay for an MRRT year: see section 10-15.
29
General liability rules Chapter 2
Low profit offsets Part 2-4
Low profit offsets Division 45
Section 45-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 45
Note 2:
If the MRRT year is not a 12-month period, the miner's group MRRT
1
allowances and the miner's share of group mining profit are affected
2
by section 190-20 (substituted accounting periods).
3
(2) The amount of the miner's offset for the
*
MRRT year is the
4
amount worked out using the formula in subsection (1), multiplied
5
by the
*
MRRT rate.
6
Example: For the 2013-14 MRRT year, Pinder Mines Ltd has a total mining
7
profit of $60 million, a group mining profit of $80 million, group
8
MRRT allowances of $5 million and a taper amount of $30 million
9
($80 million - $50 million). The amount worked out using the formula
10
in subsection (1) is $11.25 million:(($50 million - $30 million - $5
11
million) ×
3
/
4
). Multiplying this amount by the MRRT rate gives
12
Pinder Mines Ltd an offset for the year of $2.53 million.
13
14
Chapter 2 General liability rules
Part 2-5 Payment of MRRT
Division 50 How to work out when to pay MRRT
Section 50-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
46 Minerals Resource Rent Tax Bill 2011 No. , 2011
Part 2-5--Payment of MRRT
1
Division 50--How to work out when to pay MRRT
2
Guide to Division 50
3
50-1 What this Division is about
4
Assessed MRRT that a miner is liable to pay, and any associated
5
interest charges, must be paid to the Commissioner by the time
6
provided under this Division.
7
Note 1:
For payment of instalments, see Division 115 in Schedule 1 to the
8
Taxation Administration Act 1953.
9
Note 2:
For provisions about the collection and recovery of MRRT and other
10
tax-related liabilities, see Part 4-15 in Schedule 1 to the Taxation
11
Administration Act 1953.
12
Table of sections
13
Operative provisions
14
50-5
When assessed MRRT is payable
15
50-10
When shortfall interest charge is payable
16
50-15
General interest charge payable on unpaid assessed MRRT or shortfall
17
interest charge
18
Operative provisions
19
50-5 When assessed MRRT is payable
20
(1)
*
Assessed MRRT that a miner must pay under section 10-20 for an
21
*
MRRT year is due and payable on the first day of the sixth month
22
after the end of the MRRT year.
23
Example: If the miner's MRRT year is the same as the financial year, the
24
assessed MRRT would be due and payable on 1 December.
25
General liability rules Chapter 2
Payment of MRRT Part 2-5
How to work out when to pay MRRT Division 50
Section 50-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 47
Note:
The Commissioner may defer the time at which the assessed MRRT is
1
due and payable: see section 255-10 in Schedule 1 to the Taxation
2
Administration Act 1953.
3
(2) To avoid doubt, the
*
assessed MRRT may be taken to have been
4
due and payable at a time before the
*
assessment was made.
5
(3) If the Commissioner amends a miner's
*
assessment, any extra
6
*
assessed MRRT resulting from the amendment is due and payable
7
21 days after the day on which the Commissioner gives the miner
8
notice of the amended assessment.
9
50-10 When shortfall interest charge is payable
10
An amount of
*
shortfall interest charge that a miner is liable to pay
11
is due and payable 21 days after the day on which the
12
Commissioner gives the miner notice of the charge.
13
Note 1:
Shortfall interest charge may be payable, on any amount of extra
14
assessed MRRT payable as a result of an amended assessment, for
15
each day in the period that:
16
(a) starts at the time assessed MRRT was due and payable on the
17
miner's original assessment; and
18
(b) finishes on the day before the day on which the Commissioner
19
gives the miner notice of the amended assessment.
20
Note 2:
For provisions about liability for shortfall interest charge, see
21
Division 280 in Schedule 1 to the Taxation Administration Act 1953.
22
50-15 General interest charge payable on unpaid assessed MRRT or
23
shortfall interest charge
24
If an amount of
*
assessed MRRT or
*
shortfall interest charge that a
25
miner is liable to pay remains unpaid after the time by which it is
26
due to be paid, the miner is liable to pay the
*
general interest
27
charge on the unpaid amount for each day in the period that:
28
(a) starts at the beginning of the day on which the amount was
29
due to be paid; and
30
(b) finishes at the end of the last day on which, at the end of the
31
day, any of the following remains unpaid:
32
(i) the assessed MRRT or shortfall interest charge;
33
Chapter 2 General liability rules
Part 2-5 Payment of MRRT
Division 50 How to work out when to pay MRRT
Section 50-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
48 Minerals Resource Rent Tax Bill 2011 No. , 2011
(ii) general interest charge on any of the assessed MRRT or
1
shortfall interest charge.
2
Note 1:
The general interest charge is worked out under Part IIA of the
3
Taxation Administration Act 1953.
4
Note 2:
Shortfall interest charge is worked out under Division 280 in
5
Schedule 1 to that Act.
6
7
MRRT allowances Chapter 3
Royalty allowances Part 3-1
Royalty allowances Division 60
Section 60-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 49
Chapter 3--MRRT allowances
1
Part 3-1--Royalty allowances
2
Division 60--Royalty allowances
3
Guide to Division 60
4
60-1 What this Division is about
5
Mining royalties paid to the Commonwealth, States and Territories
6
reduce a miner's MRRT liabilities for a mining project interest.
7
To work out the royalty allowance, the amount of the royalty is
8
grossed-up using the MRRT rate, in effect reducing the MRRT
9
liability by the amount of the royalty.
10
Royalty credits that are not applied in an MRRT year are uplifted
11
and may be able to be applied in later years.
12
Royalty credits are reduced if a miner recoups an amount giving
13
rise to a royalty credit.
14
Note:
Royalty credits that are not applied to a royalty allowance may be
15
applied to transferred royalty allowances for other mining project
16
interests (see Division 65).
17
Table of sections
18
Operative provisions
19
60-5
Objects of this Division
20
60-10
When a miner has a royalty allowance
21
60-15
The amount of a royalty allowance
22
60-20
When a royalty credit arises
23
60-25
Amount of a royalty credit
24
60-30
Royalty credits reduced by recoupments
25
Chapter 3 MRRT allowances
Part 3-1 Royalty allowances
Division 60 Royalty allowances
Section 60-5
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
50 Minerals Resource Rent Tax Bill 2011 No. , 2011
Operative provisions
1
60-5 Objects of this Division
2
The objects of this Division are:
3
(a) to reduce a miner's
*
MRRT liability relating to profits
4
relating to
*
taxable resources, to the extent those taxable
5
resources are subject to Commonwealth, State and Territory
6
royalties; and
7
(b) to provide an uplift for unapplied
*
royalty credits, which
8
compensates for:
9
(i) the delay where royalty credits are applied in a later
10
year; and
11
(ii) the risk that royalty credits may not be able to be
12
applied in a later year.
13
60-10 When a miner has a royalty allowance
14
A miner has a royalty allowance for a mining project interest for
15
an
*
MRRT year if:
16
(a) the miner has a
*
mining profit for the interest for the year;
17
and
18
(b) one or more
*
royalty credits (available royalty credits) relate
19
to the interest.
20
60-15 The amount of a royalty allowance
21
(1) The amount of the miner's
*
royalty allowance is so much of the
22
sum of the available royalty credits as does not exceed the
*
mining
23
profit.
24
(2) In working out the amount of a
*
royalty allowance, available
25
royalty credits are applied in the order in which they arise.
26
Note:
If an available royalty credit cannot be wholly applied in an MRRT
27
year, the unapplied amount can be carried forward: see section 60-25.
28
MRRT allowances Chapter 3
Royalty allowances Part 3-1
Royalty allowances Division 60
Section 60-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 51
60-20 When a royalty credit arises
1
(1) A liability a miner incurs gives rise to a royalty credit for a mining
2
project interest the miner has to the extent that the liability is to
3
pay, in relation to a
*
taxable resource extracted under the authority
4
of the
*
production right to which the interest relates:
5
(a)
a
*
mining royalty; or
6
(b) an amount to another
*
entity by way of
*
recoupment of a
7
liability the other entity incurs that, because of a previous
8
application of this section:
9
(i) gives rise at any time to a royalty credit for a mining
10
project interest the other entity has that relates to the
11
production right; or
12
(ii) would give rise to such a royalty credit, if the other
13
entity had a mining project interest in relation to the
14
production right.
15
Note:
Sections 60-30 and 30-45 set out consequences for the entity that
16
receives a recoupment of an amount giving rise to a royalty credit.
17
(2)
The
*
royalty credit arises at the time the miner incurs the liability,
18
and relates to the
*
MRRT year in which it arises.
19
Note:
If more than one liability satisfying this section is incurred in an
20
MRRT year, more than one royalty credit arises in that year.
21
(3)
The
*
royalty credit ceases to be a royalty credit if it has been fully
22
applied in working out any of the following:
23
(a) a
*
royalty allowance for the mining project interest;
24
(b)
*
transferred royalty allowances for other mining project
25
interests.
26
60-25 Amount of a royalty credit
27
(1) To work out the amount of the
*
royalty credit in the
*
MRRT year
28
in which the royalty credit arises in relation to a liability of a
29
miner:
30
(a) work out how much of the liability gives rise to a royalty
31
credit under section 60-20; and
32
Chapter 3 MRRT allowances
Part 3-1 Royalty allowances
Division 60 Royalty allowances
Section 60-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
52 Minerals Resource Rent Tax Bill 2011 No. , 2011
(b) divide the result by the
*
MRRT rate.
1
Note:
Paragraph (b) grosses-up the royalty payment to an amount that will
2
reduce the ultimate MRRT liability by the amount of the royalty
3
payment.
4
Example: A miner pays a State royalty of $22.5 million in an MRRT year. The
5
royalty credit in that year is:
6
$22.5 million
$100 million
MRRT rate
=
7
(2) In a later
*
MRRT year, the amount of the
*
royalty credit is:
8
Previous
Previous
amount of
application
Uplift factor
the royalty
of the royalty
credit
credit
-
×
9
where:
10
previous amount of the royalty credit is the amount of the
*
royalty
11
credit for the preceding
*
MRRT year.
12
previous application of the royalty credit is the sum of the
13
amounts of those parts (if any) of the
*
royalty credit that have been
14
applied in working out, for the preceding
*
MRRT year, any of the
15
following:
16
(a)
a
*
royalty allowance for the mining project interest;
17
(b) one or more
*
transferred royalty allowances for other mining
18
project interests.
19
uplift factor is:
20
*
*
Long term bond rate for the preceding MRRT year
1.07
+
21
Example: A royalty credit of $100 million arises in an MRRT year. $30 million
22
is applied to the royalty allowance in the year the credit arises. In the
23
same year, $30 million is applied to a transferred royalty allowance
24
under Division 65. Assume the long term bond rate for that year is
25
5.5%. In the next year, the amount of the royalty credit is:($100
26
million - ($30 million + $30 million)) x (0.055 + 1.07) = $45 million.
27
MRRT allowances Chapter 3
Royalty allowances Part 3-1
Royalty allowances Division 60
Section 60-30
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 53
60-30 Royalty credits reduced by recoupments
1
(1) To the extent an amount that is received or becomes receivable by
2
a miner is by way of
*
recoupment of a liability that gives rise to a
3
*
royalty credit for a mining project interest the miner has:
4
(a) the amount is to be increased by dividing it by the
*
MRRT
5
rate; and
6
(b) that increased amount is applied to reduce royalty credits for
7
the interest:
8
(i)
in
the
*
MRRT year in which the amount is received or
9
becomes receivable (the recoupment year); and
10
(ii) in the order in which the royalty credits arise; and
11
(iii) before applying the royalty credits in working out a
12
*
royalty allowance or a
*
transferred royalty allowance
13
for the recoupment year.
14
Note:
Paragraph (a) grosses-up the recoupment in the same way that
15
section 60-25 grosses-up the liability giving rise to the royalty credit.
16
(2) If the increased amount exceeds the sum of those
*
royalty credits,
17
section 30-45 applies to the excess (the excess royalty
18
recoupment) in the recoupment year.
19
20
Chapter 3 MRRT allowances
Part 3-2 Transferred royalty allowances
Division 65 Transferred royalty allowances
Section 65-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
54 Minerals Resource Rent Tax Bill 2011 No. , 2011
Part 3-2--Transferred royalty allowances
1
Division 65--Transferred royalty allowances
2
Guide to Division 65
3
65-1 What this Division is about
4
A miner's MRRT liability for a mining project interest may be
5
reduced by mining royalties, paid to the Commonwealth, States
6
and Territories, that relate to one or more other mining project
7
interests.
8
The interests must satisfy an integration test from the time the
9
royalty is incurred to the time it reduces the MRRT liability.
10
Table of sections
11
Operative provisions
12
65-5
Object of this Division
13
65-10
When a miner has a transferred royalty allowance
14
65-15
The amount of a transferred royalty allowance
15
65-20
Available royalty credits
16
Operative provisions
17
65-5 Object of this Division
18
The object of this Division is to enable
*
royalty credits arising in
19
relation to a mining project interest to reduce the
*
MRRT liability
20
of certain other mining project interests, if the interests are
21
*
integrated from the time the royalty credits arise to the end of the
22
*
MRRT year in which they are to be applied.
23
MRRT allowances Chapter 3
Transferred royalty allowances Part 3-2
Transferred royalty allowances Division 65
Section 65-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 55
65-10 When a miner has a transferred royalty allowance
1
A miner has a transferred royalty allowance for a mining project
2
interest for an
*
MRRT year if:
3
(a) there is an amount (a remaining profit) by which the miner's
4
*
mining profit for the interest for the year exceeds the
5
*
royalty allowance (if any) that the miner has for the interest
6
for the year; and
7
(b) there are one or more
*
royalty credits (available royalty
8
credits) that, under section 65-20, can be applied in working
9
out the transferred royalty allowance for the interest for the
10
year.
11
65-15 The amount of a transferred royalty allowance
12
(1) The amount of the miner's
*
transferred royalty allowance is so
13
much of the sum of the available royalty credits as does not exceed
14
the remaining profit.
15
(2) In working out the amount of a
*
transferred royalty allowance,
16
*
royalty credits are applied in the order in which they arise, but the
17
miner may choose the order in which to apply royalty credits that
18
arise at the same time.
19
Note:
Division 119 in Schedule 1 to the Taxation Administration Act 1953 is
20
about choices under the MRRT law.
21
65-20 Available royalty credits
22
(1)
A
*
royalty credit can be applied in working out a
*
transferred
23
royalty allowance for a mining project interest for an
*
MRRT year
24
(the transfer year) if:
25
(a) the mining project interest and the mining project interest for
26
which the royalty credit arises are
*
integrated at all times in
27
the period:
28
(i) starting at the time the
*
royalty credit arises; and
29
(ii) ending at the end of the transfer year; and
30
Note 1: For when a royalty credit arises, see section 60-20.
31
Chapter 3 MRRT allowances
Part 3-2 Transferred royalty allowances
Division 65 Transferred royalty allowances
Section 65-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
56 Minerals Resource Rent Tax Bill 2011 No. , 2011
Note 2: For when mining project interests are integrated, see
1
Division 255.
2
(b) the royalty credit does not relate to an MRRT year for which
3
there was a choice to use the alternative valuation method
4
under Division 175 in relation to the mining project interest
5
for which the royalty credit arises.
6
(2)
However,
the
*
royalty credit cannot be applied to the extent it is
7
applied in working out:
8
(a)
a
*
royalty allowance; or
9
(b)
a
*
transferred royalty allowance;
10
for another mining project interest for the year.
11
12
MRRT allowances Chapter 3
Pre-mining loss allowances Part 3-3
Pre-mining loss allowances Division 70
Section 70-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 57
Part 3-3--Pre-mining loss allowances
1
Division 70--Pre-mining loss allowances
2
Table of Subdivisions
3
Guide to Division 70
4
70-A
Object of this Division
5
70-B
When a miner has a pre-mining loss allowance
6
70-C Pre-mining
losses
7
70-D
Amounts of pre-mining losses
8
Guide to Division 70
9
70-1 What this Division is about
10
Pre-mining loss allowances enable expenditure (such as
11
exploration expenditure) incurred during the period before a
12
mining project interest comes into existence to reduce a miner's
13
MRRT liability for a mining project interest for an MRRT year.
14
Pre-mining losses that are unapplied at the end of the MRRT year
15
in which they arise are uplifted and may be able to be applied in
16
later years.
17
Note:
Pre-mining losses that are not applied to a pre-mining loss allowance
18
may be applied to transferred pre-mining loss allowances for other
19
mining project interests (see Division 95).
20
Subdivision 70-A--Object of this Division
21
Table of sections
22
70-5
Objects of this Division
23
70-5 Objects of this Division
24
The objects of this Division are:
25
Chapter 3 MRRT allowances
Part 3-3 Pre-mining loss allowances
Division 70 Pre-mining loss allowances
Section 70-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
58 Minerals Resource Rent Tax Bill 2011 No. , 2011
(a) to recognise a miner's net expenditure (including exploration
1
expenditure) incurred, before a
*
production right is granted,
2
in identifying and evaluating whether
*
taxable resources
3
could be extracted from an area; and
4
(b) to provide an uplift for unapplied
*
pre-mining losses, which
5
compensates for:
6
(i) the delay where pre-mining losses are applied in a later
7
year; and
8
(ii) the risk that pre-mining losses may not be able to be
9
applied in a later year.
10
Subdivision 70-B--When a miner has a pre-mining loss
11
allowance
12
Table of sections
13
70-10
When a miner has a pre-mining loss allowance
14
70-15
The amount of a pre-mining loss allowance
15
70-20
Available pre-mining losses for a pre-mining loss allowance
16
70-25 Meaning
of
pre-mining project interest etc.
17
70-10 When a miner has a pre-mining loss allowance
18
A miner has a pre-mining loss allowance for a mining project
19
interest for an
*
MRRT year if:
20
(a) there is an amount (a remaining profit) by which the miner's
21
*
mining profit for the interest for the year exceeds the sum of
22
all the
*
higher ranking allowances (if any) that the miner has
23
for the interest for the year; and
24
(b) there are one or more
*
pre-mining losses (available
25
pre-mining losses) that, under section 70-20, can be applied
26
in working out a pre-mining loss allowance for the interest
27
for the year.
28
MRRT allowances Chapter 3
Pre-mining loss allowances Part 3-3
Pre-mining loss allowances Division 70
Section 70-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 59
70-15 The amount of a pre-mining loss allowance
1
(1) The amount of the miner's
*
pre-mining loss allowance is so much
2
of the sum of the available pre-mining losses as does not exceed
3
the remaining profit.
4
Example: A miner has, for a mining project interest for an MRRT year, a mining
5
profit of $400 million, a royalty allowance of $200 million and a
6
transferred royalty allowance of $100 million. The sum of the
7
available pre-mining losses for the interest for the year is $20 million.
8
Under section 70-10, the miner has a pre-mining loss allowance for
9
the interest for the year because the mining profit exceeds the sum of
10
the higher ranked allowances ($300 million), giving the miner a
11
remaining profit of $100 million.
12
Under this section, the amount of the pre-mining loss allowance is the
13
sum of the available pre-mining losses ($20 million), because that sum
14
does not exceed the remaining profit.
15
(2) In working out the amount of a
*
pre-mining loss allowance,
16
*
pre-mining losses are applied in the order in which they arise.
17
Note:
If an available pre-mining loss cannot be wholly applied in an MRRT
18
year, the unapplied amount can be carried forward: see section 70-50.
19
70-20 Available pre-mining losses for a pre-mining loss allowance
20
(1)
A
*
pre-mining loss can be applied in working out a
*
pre-mining
21
loss allowance for the mining project interest for the year if the
22
mining project interest
*
originates from the
*
pre-mining project
23
interest to which the pre-mining loss relates.
24
Note:
Once a pre-mining loss has been fully applied, it ceases to be a
25
pre-mining loss (see subsection 70-30(2)), and therefore cannot be
26
applied in working out a pre-mining loss allowance.
27
(2) A mining project interest originates from a
*
pre-mining project
28
interest if:
29
(a)
the
*
termination day for the pre-mining project interest
30
happened; or
31
(b) the pre-mining project interest ceased to apply to the
*
project
32
area, or a part of the project area, for the mining project
33
interest;
34
Chapter 3 MRRT allowances
Part 3-3 Pre-mining loss allowances
Division 70 Pre-mining loss allowances
Section 70-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
60 Minerals Resource Rent Tax Bill 2011 No. , 2011
because the mining project interest started to apply to the project
1
area, or a part of the project area, for the pre-mining project
2
interest.
3
Note:
A mining project interest may originate from more than one
4
pre-mining project interest.
5
70-25 Meaning of pre-mining project interest etc.
6
(1)
A
pre-mining project interest is an interest in an
*
exploration right.
7
(2) However, if the
*
exploration right relates both to iron ore and to
8
other kinds of
*
taxable resources, treat the
*
pre-mining project
9
interest as:
10
(a) a pre-mining project interest relating to iron ore; and
11
(b) another pre-mining project interest relating to those other
12
kinds of taxable resources.
13
(3)
An
exploration right is an authority or right (however described)
14
under an
*
Australian law for a purpose (other than an incidental
15
purpose) of
*
exploration or prospecting for
*
taxable resources in a
16
particular area in
*
Australia.
17
Examples: The following are some examples of an exploration right:
18
(a) a mineral development licence;
19
(b) a retention lease;
20
(c) an
exploration
permit.
21
(4)
The
project area for a
*
pre-mining project interest is the area in
22
*
Australia covered by the
*
exploration right to which the
23
pre-mining project interest relates.
24
Subdivision 70-C--Pre-mining losses
25
Table of sections
26
70-30 Pre-mining
losses
27
70-35 Meaning
of
pre-mining expenditure etc.
28
70-40 Meaning
of
pre-mining revenue
29
MRRT allowances Chapter 3
Pre-mining loss allowances Part 3-3
Pre-mining loss allowances Division 70
Section 70-30
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 61
70-30 Pre-mining losses
1
(1)
A
pre-mining loss arises for an
*
MRRT year if:
2
(a) during the year, an
*
entity
*
holds a
*
pre-mining project
3
interest; and
4
(b)
the
entity's
*
pre-mining expenditure for the interest for the
5
year exceeds the entity's
*
pre-mining revenue for the interest
6
for the year.
7
(2) The pre-mining loss ceases to be a pre-mining loss if it has been
8
fully applied in working out any of the following:
9
(a)
a
*
pre-mining loss allowance for a mining project interest
10
that
*
originates from the
*
pre-mining project interest;
11
(b)
*
transferred pre-mining loss allowances for other mining
12
project interests.
13
70-35 Meaning of pre-mining expenditure etc.
14
Pre-mining expenditure
15
(1)
An
*
entity's pre-mining expenditure, for a
*
pre-mining project
16
interest for an
*
MRRT year, is the sum of all amounts that, under
17
this Act, are included in the entity's pre-mining expenditure for the
18
interest for the year.
19
Note:
Most of the amounts are covered by this section. However, amounts
20
arising as a result of adjustments to take account of changes in
21
circumstances may also be included in an entity's pre-mining
22
expenditure (see Division 160).
23
(2) An amount of expenditure is included in an
*
entity's
*
pre-mining
24
expenditure for a
*
pre-mining project interest for an
*
MRRT year
25
to the extent that the entity necessarily incurred the amount in that
26
year in carrying on
*
pre-mining project operations of the interest.
27
(3) The expenditure may be of either a capital or revenue nature.
28
Chapter 3 MRRT allowances
Part 3-3 Pre-mining loss allowances
Division 70 Pre-mining loss allowances
Section 70-35
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
62 Minerals Resource Rent Tax Bill 2011 No. , 2011
Excluded expenditure
1
(4) However, an amount is not included in the
*
entity's
*
pre-mining
2
expenditure for the
*
pre-mining project interest for the
*
MRRT
3
year to the extent that it:
4
(a)
is
*
excluded expenditure; or
5
(b) would be excluded expenditure, if:
6
(i) the pre-mining project interest were a mining project
7
interest; and
8
(ii)
the
*
exploration right to which the pre-mining project
9
interest relates were a
*
production right to which the
10
mining project interest relates; and
11
(iii) in a case where the entity is not a miner--the entity
12
were a miner.
13
Note: For
excluded expenditure, see Subdivision 35-B.
14
Pre-mining project operations
15
(5) Operations or activities are the pre-mining project operations of
16
the
*
pre-mining project interest to the extent that, if the pre-mining
17
project interest were a mining project interest, the operations or
18
activities would be
*
upstream mining operations in relation to such
19
a mining project interest.
20
(6) It does not matter where, or when, the operations or activities are
21
carried on.
22
Expenditure for deferred farm-out arrangement where no interest
23
transferred
24
(7) An amount of expenditure is included in an
*
entity's
*
pre-mining
25
expenditure for a
*
pre-mining project interest for an
*
MRRT year
26
to the extent that:
27
(a) another entity necessarily incurred the amount in that MRRT
28
year, or an earlier MRRT year, in carrying on
*
exploration or
29
prospecting for
*
taxable resources in the
*
project area for the
30
pre-mining project interest; and
31
MRRT allowances Chapter 3
Pre-mining loss allowances Part 3-3
Pre-mining loss allowances Division 70
Section 70-40
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 63
(b) the exploration or prospecting was carried on under an
1
*
arrangement with the entity; and
2
(c) the terms of the arrangement gave the other entity a right, or
3
a contingent right, to acquire from the entity an interest in the
4
*
exploration right to which the pre-mining project interest
5
relates; and
6
(d) in that MRRT year, the other entity stops having the right,
7
without acquiring the interest in the exploration right.
8
No double counting
9
(8) If 2 or more provisions of this Act include the same amount in an
10
*
entity's
*
pre-mining expenditure (whether for the same
*
MRRT
11
year or a different MRRT year), the amount is included only under
12
the provision that is most appropriate.
13
(9)
If:
14
(a) a provision of this Act includes an amount in an
*
entity's
15
*
pre-mining expenditure; and
16
(b) the same amount is included, by another provision of this
17
Act, in the entity's
*
mining expenditure (whether for the
18
same
*
MRRT year or a different MRRT year);
19
the amount is included only under the provision that is most
20
appropriate.
21
70-40 Meaning of pre-mining revenue
22
(1)
An
*
entity's pre-mining revenue for a
*
pre-mining project interest
23
that the entity
*
holds, for an
*
MRRT year, is the sum of all
24
amounts that, under this Act, are included in the entity's
25
pre-mining revenue for the interest for the year.
26
Note:
Most of the amounts are covered by this section. However, amounts
27
arising as a result of adjustments to take account of changes in
28
circumstances may also be included in an entity's pre-mining revenue
29
(see Division 160).
30
(2) An amount is included in the
*
entity's
*
pre-mining revenue for the
31
*
pre-mining project interest for the year if the amount would have
32
Chapter 3 MRRT allowances
Part 3-3 Pre-mining loss allowances
Division 70 Pre-mining loss allowances
Section 70-45
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
64 Minerals Resource Rent Tax Bill 2011 No. , 2011
been included in the entity's
*
mining revenue for a mining project
1
interest that the entity had for the year if:
2
(a) to the extent that the amount related to the pre-mining project
3
interest, it had related to the mining project interest; and
4
(b) to the extent that the amount related to
*
pre-mining
5
expenditure for the pre-mining project interest, it had related
6
to
*
mining expenditure for the mining project interest.
7
(3) An amount that, under this section, is to be included in the
*
entity's
8
pre-mining revenue does not include:
9
(a)
any
*
GST payable on a
*
supply for which the amount is the
10
consideration, or part of the consideration; or
11
(b)
any
*
increasing adjustments that relate to such a supply.
12
Subdivision 70-D--Amounts of pre-mining losses
13
Table of sections
14
70-45
Pre-mining losses for the MRRT years in which they arise
15
70-50
Pre-mining losses for later MRRT years
16
70-45 Pre-mining losses for the MRRT years in which they arise
17
In
the
*
MRRT year in which a
*
pre-mining loss arises, the amount
18
of the pre-mining loss is the difference between:
19
(a)
the
*
entity's
*
pre-mining expenditure, for the
*
pre-mining
20
project interest to which the pre-mining loss relates, for the
21
year; and
22
(b)
the
entity's
*
pre-mining revenue for that pre-mining project
23
interest for the year.
24
70-50 Pre-mining losses for later MRRT years
25
In a later
*
MRRT year, the amount of the
*
pre-mining loss is:
26
Previous Previous
amount
application
Uplift factor
of the loss
of the loss
-
×
27
MRRT allowances Chapter 3
Pre-mining loss allowances Part 3-3
Pre-mining loss allowances Division 70
Section 70-50
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 65
where:
1
previous amount of the loss is the amount of the
*
pre-mining loss
2
for the preceding
*
MRRT year.
3
previous application of the loss is the sum of the amounts of those
4
parts (if any) of the
*
pre-mining loss that have been applied in
5
working out, for the preceding
*
MRRT year, any of the following:
6
(a)
a
*
pre-mining loss allowance for a mining project interest
7
that the
*
entity has;
8
(b) one or more
*
transferred pre-mining loss allowances for other
9
mining project interests.
10
uplift factor is one of the following:
11
(a) if the later year is one of the 10
*
MRRT years after the
12
MRRT year in which the
*
pre-mining loss arose:
13
*Long term bond rate for the
1.07
*MRRT year preceding the later year +
14
(b) if the later year is not one of the 10 MRRT years after the
15
MRRT year in which the pre-mining loss arose:
16
*Long term bond rate for the
1
*MRRT year preceding the later year +
17
18
Chapter 3
MRRT allowances
Part 3-4
Mining loss allowances
Division 75
Mining loss allowances
Section 75-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
66 Minerals Resource Rent Tax Bill 2011 No. , 2011
Part 3-4--Mining loss allowances
1
Division 75--Mining loss allowances
2
Guide to Division 75
3
75-1 What this Division is about
4
Mining loss allowances enable mining losses to reduce the miner's
5
MRRT liability for the same mining project interest for a later
6
MRRT year.
7
Mining losses that are not applied in an MRRT year are uplifted
8
and may be able to be applied in later years.
9
Note:
Mining losses that are not applied to a mining loss allowance may be
10
applied to transferred mining loss allowances for other mining project
11
interests (see Division 100).
12
Table of sections
13
Operative provisions
14
75-5
Objects of this Division
15
75-10
When a miner has a mining loss allowance
16
75-15
The amount of a mining loss allowance
17
75-20 Mining
losses
18
Operative provisions
19
75-5 Objects of this Division
20
The objects of this Division are:
21
(a)
to
allow
*
mining losses of a mining project interest to be
22
applied in later years; and
23
(b) to provide an uplift for unapplied mining losses which
24
compensates for:
25
MRRT allowances Chapter 3
Mining loss allowances Part 3-4
Mining loss allowances Division 75
Section 75-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 67
(i) the delay where mining losses are applied in a later
1
year; and
2
(ii) the risk that mining losses may not be able to be applied
3
in a later year.
4
75-10 When a miner has a mining loss allowance
5
A miner has a mining loss allowance for a mining project interest
6
for an
*
MRRT year if:
7
(a) there is an amount (a remaining profit) by which the miner's
8
*
mining profit for the interest for the year exceeds the sum of
9
all the
*
higher ranking allowances (if any) that the miner has
10
for the interest for the year; and
11
(b) there are one or more
*
mining losses (available mining
12
losses) that relate to the interest.
13
75-15 The amount of a mining loss allowance
14
(1) The amount of the miner's
*
mining loss allowance is so much of
15
the sum of the available mining losses as does not exceed the
16
remaining profit.
17
(2) In working out the amount of a
*
mining loss allowance,
*
mining
18
losses are applied in the order in which they arise.
19
75-20 Mining losses
20
(1)
A
mining loss arises for a mining project interest for an
*
MRRT
21
year if the
*
mining expenditure for the interest for the year exceeds
22
the
*
mining revenue for the interest for the year.
23
(2) In that year, the amount of the
*
mining loss is the amount of the
24
excess.
25
(3) In a later
*
MRRT year, the amount of the
*
mining loss is:
26
Chapter 3
MRRT allowances
Part 3-4
Mining loss allowances
Division 75
Mining loss allowances
Section 75-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
68 Minerals Resource Rent Tax Bill 2011 No. , 2011
Previous
Previous
amount of
application
Uplift factor
the loss
of the loss
-
×
1
where:
2
previous amount of the loss is the amount of the
*
mining loss for
3
the preceding
*
MRRT year.
4
previous application of the loss is the sum of the parts (if any) of
5
the
*
mining loss that have been applied in working out, for the
6
preceding
*
MRRT year, any of the following:
7
(a)
a
*
mining loss allowance for the mining project interest;
8
(b) one or more
*
transferred mining loss allowances for other
9
mining project interests.
10
uplift factor is:
11
*
*
Long term bond rate for the preceding MRRT year
1.07
+
12
(4)
The
*
mining loss ceases to be a mining loss if it has been fully
13
applied in working out any of the following:
14
(a)
a
*
mining loss allowance for the mining project interest;
15
(b)
*
transferred mining loss allowances for other mining project
16
interests.
17
18
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Starting base allowances Division 80
Section 80-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 69
Part 3-5--Starting base allowances
1
Division 80--Starting base allowances
2
Table of Subdivisions
3
Guide to Division 80
4
80-A
Objects of this Division
5
80-B
When a miner has a starting base allowance
6
80-C
Starting base assets
7
80-D
Amounts of starting base losses
8
Guide to Division 80
9
80-1 What this Division is about
10
Starting base allowances enable the following to be taken into
11
account in a miner's MRRT liability for a mining project interest
12
for an MRRT year:
13
(a)
investments in assets in relation to upstream
14
mining operations before 2 May 2010;
15
(b)
certain expenditure on such assets (not including
16
expenditure to acquire rights to resources) made by
17
a miner between 2 May 2010 and 1 July 2012.
18
A starting base allowance consists of a miner's available starting
19
base losses. Starting base losses reflect the declines in value of
20
starting base assets.
21
Starting base losses that are not applied are increased by one of 2
22
uplift factors. Which uplift factor to use is governed by whether a
23
book value approach or a market value approach is applied to
24
valuing starting base assets.
25
Note 1:
A starting base allowance can arise in relation to a pre-mining project
26
interest from which a mining project interest originates.
27
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 80
Starting base allowances
Section 80-5
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
70 Minerals Resource Rent Tax Bill 2011 No. , 2011
Note 2:
Division 85 deals with the valuation approaches. Division 90 deals
1
with declines in value of starting base assets.
2
Note 3:
Division 165 deals with starting base adjustments, which apply if
3
starting base assets cease to be part of a miner's starting base.
4
Division 180 allows for valuation of starting base assets using a
5
look-back approach.
6
Subdivision 80-A--Objects of this Division
7
Table of sections
8
80-5
Objects of this Division
9
80-5 Objects of this Division
10
The objects of this Division are:
11
(a)
to:
12
(i) recognise the value of mining project interests, and
13
other assets used in
*
upstream mining operations, that
14
miners had when resource tax reforms were announced
15
on 2 May 2010; and
16
(ii) ensure that considerations relating to MRRT do not
17
deter miners from making further investments in assets
18
used in upstream mining operations in the period after
19
that announcement and before 1 July 2012;
20
by reducing miners'
*
MRRT liabilities based on declines in
21
value of those interests and assets after 1 July 2012; and
22
(b) to provide an uplift for unapplied
*
starting base losses which
23
compensates for:
24
(i) the delay where starting base losses are applied in a later
25
year; and
26
(ii) under a book value approach to valuation, the risk that
27
starting base losses may not be able to be applied in a
28
later year.
29
Subdivision 80-B--When a miner has a starting base allowance
30
Table of sections
31
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Starting base allowances Division 80
Section 80-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 71
80-10
When a miner has a starting base allowance
1
80-15
The amount of a starting base allowance
2
80-20
When a miner has a starting base loss
3
80-10 When a miner has a starting base allowance
4
A miner has a starting base allowance for a mining project interest
5
for an
*
MRRT year if:
6
(a) there is an amount (a remaining profit) by which the miner's
7
*
mining profit for the interest for the year exceeds the sum of
8
all the
*
higher ranking allowances (if any) that the miner has
9
for the interest for the year; and
10
(b) there are one or more
*
starting base losses (available starting
11
base losses) that relate to the interest.
12
80-15 The amount of a starting base allowance
13
(1) The amount of the miner's
*
starting base allowance is so much of
14
the sum of the miner's available starting base losses as does not
15
exceed the remaining profit.
16
(2) In working out the amount of a
*
starting base allowance,
*
starting
17
base losses are applied in the order in which they arise.
18
Note 1:
If an available starting base loss cannot be wholly applied in an
19
MRRT year, the unapplied amount can be carried forward: see
20
section 80-45.
21
Note 2:
Starting base losses can be affected by starting base adjustments under
22
Division 165.
23
80-20 When a miner has a starting base loss
24
(1)
A
starting base loss arises for a mining project interest for an
25
*
MRRT year if at the same time during the year, the same miner:
26
(a) has the mining project interest; and
27
(b)
*
holds a
*
starting base asset relating to the mining project
28
interest.
29
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 80
Starting base allowances
Section 80-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
72 Minerals Resource Rent Tax Bill 2011 No. , 2011
(2)
The
*
starting base loss ceases to be a starting base loss if it has
1
been fully applied in working out one or more
*
starting base
2
allowances for the mining project interest.
3
Subdivision 80-C--Starting base assets
4
Table of sections
5
80-25 Meaning
of
starting base asset
6
80-30
Treating starting base assets as a single starting base asset
7
80-35
Mine development expenditure may be a starting base asset
8
80-25 Meaning of starting base asset
9
(1) Property, or a legal or equitable right that is not property, is a
10
starting base asset relating to a mining project interest if at the
11
time mentioned in subsection (2), the property or right was:
12
(a) being used; or
13
(b)
*
installed ready for use; or
14
(c) being constructed for use;
15
in carrying on
*
upstream mining operations relating to a mining
16
project interest that a miner had at that time.
17
Note:
Division 165 provides for a starting base adjustment if a starting base
18
asset ceases to be used, or installed ready for use, in a project, or
19
construction of the asset stops.
20
(2) The time (start time) is the later of:
21
(a) the start of 1 July 2012; and
22
(b) the start of the day on which production (other than
23
incidental production) of
*
taxable resources commences from
24
the
*
project area for the mining project interest.
25
(3)
However:
26
(a) if, under Division 85, the book value approach is the
27
valuation approach for the mining project interest, the
28
following are not starting base assets:
29
(i) rights and interests constituting the mining project
30
interest;
31
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Starting base allowances Division 80
Section 80-30
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 73
(ii)
*
mining, quarrying or prospecting information, or rights
1
to such information;
2
(iii)
goodwill;
and
3
(b) property, or a legal or equitable right, is not, and is taken
4
never to have been, a starting base asset if:
5
(i) the miner has not made a valid choice under
6
section 85-5 specifying the valuation approach for the
7
mining project interest; or
8
(ii) the miner fails to give the Commissioner a valid
9
*
starting base return that covers the property or right.
10
(4) If, under Division 85, the market value approach is the valuation
11
approach for the mining project interest:
12
(a)
treat
any
*
mining, quarrying or prospecting information, or
13
any rights to such information, as property, or a legal or
14
equitable right, for the purposes of subsection (1); and
15
(b) treat any improvement to land in the
*
project area for the
16
mining project interest as satisfying the requirements of that
17
subsection at the time mentioned in subsection (2) if:
18
(i) the improvement was consumed or destroyed in
19
carrying on
*
upstream mining operations relating to the
20
mining project interest; and
21
(ii) the consumption or destruction happened after 1 May
22
2010 but before that time.
23
(5) Subject to section 80-30, this Part applies to any improvement to,
24
or any fixture on, land as if it were an asset separate from the land,
25
whether the improvement or fixture is removable or not.
26
80-30 Treating starting base assets as a single starting base asset
27
(1) If, under Division 85, the market value approach is the valuation
28
approach for a mining project interest, treat as a single
*
starting
29
base asset any 2 or more of the following that would (apart from
30
this subsection) be starting base assets relating to the mining
31
project interest:
32
(a) rights and interests that constitute the mining project interest;
33
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 80
Starting base allowances
Section 80-35
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
74 Minerals Resource Rent Tax Bill 2011 No. , 2011
(b)
any
*
mining, quarrying or prospecting information, or rights
1
to such information, relating to those rights and interests;
2
(c) goodwill relating to those rights and interests;
3
(d) any improvement to land (but not a fixture) in the
*
project
4
area for the mining project interest.
5
(2)
However,
if:
6
(a) the mining project interest is, because of section 115-10, a
7
combined interest; and
8
(b) a constituent interest (as mentioned in that section) of the
9
combined interest forms part of the combined interest only
10
because a valid choice has been made under section 255-20
11
(downstream integration);
12
section 80-25 and subsection (1) of this section apply to the
13
constituent interest as if it were a separate mining project interest,
14
and applies to the combined interest as if it did not include the
15
constituent interest.
16
80-35 Mine development expenditure may be a starting base asset
17
(1)
*
Mine development expenditure is taken to be a starting base asset
18
relating to a mining project interest if it:
19
(a) was incurred during the period between 2 May 2010 and
20
30 June 2012; and
21
(b) was incurred by a miner:
22
(i) in relation to that mining project interest; or
23
(ii) in relation to a
*
pre-mining project interest from which
24
that mining project interest
*
originated; and
25
(c)
is
not
*
interim expenditure relating to property or a right that
26
is a starting base asset because of section 80-25.
27
(2) While a miner
*
holds the
*
starting base asset, it is taken, for the
28
purposes of subsections 80-40(3) and (4), to be used for the
29
purpose of carrying on
*
upstream mining operations for the mining
30
project interest.
31
Note:
For when a miner holds a starting base asset that is mine development
32
expenditure, see subsection 250-10(2).
33
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Starting base allowances Division 80
Section 80-40
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 75
(3)
Mine development expenditure is expenditure that:
1
(a) is incurred in carrying on
*
upstream mining operations
2
relating to a mining project interest or
*
pre-mining project
3
operations relating to a
*
pre-mining project interest; and
4
(b) relates to developing the
*
project area for the interest for the
5
purposes of extracting
*
taxable resources from the area,
6
including expenditure incurred in:
7
(i) removing overburden from the area or a part of the area;
8
and
9
(ii) excavating a pit in the area; and
10
(iii) sinking a mineshaft in the area.
11
Note:
This section allows mine development expenditure to be taken into
12
account in a miner's starting base even though it is not related to
13
another starting base asset.
14
In working out its decline in value under Division 90, the expenditure
15
is added to the base value of the "asset" as interim expenditure.
16
Subdivision 80-D--Amounts of starting base losses
17
Table of sections
18
80-40
Starting base losses for the MRRT years in which they arise
19
80-45
Starting base losses for later MRRT years
20
80-50
Mining project interests originating from pre-mining project interests with
21
different valuation approaches
22
80-40 Starting base losses for the MRRT years in which they arise
23
(1)
In
the
*
MRRT year in which a
*
starting base loss arises, the
24
amount of the starting base loss is the sum of the declines in value,
25
for the year, of all the
*
starting base assets that:
26
(a) relate to the mining project interest for which the starting
27
base loss arises; and
28
(b)
were
*
held, for any time during the year, by a miner that had
29
the mining project interest during the year.
30
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 80
Starting base allowances
Section 80-40
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
76 Minerals Resource Rent Tax Bill 2011 No. , 2011
(2) However, the amount is reduced by the sum of all the reductions (if
1
any) required by subsections (3) and (4) in relation to any of those
2
*
starting base assets for the year.
3
Use etc. that is not related to upstream mining operations
4
(3) Reduce the amount under subsection (1) relating to a
*
starting base
5
asset, to the extent (if any) that, during the
*
starting base days, the
6
asset was:
7
(a)
used;
or
8
(b)
*
installed ready for use; or
9
(c) being constructed for use;
10
for a purpose other than carrying on
*
upstream mining operations
11
relating to the mining project interest.
12
Use etc. that is not related to mining expenditure
13
(4) Reduce the amount under subsection (1) relating to a
*
starting base
14
asset (or, if that amount is reduced under subsection (3), that
15
amount as so reduced) to the extent (if any) that:
16
(a)
during
the
*
starting base days, the asset was:
17
(i)
used;
or
18
(ii)
*
installed ready for use; or
19
(iii) being constructed for use;
20
for carrying on
*
upstream mining operations relating to the
21
mining project interest; but
22
(b) that amount would have been
*
excluded expenditure if it had
23
been an amount of expenditure that the miner incurred.
24
(5) However, subsection (4) does not apply if:
25
(a) under Division 85, the market value approach is the valuation
26
approach for the mining project interest; and
27
(b) the amount would have been
*
excluded expenditure only
28
because of section 35-35 (cost of acquiring rights and
29
interests in projects).
30
Note:
Subsection (5) ensures that a decline in value of a mining project
31
interest or an interest in the mining project interest is not reduced
32
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Starting base allowances Division 80
Section 80-45
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 77
under the market value approach, even though expenditure incurred in
1
acquiring the interest is excluded expenditure under Division 35.
2
Starting base days
3
(6)
The
starting base days in relation to a
*
starting base asset are the
4
days, during the
*
MRRT year but on or after the
*
start time for the
5
asset:
6
(a) on which a miner both
*
held the asset and had the mining
7
project interest; and
8
(b) on which the asset was, for any purpose:
9
(i)
used;
or
10
(ii)
*
installed ready for use; or
11
(iii) being constructed for use.
12
(7)
However:
13
(a)
if
a
*
starting base adjustment event for the asset happens
14
during the
*
MRRT year--any days in the MRRT year after
15
that event are not starting base days relating to the asset; and
16
(b) any days after the
*
termination day for the mining project
17
interest are not starting base days relating to the asset.
18
80-45 Starting base losses for later MRRT years
19
(1) In a later
*
MRRT year, the amount of the
*
starting base loss is:
20
Previous
Previous
starting
application
Uplift factor
base loss
of the amount
-
×
21
where:
22
previous application of the amount is the sum of the parts (if any)
23
of the
*
starting base loss that have been applied in working out, for
24
the preceding
*
MRRT year, a
*
starting base allowance for the
25
mining project interest.
26
previous starting base loss is the
*
starting base loss for the
27
preceding
*
MRRT year.
28
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 80
Starting base allowances
Section 80-50
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
78 Minerals Resource Rent Tax Bill 2011 No. , 2011
uplift factor is one of the following:
1
(a) if, under Division 85, the book value approach is the
2
valuation approach for the mining project interest:
3
*Long term bond rate for
1.07
the preceding *MRRT year +
4
(b) if, under Division 85, the market value approach is the
5
valuation approach for the mining project interest:
6
Sum of the *index numbers for the
quarters in the year ending on 31 March
just before the start of the *MRRT year
Sum of the *index numbers for the
quarters in the year ending on the
previous 31 March
7
(2) The amount worked out under paragraph (b) of the definition of
8
uplift factor in subsection (1) is to be worked out to 3 decimal
9
places (rounding up if the fourth decimal place is 5 or more).
10
80-50 Mining project interests originating from pre-mining project
11
interests with different valuation approaches
12
(1) If a mining project interest
*
originates from 2 or more
*
pre-mining
13
project interests, and those that have a valuation approach under
14
Division 85 do not all have the same valuation approach:
15
(a) in the circumstances mentioned in subsection (2), there are 2
16
*
starting base losses, for the mining project interest for the
17
same
*
MRRT year, of the amounts provided in
18
subsection (3); and
19
(b) in working out the amount of a
*
starting base allowance for
20
the mining project interest for an MRRT year, the starting
21
base losses for the mining project interest in the year are to
22
be applied in the order specified in subsection (4); and
23
(c) in working out under Division 90 the decline in value of any
24
*
starting base asset during an MRRT year, assume that the
25
applicable valuation approach is the valuation approach
26
specified under subsection (5).
27
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Starting base allowances Division 80
Section 80-50
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 79
(2)
There
are
2
*
starting base losses, for the mining project interest for
1
the same
*
MRRT year, if, for the year:
2
(a) there would have been a starting base loss (the book value
3
starting base loss) for the mining project interest for that
4
MRRT year if it had
*
originated only from the
*
pre-mining
5
project interests for which the book value approach is the
6
valuation approach under Division 85; and
7
(b) there would have been another starting base loss (the market
8
value starting base loss) for the mining project interest for
9
that MRRT year if it had originated only from the pre-mining
10
project interests for which the market value approach is the
11
valuation approach under Division 85.
12
(3) The amounts of those 2
*
starting base losses are the book value
13
starting base loss and the market value starting base loss.
14
(4) Despite subsection 80-15(2), the order for applying the
*
starting
15
base losses for the mining project interest for the year is:
16
(a) the book value starting base loss; then
17
(b) the market value starting base loss.
18
(5) The valuation approach is:
19
(a) the book value approach if the asset relates to a
*
pre-mining
20
project interest for which the book value approach is the
21
valuation approach under Division 85; or
22
(b) the market value approach if the asset relates to a pre-mining
23
project interest for which the market value approach is the
24
valuation approach under Division 85.
25
26
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 85
Valuation approaches
Section 85-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
80 Minerals Resource Rent Tax Bill 2011 No. , 2011
Division 85--Valuation approaches
1
Guide to Division 85
2
85-1 What this Division is about
3
The 2 valuation approaches are the book value approach and the
4
market value approach.
5
An entity can choose which valuation approach to apply to all of its
6
starting base assets relating to a mining project interest (or a
7
pre-mining project interest).
8
Note:
In some limited cases in which the market value approach would
9
otherwise apply, a look-back approach to valuation can be chosen: see
10
Division 180.
11
Table of sections
12
Operative provisions
13
85-5
Choosing a valuation approach
14
85-10
Restriction on specifying the book value approach
15
85-15
The valuation approach for a mining project interest
16
Operative provisions
17
85-5 Choosing a valuation approach
18
(1)
An
*
entity may choose which valuation approach to apply to all
19
*
starting base assets (and all property or rights that are expected to
20
be starting base assets after the time mentioned in subsection
21
80-25(2)) that the entity
*
holds that relate to:
22
(a) a mining project interest that the entity has; or
23
(b)
a
*
pre-mining project interest that the entity holds.
24
Note:
Division 119 in Schedule 1 to the Taxation Administration Act 1953 is
25
about choices under the MRRT law.
26
(2) The choice must specify whether the
*
entity has chosen:
27
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Valuation approaches Division 85
Section 85-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 81
(a) the book value approach; or
1
(b) the market value approach.
2
(3) The choice is not valid unless notice of the choice is given in the
3
*
starting base return relating to the mining project interest or
4
*
pre-mining project interest.
5
(4) The choice may specify that it applies to every mining project
6
interest or
*
pre-mining project interest that the
*
entity has that
7
relates to a specified area.
8
(5) The choice applies, in relation to the mining project interest or
9
*
pre-mining project interest, to the first
*
MRRT year and all later
10
MRRT years.
11
85-10 Restriction on specifying the book value approach
12
(1) The choice cannot specify the book value approach unless:
13
(a) during the 18 months preceding 2 May 2010, an
*
entity that
14
had the mining project interest, or
*
held the
*
pre-mining
15
project interest, in that period prepared a financial report
16
relating to the interest in accordance with
*
accounting
17
standards; and
18
(b) the report relates to a financial period that ended in the 18
19
months preceding 2 May 2010; and
20
(c) the report has been audited in accordance with
*
auditing
21
standards.
22
(2) If, during the 18 months preceding 2 May 2010, the
*
entity was a
23
part of a consolidated entity (within the meaning of the
24
Corporations Act 2001), for the purposes of paragraph (1)(a), treat
25
any financial report for the consolidated entity, relating to the
26
mining project interest, as a report that the entity prepared.
27
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 85
Valuation approaches
Section 85-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
82 Minerals Resource Rent Tax Bill 2011 No. , 2011
85-15 The valuation approach for a mining project interest
1
The valuation approach, for a mining project interest that an
*
entity
2
has, is the approach specified in the choice under section 85-5
3
relating to:
4
(a) the mining project interest; or
5
(b)
a
*
pre-mining project interest from which the mining project
6
interest
*
originates.
7
Note 1:
For mining project interests that originate from pre-mining project
8
interests that have different valuation approaches, see section 80-50.
9
Note 2:
For combined mining project interests in which constituent interests
10
have different valuation approaches, see section 115-50.
11
12
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Declines in value of starting base assets Division 90
Section 90-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 83
Division 90--Declines in value of starting base assets
1
Table of Subdivisions
2
Guide to Division 90
3
90-A
How to work out the decline in value of a starting base asset
4
90-B
Base values under the book value approach
5
90-C
Base values under the market value approach
6
90-D Miscellaneous
7
Guide to Division 90
8
90-1 What this Division is about
9
The decline in value of a starting base asset during an MRRT year
10
counts towards the miner's starting base loss for a mining project
11
interest for the year.
12
Under the book value approach, the base value of a starting base
13
asset includes its value in the most recent financial report before
14
2 May 2010. Under the market value approach, the base value
15
includes its market value as at 1 May 2010. Under either approach,
16
the base value may also include expenditure incurred before 1 July
17
2012.
18
Under the book value approach, an uplift factor, based on the long
19
term bond rate plus 7%, is applied to components of the asset's
20
base value. Under the market value approach, an uplift factor is not
21
applied.
22
Subdivision 90-A--How to work out the decline in value of a
23
starting base asset
24
Table of sections
25
90-5
How to work out the decline in value of a starting base asset
26
90-10
Write off rates under the book value approach
27
90-15
Write off rates under the market value approach
28
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 90
Declines in value of starting base assets
Section 90-5
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
84 Minerals Resource Rent Tax Bill 2011 No. , 2011
90-5 How to work out the decline in value of a starting base asset
1
(1) The decline in value of a
*
starting base asset, relating to a mining
2
project interest, during an
*
MRRT year is as follows:
3
Number of
starting base days
Base value
Write off rate
365
×
×
4
where:
5
base value is the base value of the asset for that year worked out
6
under whichever of the following is applicable:
7
(a) Subdivision 90-B (book value approach);
8
(b) Subdivision 90-C (market value approach);
9
(c) section 165-60 (use etc. of starting base assets after starting
10
base adjustment events).
11
However, the base value may be reduced under section 90-60
12
(partial disposal) or section 90-65 (recoupment).
13
number of starting base days is the number of
*
starting base days,
14
in relation to the
*
starting base asset, during the
*
MRRT year.
15
write off rate is the write off rate under section 90-10 or 90-15
16
(whichever is applicable) for the asset for the year.
17
(2) The decline in value during an
*
MRRT year cannot be more than
18
the asset's
*
base value for that year.
19
90-10 Write off rates under the book value approach
20
If, under Division 85, the book value approach is the valuation
21
approach for the mining project interest, the write off rate of the
22
*
starting base asset for an
*
MRRT year is:
23
24
Write off rates under the book value approach
Item
For this
*
MRRT year
The write off rate is:
1
the
*
MRRT year in which the
*
start time
for the asset happens
36%
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Declines in value of starting base assets Division 90
Section 90-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 85
Write off rates under the book value approach
Item
For this
*
MRRT year
The write off rate is:
2
the first
*
MRRT year commencing after
the
*
start time
37.5%
3
the second
*
MRRT year commencing after
the
*
start time
37.5%
4
the third
*
MRRT year commencing after
the
*
start time
60%
5
the fourth
*
MRRT year commencing after
the
*
start time
100%
1
90-15 Write off rates under the market value approach
2
(1) If, under Division 85, the market value approach is the valuation
3
approach for the mining project interest, the write off rate of the
4
*
starting base asset for each
*
MRRT year is as follows:
5
100%
Remaining effective life of the asset
6
where:
7
remaining effective life is:
8
(a) if the asset is a
*
depreciating asset--the shortest of the
9
following:
10
(i) the unelapsed part, as at the start of the
*
MRRT year, of
11
what was the asset's
*
effective life worked out as at its
12
*
start time;
13
(ii) the unelapsed part, as at the start of the MRRT year, of
14
the longest effective life, worked out as at its start time,
15
of any right or interest that is
*
held by the miner holding
16
the
*
starting base asset and that constitutes the whole or
17
part of the mining project interest;
18
(iii) the number of years specified in subsection (2); or
19
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 90
Declines in value of starting base assets
Section 90-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
86 Minerals Resource Rent Tax Bill 2011 No. , 2011
(b) if the asset is not a depreciating asset--the shorter of the
1
following:
2
(i) the unelapsed part, as at the start of the MRRT year, of
3
the longest effective life, worked out as at its start time,
4
of any right or interest that is held by the miner holding
5
the starting base asset and that constitutes the whole or
6
part of the mining project interest;
7
(ii) the number of years specified in subsection (2).
8
(2) The number of years is the number of years (including parts of
9
years) between:
10
(a) the start of the
*
MRRT year; and
11
(b) 1 July 2037.
12
However, if the MRRT year starts after 30 June 2036, the number
13
of years is one.
14
(3) If the asset is an asset that is treated as a single
*
starting base asset
15
because of section 80-30, for the purposes of the definition of
16
remaining effective life in subsection (1):
17
(a) treat the asset as a
*
depreciating asset, unless none of the
18
*
constituent assets of the single starting base asset are
19
depreciating assets; and
20
(b) treat the single starting base asset's
*
effective life, at its
*
start
21
time, as the longest effective life, worked out as at that time,
22
of any of the constituent assets that are depreciating assets.
23
(4) For the purpose of working out the
*
effective life of a
*
starting base
24
asset as at its
*
start time:
25
(a) the miner may make the choices for the purposes of this
26
section; and
27
(b) the Commissioner may make the decisions for the purposes
28
of this section;
29
that the miner or Commissioner could have made under
30
Division 40 of the Income Tax Assessment Act 1997, relating to
31
working out the effective life of the asset under that Division.
32
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Declines in value of starting base assets Division 90
Section 90-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 87
Subdivision 90-B--Base values under the book value approach
1
Table of sections
2
90-20
Application of this Subdivision
3
90-25
Initial base value
4
90-30
Later base values
5
90-20 Application of this Subdivision
6
This Subdivision applies to a
*
starting base asset relating to a
7
mining project interest if, under Division 85, the book value
8
approach is the valuation approach for mining project interest.
9
Note:
A base value for an MRRT year during which the asset "rejoins" the
10
starting base after a starting base adjustment event happened is
11
worked out under section 165-60.
12
90-25 Initial base value
13
Working out the initial base value of a starting base asset
14
(1)
The
base value of the
*
starting base asset, for the
*
MRRT year in
15
which the
*
start time for the asset happens, is:
16
(a) if at all times between 2 May 2010 and 30 June 2012 the
17
*
entity that
*
held it also had the mining project interest (or
18
held the
*
pre-mining project interest from which the mining
19
project interest
*
originated), and subsection (2) applies to the
20
mining project interest--the sum of:
21
(i) the initial book value of the asset under subsection (3)
22
or (4) (whichever is applicable); and
23
(ii) the sum of the valuation amounts under subsection (6)
24
for amounts of
*
interim expenditure incurred in relation
25
to the asset (other than amounts of interim expenditure
26
incurred in relation to acquiring or bringing into
27
existence another starting base asset); or
28
(b) if paragraph (a) does not apply--the sum of the valuation
29
amounts under subsection (6) for amounts of interim
30
expenditure in relation to the asset.
31
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 90
Declines in value of starting base assets
Section 90-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
88 Minerals Resource Rent Tax Bill 2011 No. , 2011
(2) This subsection applies to a mining project interest if:
1
(a) the mining project interest existed (or is a part of a mining
2
project interest that existed) just before 2 May 2010; or
3
(b) the mining project interest
*
originates from a
*
pre-mining
4
project interest that existed (or that is a part of a pre-mining
5
project interest that existed) just before 2 May 2010.
6
Initial book value of a starting base asset
7
(3)
If:
8
(a) the value of the asset is recorded in the accounts from which
9
the most recent audited financial report before 2 May 2010
10
was prepared; and
11
(b) the financial report relates to a financial period that ended in
12
the 18 months preceding that day;
13
the initial book value of the asset is as follows:
14
n
Long term bond
Accepted value
rate for the initial
1.07
valuation period
×
+
15
where:
16
accepted value is:
17
(a) the value recorded in those accounts, unless paragraph (b)
18
applies; or
19
(b) if that value is inconsistent with an auditor's report on the
20
financial report--a value that is consistent with the auditor's
21
report.
22
long term bond rate for the initial valuation period is the
*
long
23
term bond rate for the initial valuation period under subsection (5).
24
n is the number of days in the initial valuation period, divided by
25
365.
26
(4) Despite subsection (3), the initial book value of the asset is zero if
27
the value of the asset is not recorded as mentioned in
28
subsection (3).
29
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Declines in value of starting base assets Division 90
Section 90-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 89
Note:
If the asset is mine development expenditure, it will not have an initial
1
book value.
2
Initial valuation period for a starting base asset
3
(5) The initial valuation period for the asset is the period:
4
(a)
starting:
5
(i) on the date of the most recent audited financial report,
6
prepared before 2 May 2010, from the accounts in
7
which the value of the asset is recorded, unless
8
subparagraph (ii) of this paragraph applies; or
9
(ii) if the value of the asset recorded in those accounts is
10
inconsistent with an auditor's report on the financial
11
report--on the date of the auditor's report; and
12
(b) ending at the end of the
*
MRRT year in which the
*
start time
13
for the asset happens.
14
Valuation amounts for interim expenditure
15
(6)
If
the
*
entity that
*
held the asset incurred an amount of
*
interim
16
expenditure relating to the asset, the valuation amount for the
17
amount of interim expenditure in relation to the asset is:
18
*
n
Long term bond
Amount of the
rate for the interim
1.07
interim expenditure
valuation period
×
+
19
where:
20
long term bond rate for the interim valuation period is the
*
long
21
term bond rate for the interim valuation period under
22
subsection (7).
23
n is the number of days in the interim valuation period, divided by
24
365.
25
Interim valuation period for interim expenditure
26
(7) The interim valuation period for an amount of
*
interim expenditure
27
is the period:
28
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 90
Declines in value of starting base assets
Section 90-30
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
90 Minerals Resource Rent Tax Bill 2011 No. , 2011
(a) starting on the day on which the
*
entity incurred the amount;
1
and
2
(b) ending at the end of the
*
MRRT year in which the
*
start time
3
for the asset happens.
4
90-30 Later base values
5
The
base value of the
*
starting base asset, for an
*
MRRT year that
6
is after the MRRT year in which the
*
start time for the asset
7
happens, is:
8
Preceding
Preceding
decline in
Uplift factor
base value
value
-
×
9
where:
10
preceding base value is the base value of the asset for the
11
preceding
*
MRRT year.
12
preceding decline in value is the decline in value of the asset,
13
worked out under section 90-5, for the preceding
*
MRRT year.
14
uplift factor is:
15
*
*
Long term bond rate for the preceding MRRT year
1.07
+
16
Subdivision 90-C--Base values under the market value
17
approach
18
Table of sections
19
90-35
Application of this Subdivision
20
90-40
Initial base value
21
90-45
Mining project interest originating from pre-mining project interests etc.
22
90-50
Later base values
23
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Declines in value of starting base assets Division 90
Section 90-35
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 91
90-35 Application of this Subdivision
1
This Subdivision applies to a
*
starting base asset relating to a
2
mining project interest if, under Division 85, the market value
3
approach is the valuation approach for the mining project interest.
4
Note:
A base value for an MRRT year during which the asset "rejoins" the
5
starting base after a starting base adjustment event happened is
6
worked out under section 165-60.
7
90-40 Initial base value
8
(1)
The
base value of the
*
starting base asset, for the
*
MRRT year in
9
which the
*
start time for the asset happens, is:
10
(a) if at all times between 2 May 2010 and 30 June 2012 the
11
*
entity that
*
held it also had the mining project interest (or
12
held the
*
pre-mining project interest from which the mining
13
project interest
*
originated), and subsection (2) applies to the
14
mining project interest--the sum of:
15
(i)
the
*
market value of the asset on 1 May 2010; and
16
(ii) the sum of the amounts of
*
interim expenditure incurred
17
in relation to the asset (other than amounts of interim
18
expenditure incurred in relation to acquiring or bringing
19
into existence another starting base asset); or
20
(b) if paragraph (a) does not apply--the sum of the amounts of
21
interim expenditure incurred in relation to the asset.
22
Note 1:
Division 180 allows a "look-back" approach to valuation to be chosen
23
in some cases.
24
Note 2:
If the asset is mine development expenditure, its market value on
25
1 May 2010 will be zero.
26
(2) This subsection applies to a mining project interest if:
27
(a) the mining project interest existed (or is a part of a mining
28
project interest that existed) just before 2 May 2010; or
29
(b) the mining project interest
*
originates from a
*
pre-mining
30
project interest that existed, or that is a part of a pre-mining
31
project interest that existed, just before 2 May 2010.
32
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 90
Declines in value of starting base assets
Section 90-45
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
92 Minerals Resource Rent Tax Bill 2011 No. , 2011
(3) In working out the
*
market value of an asset that is treated as a
1
single
*
starting base asset because of section 80-30, disregard any
2
liability of the
*
entity to pay any
*
private mining royalty to the
3
extent that:
4
(a) the royalty relates to
*
taxable resources extracted from the
5
*
project area for the mining project interest, or for a
6
*
pre-mining project interest from which the mining project
7
interest
*
originates; and
8
(b) subsection 35-40(3) does not apply to the royalty.
9
Note:
Subsection 35-40(3) provides that private mining royalties paid under
10
a pre-2 May 2010 arrangement are not covered by the rule that private
11
mining royalties are excluded expenditure.
12
90-45 Mining project interest originating from pre-mining project
13
interests etc.
14
(1) For the purpose of working out under section 90-40 the
*
base value
15
of a
*
starting base asset, relating to a mining project interest, for
16
the
*
MRRT year in which the
*
start time for the asset happens, if:
17
(a) the asset is, or includes, the rights and interests that constitute
18
the mining project interest; and
19
(b) the mining project interest did not exist on 1 May 2010; and
20
(c) the mining project interest
*
originates from one or more
21
*
pre-mining project interests, or one or more parts of
22
pre-mining project interests, that existed just before 2 May
23
2010;
24
assume that the
*
market value of the asset on 1 May 2010 was an
25
amount equal to the market value, on that day, of the rights and
26
interests that constitute the pre-mining project interest or
27
pre-mining project interests, or the part or parts, from which the
28
mining project interest originates.
29
(2) However, this section does not apply if the
*
entity has made a
30
choice under section 180-5 (look-back approach) relating to the
31
mining project interest.
32
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Declines in value of starting base assets Division 90
Section 90-50
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 93
90-50 Later base values
1
The
base value of the
*
starting base asset, for an
*
MRRT year that
2
is not the MRRT year in which the
*
start time for the asset
3
happens, is an amount equal to the difference between:
4
(a) the base value of the asset for the preceding MRRT year; and
5
(b) the decline in value of the asset, worked out under
6
section 90-5, for the preceding MRRT year.
7
Subdivision 90-D--Miscellaneous
8
Table of sections
9
90-55 Meaning
of
interim expenditure
10
90-60
Partial disposal of a starting base asset before the start time
11
90-65
Recoupment of the value of a starting base asset
12
90-55 Meaning of interim expenditure
13
General interim expenditure
14
(1) An amount that an
*
entity incurs in relation to a
*
starting base asset
15
that the entity
*
holds in relation to a mining project interest
16
(including in relation to acquiring or bringing into existence such
17
an asset) is interim expenditure relating to the asset if:
18
(a)
the
amount:
19
(i) if the starting base asset is a
*
depreciating asset--is
20
included in the cost of the asset under Subdivision 40-C
21
of the Income Tax Assessment Act 1997; or
22
(ii) if the starting base asset is a
*
CGT asset (but not a
23
depreciating asset)--is included in the
*
cost base of the
24
asset; and
25
(b) the entity incurs the amount during the period starting on the
26
day provided under subsection (4) or (5) and ending at the
27
end of 30 June 2012.
28
(2) However, if the
*
starting base asset is a
*
CGT asset (but not a
29
*
depreciating asset), treat the amount of the
*
interim expenditure as
30
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 90
Declines in value of starting base assets
Section 90-55
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
94 Minerals Resource Rent Tax Bill 2011 No. , 2011
not including any part of the amount that consists of the third
1
element of the
*
cost base under subsection 110-25(4) of the Income
2
Tax Assessment Act 1997.
3
(3) Subsections (1) and (2) apply to a
*
starting base asset that is treated
4
as a single
*
starting base asset because of section 80-30 or
5
subsection 180-10(3) to the extent that they would apply to the
6
*
constituent assets of the single starting base asset if the constituent
7
assets were starting base assets.
8
Start of the expenditure period
9
(4) If, under Division 85, the book value approach is the valuation
10
approach for the mining project interest, the period starts:
11
(a)
if
the
*
entity
*
held the asset at all times from the start of
12
2 May 2010 until the end of 30 June 2012--on the date of the
13
financial report mentioned in paragraph 90-25(3)(a) in
14
relation to the accounts in which the value of the asset is
15
recorded; or
16
(b) otherwise--on the first day, before the end of 30 June 2012,
17
from which the entity held the asset at all times until the end
18
of 30 June 2012.
19
Example: A miner bought an asset on 1 January 2011 and sold it on 1 May 2011.
20
The miner bought the asset again on 1 June 2011 and still held it at the
21
end of 30 June 2012.
22
The expenditure incurred in buying the asset the first time (on
23
1 January 2011) is not interim expenditure, because the miner did not
24
hold the asset until the end of 30 June 2012, as required by
25
paragraph (4)(b).
26
The expenditure incurred in buying the asset the second time (on
27
1 June 2011) is interim expenditure (if it is covered by
28
paragraph (1)(a)), because the miner held the asset until the end of
29
30 June 2012.
30
(5) If, under Division 85, the market value approach is the valuation
31
approach for the mining project interest, the period starts:
32
(a)
if
the
*
entity
*
held the asset at all times from the start of
33
2 May 2010 until the end of 30 June 2012--on 2 May 2010;
34
or
35
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Declines in value of starting base assets Division 90
Section 90-60
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 95
(b) otherwise--on the first day, before the end of 30 June 2012,
1
from which the entity held the asset at all times until the end
2
of 30 June 2012.
3
Mine development expenditure as interim expenditure
4
(6) An amount that an
*
entity incurs in relation to a mining project
5
interest is interim expenditure if the amount is
*
mine development
6
expenditure to which subsection (1) does not apply.
7
(7) To avoid doubt,
*
mine development expenditure that is
*
interim
8
expenditure cannot also be interim expenditure relating to another
9
amount of mine development expenditure.
10
Excluded expenditure
11
(8) Despite subsections (1) and (6), the amount is not interim
12
expenditure to the extent (if any) that the amount would have been
13
*
excluded expenditure if it had been incurred after 1 July 2012.
14
90-60 Partial disposal of a starting base asset before the start time
15
(1)
The
base value of a
*
starting base asset, relating to a mining
16
project interest that a miner has, for the
*
MRRT year in which the
17
*
start time for the asset happens, is reduced to the extent (if any)
18
that any of the miner's interest in the asset is disposed of during the
19
period:
20
(a) starting on the day provided under subsection (2); and
21
(b) ending just before the start time for the asset.
22
(2) The period starts:
23
(a) if, under Division 85, the book value approach is the
24
valuation approach for the mining project interest--on the
25
date of the financial report mentioned in paragraph
26
90-25(3)(a) in relation to the accounts in which the value of
27
the asset is recorded; or
28
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 90
Declines in value of starting base assets
Section 90-65
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
96 Minerals Resource Rent Tax Bill 2011 No. , 2011
(b) if, under Division 85, the market value approach is the
1
valuation approach for the mining project interest--on 2 May
2
2010.
3
(3) Treat, for the purposes of this section, as a disposal of part of the
4
miner's interest in the
*
starting base asset an
*
arrangement that has
5
the effect of transferring to another
*
entity part of the benefits or
6
entitlements that the miner has in relation to the asset.
7
90-65 Recoupment of the value of a starting base asset
8
Reducing the base value
9
(1)
The
base value of the
*
starting base asset for an
*
MRRT year is
10
reduced to the extent (if any) that:
11
(a) an amount is received, or becomes receivable, by the miner
12
that has the mining project interest to which the asset relates:
13
(i) if the year is the MRRT year in which the
*
start time for
14
the asset happens--during the period starting on the day
15
provided under subsection (2) and ending just before the
16
end of that year; or
17
(ii) in any other case--during the year; and
18
(b) payment of the amount has, or would have, the purpose or
19
effect of
*
recouping or offsetting some or all of what would
20
(apart from this subsection) be the asset's base value; and
21
(c) the amount does not relate to a
*
starting base adjustment
22
event for the asset; and
23
(d) the amount is not taken into account through a reduction
24
under section 90-60.
25
(2) The period starts:
26
(a) if, under Division 85, the book value approach is the
27
valuation approach for the mining project interest--on the
28
date of the financial report mentioned in paragraph
29
90-25(3)(a) in relation to the accounts in which the value of
30
the asset is recorded; or
31
MRRT allowances Chapter 3
Starting base allowances Part 3-5
Declines in value of starting base assets Division 90
Section 90-65
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 97
(b) if, under Division 85, the market value approach is the
1
valuation approach for the mining project interest--on 2 May
2
2010.
3
(3) However, subsection (1) does not apply to the extent that:
4
(a)
the
*
starting base asset is or includes the rights and interests
5
that constitute a mining project interest; and
6
(b) the amount mentioned in paragraph (1)(a) relates to disposal
7
of any of those rights and interests.
8
Including amounts in mining revenue
9
(4) If what would otherwise be the amount of the reduction under
10
subsection (1) exceeds what would (apart from that subsection) be
11
the
*
base value of the
*
starting base asset, the amount of the excess
12
is included in the miner's
*
mining revenue for the
*
MRRT year.
13
(5) However, if there have been reductions to a
*
starting base loss, for
14
that
*
MRRT year or an earlier MRRT year, under subsection
15
80-40(3) or (4) relating to the
*
starting base asset, the amount
16
included in the miner's
*
mining revenue under subsection (4) is
17
reduced by the following:
18
Sum of reductions
Excess amount
Total decline
×
19
where:
20
excess amount is the amount of the excess mentioned in
21
subsection (4).
22
sum of reductions is the sum of the reductions made relating to the
23
asset under subsections 80-40(3) and (4) during that
*
MRRT year
24
or any earlier MRRT year.
25
total decline is the sum of the declines in value of the asset that
26
have happened during that
*
MRRT year or any earlier MRRT year.
27
Note:
Reductions happen under subsection 80-40(3) or (4) if the asset is
28
used, installed for use, or constructed for use for a purpose other than
29
Chapter 3
MRRT allowances
Part 3-5
Starting base allowances
Division 90
Declines in value of starting base assets
Section 90-65
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
98 Minerals Resource Rent Tax Bill 2011 No. , 2011
carrying on upstream mining operations relating to the mining project
1
interest, or in connection with excluded expenditure.
2
3
MRRT allowances Chapter 3
Transferred pre-mining loss allowances Part 3-6
Transferred pre-mining loss allowances Division 95
Section 95-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 99
Part 3-6--Transferred pre-mining loss allowances
1
Division 95--Transferred pre-mining loss allowances
2
Guide to Division 95
3
95-1 What this Division is about
4
Transferred pre-mining loss allowances enable a miner's MRRT
5
liability for a mining project interest for an MRRT year to be
6
reduced by pre-mining losses relating to certain other pre-mining
7
project interests that the miner has, or that a closely associated
8
entity has.
9
Table of sections
10
Operative provisions
11
95-5
Object of this Division
12
95-10
When a miner has a transferred pre-mining loss allowance
13
95-15
The amount of a transferred pre-mining loss allowance
14
95-20
Available pre-mining losses for a transferred pre-mining loss allowance
15
95-25
Cap on available pre-mining losses
16
95-30 The
pre-mining loss cap
17
Operative provisions
18
95-5 Object of this Division
19
The object of this Division is to enable
*
pre-mining losses related
20
to a
*
pre-mining project interest to be transferred to mining project
21
interests that are sufficiently connected to the pre-mining losses
22
(even if the mining project interests did not
*
originate from the
23
pre-mining project interest).
24
Chapter 3
MRRT allowances
Part 3-6
Transferred pre-mining loss allowances
Division 95
Transferred pre-mining loss allowances
Section 95-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
100 Minerals Resource Rent Tax Bill 2011 No. , 2011
95-10 When a miner has a transferred pre-mining loss allowance
1
A miner has a transferred pre-mining loss allowance for a mining
2
project interest for an
*
MRRT year if:
3
(a) there is an amount (a remaining profit) by which the miner's
4
*
mining profit for the mining project interest for the year
5
exceeds the sum of all the
*
higher ranking allowances (if any)
6
that the miner has for the mining project interest for the year;
7
and
8
(b) there are one or more
*
pre-mining losses (available
9
pre-mining losses) that, under section 95-20, can be applied
10
in working out a transferred pre-mining loss allowance for
11
the interest for the year.
12
95-15 The amount of a transferred pre-mining loss allowance
13
(1) The amount of the miner's
*
transferred pre-mining loss allowance
14
is so much of the sum of the available pre-mining losses as does
15
not exceed the remaining profit.
16
(2) In working out the amount of a
*
transferred pre-mining loss
17
allowance,
*
pre-mining losses are applied in the order in which
18
they arise, but the miner may choose the order in which to apply
19
pre-mining losses that arise at the same time.
20
Note:
Division 119 in Schedule 1 to the Taxation Administration Act 1953 is
21
about choices under the MRRT law.
22
95-20 Available pre-mining losses for a transferred pre-mining loss
23
allowance
24
(1)
A
*
pre-mining loss can be applied in working out a
*
transferred
25
pre-mining loss allowance for the mining project interest (the
26
receiving interest) for the year in the circumstances set out in
27
subsection (2) or (3).
28
Note:
Once a pre-mining loss has been fully applied, it ceases to be a
29
pre-mining loss (see subsection 70-30(2)), and therefore cannot be
30
applied in working out a transferred pre-mining loss allowance.
31
MRRT allowances Chapter 3
Transferred pre-mining loss allowances Part 3-6
Transferred pre-mining loss allowances Division 95
Section 95-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 101
Pre-mining project interest in force
1
(2)
The
*
pre-mining loss can be applied if:
2
(a)
the
*
entity that has the
*
pre-mining project interest (the loss
3
project interest) to which the pre-mining loss relates is:
4
(i) the miner; or
5
(ii) another entity that is
*
closely associated with the miner
6
at the end of the year; and
7
(b)
either:
8
(i) both the receiving interest and the loss project interest
9
relate to iron ore; or
10
(ii) both the receiving interest and the loss project interest
11
do not relate to iron ore.
12
Pre-mining project interest replaced by a different mining project
13
interest
14
(3)
The
*
pre-mining loss can be applied if:
15
(a) a mining project interest
*
originates from the
*
pre-mining
16
project interest to which the pre-mining loss relates; and
17
(b)
the
*
entity that has that mining project interest (also the loss
18
project interest) is:
19
(i) the miner; or
20
(ii) another entity that is
*
closely associated with the miner
21
at the end of the year; and
22
(c)
either:
23
(i) both the receiving interest and the loss project interest
24
relate to iron ore; or
25
(ii) both the receiving interest and the loss project interest
26
do not relate to iron ore.
27
Competing applications of a pre-mining loss
28
(4) Despite subsections (2) and (3), the
*
pre-mining loss cannot be
29
applied to the extent that it is applied in working out, for the year:
30
(a)
a
*
pre-mining loss allowance; or
31
Chapter 3
MRRT allowances
Part 3-6
Transferred pre-mining loss allowances
Division 95
Transferred pre-mining loss allowances
Section 95-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
102 Minerals Resource Rent Tax Bill 2011 No. , 2011
(b)
a
*
transferred pre-mining loss allowance;
1
for another mining project interest.
2
Meaning of closely associated
3
(5) A miner is closely associated with another
*
entity at a time if, at
4
that time, they:
5
(a)
are
both
*
members of the same
*
consolidatable group; or
6
(b) would both be members of the same consolidatable group if
7
the otherwise applicable requirements in column 3 of the
8
table in subsection 703-15(2) of the Income Tax Assessment
9
Act 1997 (Australian residence requirements) were
10
disregarded.
11
Note:
The members of a consolidated group are closely associated, since a
12
consolidatable group continues to exist even after the day on and after
13
which the consolidatable group is taken to be consolidated.
14
95-25 Cap on available pre-mining losses
15
(1) Despite section 95-20, a
*
pre-mining loss that could otherwise be
16
applied in working out a
*
transferred pre-mining loss allowance
17
cannot be applied, to the extent the application of the loss would
18
result in:
19
(a) pre-mining losses that count towards the loss project
20
interest's
*
pre-mining loss cap exceeding that cap; or
21
(b) pre-mining losses that count towards the receiving interest's
22
pre-mining loss cap exceeding that cap.
23
(2)
A
*
pre-mining loss that has been, or is to be, applied in working
24
out a
*
transferred pre-mining loss allowance counts towards the
25
*
pre-mining loss cap of an interest if:
26
(a) the interest is the loss project interest or receiving interest for
27
that application of the loss; and
28
(b) the common ownership test in subsection (3) is not met for
29
that application of the loss; and
30
MRRT allowances Chapter 3
Transferred pre-mining loss allowances Part 3-6
Transferred pre-mining loss allowances Division 95
Section 95-30
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 103
(c) the pre-mining loss arose in the
*
MRRT year in which the
1
interest's pre-mining loss cap arose (the cap year), or an
2
earlier year; and
3
(d) the transferred pre-mining loss allowance is for the cap year,
4
or a later year.
5
Common ownership test for transfer of pre-mining losses
6
(3) The common ownership test is met for a
*
pre-mining loss that is to
7
be applied in working out a
*
transferred pre-mining loss allowance
8
if the
*
entity that has the loss project interest is the same as, or
9
*
closely associated with, the entity that has the receiving interest, at
10
all times in the period:
11
(a) starting at the start of the
*
MRRT year for which the loss
12
arises; and
13
(b) ending at the end of the MRRT year for which the loss is to
14
be applied.
15
Note 1:
It is not a requirement that the same entity has an interest at all times
16
in the period mentioned.
17
Note 2:
Section 115-55 sets out further restrictions on applying pre-mining
18
losses if a mining project interest is a combined interest under
19
Division 115.
20
95-30 The pre-mining loss cap
21
(1)
A
pre-mining loss cap arises for a mining project interest or a
22
*
pre-mining project interest if:
23
(a) an entity starts to have the interest, other than:
24
(i) because the interest came into existence; or
25
(ii) because of the operation of section 215-20, 215-25 or
26
215-30 (interests joining or leaving a consolidated
27
group); or
28
(b) the entity that has the interest:
29
(i) joins or leaves a
*
consolidatable group; or
30
(ii) would join or leave a consolidatable group if the
31
requirements in column 3 of the table in subsection
32
703-15(2) of the Income Tax Assessment Act 1997
33
Chapter 3
MRRT allowances
Part 3-6
Transferred pre-mining loss allowances
Division 95
Transferred pre-mining loss allowances
Section 95-30
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
104 Minerals Resource Rent Tax Bill 2011 No. , 2011
(Australian residence requirements) for an entity to be a
1
*
head company or
*
subsidiary member of a
2
consolidatable group were disregarded.
3
(2) The amount of the
*
pre-mining loss cap for a mining project
4
interest or
*
pre-mining project interest is worked out by dividing
5
by the
*
MRRT rate:
6
(a) if paragraph (1)(a) applies--the amount paid or payable by
7
the entity for starting to have the interest; or
8
(b) if paragraph (1)(b) applies--so much of the amount paid or
9
payable for the joining or leaving as is reasonably attributable
10
to the interest.
11
(3) However, if a mining project interest or
*
pre-mining project
12
interest would, apart from this subsection, have more than one
13
*
pre-mining loss cap, the pre-mining loss cap for the interest is the
14
one that arises last.
15
16
MRRT allowances Chapter 3
Transferred mining loss allowances Part 3-7
Transferred mining loss allowances Division 100
Section 100-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 105
Part 3-7--Transferred mining loss allowances
1
Division 100--Transferred mining loss allowances
2
Guide to Division 100
3
100-1 What this Division is about
4
A miner's MRRT liability for a mining project interest may be
5
reduced by mining losses from one or more other mining project
6
interests.
7
The interests must satisfy a common ownership test from the year
8
the loss arises to the year the loss is applied.
9
Table of sections
10
Operative provisions
11
100-5
Object of this Division
12
100-10
When a miner has a transferred mining loss allowance
13
100-15
The amount of a transferred mining loss allowance
14
100-20
Available mining losses
15
100-25
Common ownership test
16
Operative provisions
17
100-5 Object of this Division
18
The object of this Division is to enable
*
mining losses of a mining
19
project interest to be transferred to other mining project interests,
20
subject to certain limitations primarily designed to ensure that the
21
interests constitute a single economic unit.
22
Chapter 3
MRRT allowances
Part 3-7
Transferred mining loss allowances
Division 100
Transferred mining loss allowances
Section 100-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
106 Minerals Resource Rent Tax Bill 2011 No. , 2011
100-10 When a miner has a transferred mining loss allowance
1
A miner has a transferred mining loss allowance for a mining
2
project interest for an
*
MRRT year if:
3
(a) there is an amount (a remaining profit) by which the miner's
4
*
mining profit for the interest for the year exceeds the sum of
5
all the
*
higher ranking allowances (if any) that the miner has
6
for the interest for the year; and
7
(b) there are one or more
*
mining losses (available mining
8
losses) that, under section 100-20, can be applied in working
9
out the transferred mining loss allowance for the interest for
10
the year.
11
100-15 The amount of a transferred mining loss allowance
12
(1) The amount of the miner's
*
transferred mining loss allowance is so
13
much of the sum of the available mining losses as does not exceed
14
the remaining profit.
15
(2) In working out the amount of a
*
transferred mining loss allowance,
16
*
mining losses are applied in the order in which they arise, but the
17
miner may choose the order in which to apply mining losses that
18
arise at the same time.
19
Note:
Division 119 in Schedule 1 to the Taxation Administration Act 1953 is
20
about choices under the MRRT law.
21
100-20 Available mining losses
22
(1)
A
*
mining loss can be applied in working out a
*
transferred mining
23
loss allowance for a mining project interest (the receiving interest)
24
for an
*
MRRT year (the transfer year) if:
25
(a) the condition in section 100-25 (common ownership test) is
26
met; and
27
(b) the mining loss does not relate to an MRRT year for which
28
the alternative valuation method under Division 175 was
29
chosen in relation to the mining project interest for which the
30
mining loss arises (the loss project interest); and
31
(c)
either:
32
MRRT allowances Chapter 3
Transferred mining loss allowances Part 3-7
Transferred mining loss allowances Division 100
Section 100-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 107
(i) both the loss project interest and the receiving interest
1
relate to iron ore; or
2
(ii) both the loss project interest and the receiving interest
3
do not relate to iron ore.
4
(2) Despite subsection (1), the
*
mining loss cannot be applied to the
5
extent it is applied in working out:
6
(a)
a
*
mining loss allowance; or
7
(b)
a
*
transferred mining loss allowance;
8
for another mining project interest for the year.
9
Note:
Section 115-60 sets out further restrictions on applying mining losses
10
if a mining project interest is a combined interest under Division 115.
11
100-25 Common ownership test
12
(1) At all times in the period mentioned in subsection (2), the miner
13
who has the loss project interest and the miner who has the
14
receiving interest must be:
15
(a) the same miner; or
16
(b)
*
closely associated with each other.
17
(2)
The
period:
18
(a) starts at the start of the
*
MRRT year for which the
*
mining
19
loss arises; and
20
(b) ends at the end of the transfer year.
21
(3) To avoid doubt, it is not a requirement of subsection (1) that the
22
same miner has an interest at all times in the period mentioned.
23
Example: At the start of the period, the loss project interest and the receiving
24
interest are held by the same miner. Part way through the period, the
25
loss project interest is transferred to another entity in the same
26
consolidatable group. The condition in this section is met because, at
27
all times in the period, the interests were held by either the same
28
miner, or a closely associated miner.
29
30
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 115
Combining mining project interests
Section 115-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
108 Minerals Resource Rent Tax Bill 2011 No. , 2011
Chapter 4--Specialist liability rules
1
Part 4-1--Mining project interests
2
Division 115--Combining mining project interests
3
Table of Subdivisions
4
Guide to Division 115
5
115-A Object of this Division
6
115-B When mining project interests are combined
7
115-C The effect of combining mining project interests
8
Guide to Division 115
9
115-1 What this Division is about
10
Mining project interests are combined in a single mining project
11
interest if certain requirements are met (in particular, they must be
12
integrated with each other). The combined mining project interest
13
in effect takes the place of those mining project interests.
14
Subdivision 115-A--Object of this Division
15
Table of sections
16
115-5
Object of this Division
17
115-5 Object of this Division
18
The object of this Division is to treat mining project interests that
19
are
*
integrated as a single interest (unless it would compromise the
20
quarantining rules for
*
allowance components), so that the single
21
interest becomes the basis for ascertaining the
*
MRRT liability for
22
all those interests.
23
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Combining mining project interests Division 115
Section 115-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 109
Subdivision 115-B--When mining project interests are
1
combined
2
Table of sections
3
115-10
Mining project interests may be treated as the same mining project interest
4
115-15
Choosing to override non-compliance
5
115-20
Transferability of royalty credits
6
115-25
Transferability of pre-mining losses
7
115-30
Transferability of mining losses
8
115-35
Starting base losses and starting base assets
9
115-10 Mining project interests may be treated as the same mining
10
project interest
11
(1) For the purposes of the
*
MRRT law (other than this Division and
12
Division 255), 2 or more mining project interests (constituent
13
interests) are taken to be the same mining project interest (the
14
combined interest) from a particular time (the combining time)
15
during an
*
MRRT year if:
16
(a) each of the constituent interests is
*
integrated with each of
17
the other constituent interests; and
18
(b)
each
*
royalty credit relating to any of the constituent interests
19
complies with section 115-20; and
20
(c) each amount (an existing pre-mining loss) that:
21
(i)
is
a
*
pre-mining loss relating to any of the constituent
22
interests; or
23
(ii) if the MRRT year were to end at the combining time,
24
would be a pre-mining loss relating to any of the
25
constituent interests;
26
complies with section 115-25; and
27
(d) each amount (an existing mining loss) that:
28
(i)
is
a
*
mining loss relating to any of the constituent
29
interests; or
30
(ii) if the MRRT year were to end at the combining time,
31
would be a mining loss relating to any of the constituent
32
interests;
33
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 115
Combining mining project interests
Section 115-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
110 Minerals Resource Rent Tax Bill 2011 No. , 2011
complies with section 115-30; and
1
(e)
each
*
starting base loss, or
*
starting base asset, relating to any
2
of the constituent interests complies with section 115-35.
3
Note:
For when interests are integrated, see Division 255.
4
(2) Any of the constituent interests may be mining project interests to
5
which this section has already applied.
6
(3) However, if the
*
suspension day for a mining project interest has
7
happened, the mining project interest cannot be a constituent
8
interest.
9
115-15 Choosing to override non-compliance
10
(1) The fact that:
11
(a)
a
*
royalty credit relating to a constituent interest does not
12
comply with section 115-20; or
13
(b) an existing pre-mining loss relating to a constituent interest
14
does not comply with section 115-25; or
15
(c) an existing mining loss relating to a constituent interest does
16
not comply with section 115-30; or
17
(d)
a
*
starting base loss, or
*
starting base asset does not comply
18
with section 115-35;
19
does not prevent section 115-10 applying to the constituent interest
20
if the miner who has the constituent interest chooses to have the
21
constituent interest treated as part of the combined interest despite
22
the non-compliance.
23
Note:
Division 119 in Schedule 1 to the Taxation Administration Act 1953 is
24
about choices under the MRRT law.
25
(2) If the miner makes that choice:
26
(a)
any
such
*
royalty credit, existing pre-mining loss, existing
27
mining loss or
*
starting base loss is extinguished; and
28
(b)
the
*
base value of any such
*
starting base asset is reduced to
29
zero.
30
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Combining mining project interests Division 115
Section 115-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 111
115-20 Transferability of royalty credits
1
A
*
royalty credit that relates to one of the constituent interests
2
complies with this section if, under section 65-20 (available royalty
3
credits), the royalty credit could be applied in working out a
4
*
transferred royalty allowance for each of the other constituent
5
interests for the
*
MRRT year if:
6
(a) the year were to end at the combining time; and
7
(b) subsection 65-20(2) were disregarded.
8
115-25 Transferability of pre-mining losses
9
An existing pre-mining loss that relates to one of the constituent
10
interests complies with this section if:
11
(a) under section 95-20 (available pre-mining losses), the
12
existing pre-mining loss could be applied in working out a
13
*
transferred pre-mining loss allowance for each of the other
14
constituent interests for the
*
MRRT year if:
15
(i) the year were to end at the combining time; and
16
(ii) subsection 95-20(4) were disregarded; and
17
(b) in a case where one or more of the constituent interests is a
18
combined interest under a previous application of this
19
Division--section 115-55 does not prevent the existing
20
pre-mining loss from being so applied.
21
Note:
Section 95-25 (cap on available pre-mining losses) may impose
22
additional limits on the availability of pre-mining losses under
23
section 95-20.
24
115-30 Transferability of mining losses
25
An existing mining loss that relates to one of the constituent
26
interests complies with this section if:
27
(a) under subsection 100-20(1) (available mining losses), the
28
existing mining loss could be applied in working out a
29
*
transferred mining loss allowance for each of the other
30
constituent interests for the
*
MRRT year if:
31
(i) the year were to end at the combining time; and
32
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 115
Combining mining project interests
Section 115-35
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
112 Minerals Resource Rent Tax Bill 2011 No. , 2011
(ii) subsection 100-20(2) were disregarded; and
1
(b) in a case where one or more of the constituent interests is a
2
combined interest under a previous application of this
3
Division--section 115-60 does not prevent the existing
4
mining loss from being so applied.
5
115-35 Starting base losses and starting base assets
6
A
*
starting base loss, or a
*
starting base asset, that relates to one of
7
the constituent interests complies with this section if:
8
(a) the constituent interest:
9
(i) existed on 2 May 2010; or
10
(ii)
*
originates from a
*
pre-mining project interest that
11
existed on 2 May 2010; and
12
(b) the miner who has the constituent interest is, and at all times
13
since 2 May 2010 has been, the miner who has each other
14
constituent interest (or the pre-mining project interest from
15
which the interest originates).
16
Subdivision 115-C--The effect of combining mining project
17
interests
18
Table of sections
19
115-40
The effect of combining mining project interests
20
115-45
Allowance components arising in preceding MRRT years
21
115-50
Different valuation approaches for mining project interests
22
115-55
Transferred pre-mining loss allowances
23
115-60
Transferred mining loss allowances
24
115-65
Choice of the alternative valuation method
25
115-40 The effect of combining mining project interests
26
In
the
*
MRRT year (the combining year) in which the constituent
27
interests are taken to be the combined interest, the miner is liable to
28
pay any MRRT that is payable in relation to:
29
(a) the constituent interests; and
30
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Combining mining project interests Division 115
Section 115-45
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 113
(b) the part of the year before the constituent interests become
1
the combined interest;
2
as if the constituent interests were taken to be the combined
3
interest at the start of the year.
4
Note 1:
If the whole of the combined interest is transferred later in the same
5
year to a new miner, the new miner's MRRT liability in relation to the
6
year will include the liability under this section: see Division 120.
7
Note 2:
If a part of the combined interest is transferred later in the same year
8
to a new miner, the new miner's MRRT liability in relation to the year
9
will include a part of the liability under this section: see Division 125.
10
115-45 Allowance components arising in preceding MRRT years
11
Royalty credits
12
(1)
Any
*
royalty credit for a constituent interest for an
*
MRRT year
13
preceding the combining year is taken to be a royalty credit for the
14
combined interest for that year.
15
Pre-mining losses
16
(2)
If,
for
an
*
MRRT year preceding the combining year, there is a
17
*
pre-mining loss for at least one of the constituent interests:
18
(a) all of the pre-mining losses for the constituent interests for
19
the year are taken to be a single pre-mining loss for the
20
combined interest for that MRRT year; and
21
(b) the amount of the single pre-mining loss is taken to be the
22
sum of those pre-mining losses.
23
Mining losses
24
(3)
If,
for
an
*
MRRT year preceding the combining year, there is a
25
*
mining loss for at least one of the constituent interests:
26
(a) all of the mining losses for the constituent interests for the
27
year are taken to be a single mining loss for the combined
28
interest for that MRRT year; and
29
(b) the amount of the single mining loss is taken to be the sum of
30
those mining losses.
31
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 115
Combining mining project interests
Section 115-50
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
114 Minerals Resource Rent Tax Bill 2011 No. , 2011
Starting base losses
1
(4)
If,
for
an
*
MRRT year preceding the combining year, there is a
2
*
starting base loss for at least one of the constituent interests:
3
(a) all of the starting base losses for the constituent interests for
4
the year are taken to be a single starting base loss for the
5
combined interest for that MRRT year; and
6
(b) the amount of the single starting base loss is taken to be the
7
sum of those starting base losses.
8
(5) However, subsection (4) does not apply in circumstances covered
9
by section 115-50.
10
115-50 Different valuation approaches for mining project interests
11
(1) If, under Division 85, there is not the same valuation approach, for
12
all the constituent interests:
13
(a) in the circumstances mentioned in subsection (2), there are 2
14
*
starting base losses, for the combined interest for the same
15
*
MRRT year, of the amounts provided in subsection (3); and
16
(b) in working out the amount of a
*
starting base allowance for
17
the combined interest for an MRRT year, the starting base
18
losses for the combined interest in the year are to be applied
19
in the order specified in subsection (4); and
20
(c) in working out under Division 90 the decline in value of any
21
*
starting base asset relating to the constituent interest during
22
an MRRT year, assume that the applicable valuation
23
approach is the valuation approach specified under
24
subsection (5).
25
(2)
There
are
2
*
starting base losses, for the combined interest for the
26
same
*
MRRT year, if, for the year:
27
(a) there would have been one or more starting base losses (book
28
value starting base losses) for the constituent interests for
29
which the book value approach is the valuation approach
30
under Division 85; and
31
(b) there would have been one or more starting base losses
32
(market value starting base losses) for the constituent
33
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Combining mining project interests Division 115
Section 115-55
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 115
interests for which the market value approach is the valuation
1
approach under Division 85;
2
if the combined interest had not existed.
3
(3) The amounts of those 2
*
starting base losses are:
4
(a) an amount equal to the sum of the book value starting base
5
losses; and
6
(b) an amount equal to the sum of the market value starting base
7
losses.
8
(4) Despite subsection 80-15(2), the order for applying the
*
starting
9
base losses for the combined interest for the year is:
10
(a) the starting base loss relating to the book value starting base
11
losses; then
12
(b) the starting base loss relating to the market value starting
13
base losses.
14
(5) The valuation approach is:
15
(a) the book value approach if the asset relates to a constituent
16
interest for which the book value approach is the valuation
17
approach under Division 85; or
18
(b) the market value approach if the asset relates to a constituent
19
interest for which the market value approach is the valuation
20
approach under Division 85.
21
(6) For the purposes of this section, if any of the constituent interests
22
has, under section 80-50, 2
*
starting base losses for the same
23
*
MRRT year, treat the interest as 2 constituent interests for which
24
the valuation approaches under Division 85 are different.
25
115-55 Transferred pre-mining loss allowances
26
(1)
A
*
pre-mining loss relating to a mining project interest other than
27
the combined interest (or any of the constituent interests) cannot be
28
applied in working out a
*
transferred pre-mining loss allowance for
29
the combined interest for an
*
MRRT year if:
30
(a) in relation to at least one of the constituent interests--
31
section 95-25 (cap on available pre-mining losses) would
32
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 115
Combining mining project interests
Section 115-60
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
116 Minerals Resource Rent Tax Bill 2011 No. , 2011
have prevented the loss from being applied in working out a
1
transferred pre-mining loss allowance for the constituent
2
interest for the year (if the combined interest had not
3
existed); and
4
(b) the loss arose in relation to an MRRT year preceding the
5
combined interest coming into existence.
6
(2)
A
*
pre-mining loss relating to the combined interest (or any of the
7
constituent interests) cannot be applied in working out a
8
*
transferred pre-mining loss allowance for another mining project
9
interest for an
*
MRRT year if:
10
(a) in relation to at least one of the constituent interests--
11
section 95-25 (cap on available pre-mining losses) would
12
have prevented the loss from being applied in working out a
13
transferred pre-mining loss allowance for the other mining
14
project interest for the year if:
15
(i) the combined interest had not existed; and
16
(ii) the loss had related to the constituent interest; and
17
(b) the loss arose in relation to an MRRT year preceding the
18
combined interest coming into existence.
19
(3) This section has effect despite section 95-25 (cap on available
20
pre-mining losses).
21
115-60 Transferred mining loss allowances
22
(1)
A
*
mining loss relating to a mining project interest other than the
23
combined interest (or any of the constituent interests) cannot be
24
applied in working out a
*
transferred mining loss allowance for the
25
combined interest for an
*
MRRT year if:
26
(a) in relation to at least one of the constituent interests--
27
subsection 100-20(1) (available mining losses) would not
28
have allowed the loss to be applied in working out a
29
transferred mining loss allowance for the constituent interest
30
for the year (if the combined interest had not existed); and
31
(b) the loss arose in relation to an MRRT year preceding the
32
combined interest coming into existence.
33
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Combining mining project interests Division 115
Section 115-65
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 117
(2)
A
*
mining loss relating to the combined interest (or any of the
1
constituent interests) cannot be applied in working out a
2
*
transferred mining loss allowance for another mining project
3
interest for an
*
MRRT year if:
4
(a) in relation to at least one of the constituent interests--
5
subsection 100-20(1) (available mining losses) would not
6
have allowed the loss to be applied in working out a
7
transferred mining loss allowance for the other mining
8
project interest for the year if:
9
(i) the combined interest had not existed; and
10
(ii) the loss had related to the constituent interest; and
11
(b) the loss arose in relation to an MRRT year preceding the
12
combined interest coming into existence.
13
(3) This section has effect despite section 100-20 (available mining
14
losses).
15
115-65 Choice of the alternative valuation method
16
(1) A choice by the miner to use the alternative valuation method
17
under Division 175 in relation to any of the constituent interests for
18
the combining year has no effect.
19
(2) The miner may choose to use the alternative valuation method
20
under Division 175 in relation to the combined interest for the year
21
in the circumstances set out in Subdivision 175-B. The choice
22
relates to the whole of the year.
23
24
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 120
Transferring mining project interests
Section 120-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
118 Minerals Resource Rent Tax Bill 2011 No. , 2011
Division 120--Transferring mining project interests
1
Guide to Division 120
2
120-1 What this Division is about
3
If a mining project interest is transferred, in most respects the new
4
miner takes over from the original miner in relation to MRRT
5
matters. In particular, the new miner bears the MRRT liability for
6
the transfer year.
7
Table of sections
8
Operative provisions
9
120-5
Object of this Division
10
120-10
Effect of mining project transfer
11
120-15
Effect of transferred property
12
120-20
Events happening after mining project transfer
13
120-25
Start of mining venture taken to be mining project transfer
14
Operative provisions
15
120-5 Object of this Division
16
The object of this Division is to ensure that, if a mining project
17
interest is transferred:
18
(a) consistent with the MRRT being a project-based tax, matters
19
relevant to the MRRT that are connected with the interest
20
before the transfer remain connected with the interest after
21
the transfer; and
22
(b) in particular, the
*
MRRT liability for the interest for the part
23
of the
*
MRRT year before the transfer attaches to the miner
24
who has the interest after the transfer, and not to the miner
25
who had the interest before the transfer.
26
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Transferring mining project interests Division 120
Section 120-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 119
120-10 Effect of mining project transfer
1
Liability for MRRT moves with interest
2
(1) Any MRRT that would otherwise be payable by a miner in relation
3
to a mining project interest in relation to the part of an
*
MRRT
4
year before a
*
mining project transfer happens (the pre-transfer
5
part year) is payable instead, in accordance with this Division:
6
(a) by the miner that has the mining project interest after the
7
transfer; and
8
(b) in the MRRT year for that miner in which the transfer
9
happens.
10
Note 1:
The MRRT liability for the miner that has the interest after the transfer
11
is worked out in accordance with this Division. It may be more, or
12
less, than the liability the other miner would have had, depending on
13
circumstances such as choices, offsets and available allowances.
14
Note 2:
For any period after the transfer that the new miner has the interest, its
15
liability for MRRT (if any) is worked out under the ordinary rules.
16
Note 3:
The miner that has the interest after the transfer may have an
17
additional amount of instalment income in the instalment quarter in
18
which the transfer happens: see section 115-95 in Schedule 1 to the
19
Taxation Administration Act 1953.
20
Continuation of mining project interest
21
(2) The mining project interest (the new interest) that a miner (the new
22
miner) has just after a
*
mining project transfer is taken to be a
23
continuation of the mining project interest (the original interest) a
24
miner (the original miner) had just before the transfer.
25
Note:
This means, for example, that:
26
(a) the mining project interest retains the history of when it started,
27
and of the miners who have had the interest at various times; and
28
(b) a choice made, under Division 85, of the valuation approach for
29
the mining project interest continues to have effect; and
30
(c) starting base assets that have been used to an extent in relation to
31
the mining project interest before the transfer retain the history of
32
that use.
33
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 120
Transferring mining project interests
Section 120-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
120 Minerals Resource Rent Tax Bill 2011 No. , 2011
Meaning of mining project transfer
1
(3)
A
mining project transfer happens if:
2
(a)
an
*
arrangement that has the effect of transferring the whole
3
of the entitlement comprising a mining project interest from
4
one miner to a single other
*
entity comes into force; and
5
(b) the mining project interest the other entity starts to have
6
covers the same
*
project area.
7
Note:
If the arrangement relates to a combined interest (see Division 115)
8
that is integrated because the original miner chose downstream
9
integration:
10
(a) the interest will not be a combined interest after the transfer
11
unless the new miner has chosen downstream integration; and
12
(b) under Division 125, there will be a split of the combined interest
13
until the new miner makes such a choice.
14
MRRT amounts move with interest
15
(4) For the purposes of the application of the
*
MRRT law in the
16
*
MRRT year in which the transfer happens or a later MRRT year,
17
each of the following amounts that, apart from this Division, would
18
be an amount for the original miner and the original interest is
19
instead an amount for the new miner and the new interest:
20
(a) an amount included in
*
mining revenue for the pre-transfer
21
part year or an earlier MRRT year;
22
(b) an amount included in
*
mining expenditure for the
23
pre-transfer part year or an earlier MRRT year;
24
(c) an amount of a
*
royalty credit arising for the original interest
25
in the pre-transfer part year;
26
(d) an amount of an
*
allowance component arising in an earlier
27
MRRT year.
28
Note:
If the original miner's MRRT year starts before the new miner's
29
MRRT year, the effect of this provision is that amounts from before
30
the start of the new miner's MRRT year are taken into account for the
31
new miner in the new miner's MRRT year.
32
Example: The original miner has a substituted accounting period of 12 months
33
from 1 April to 31 March. The new miner has an MRRT year of 1 July
34
to 30 June. The transfer happens on 1 July. The amounts covered by
35
subsection (4) are all amounts that would be amounts for the original
36
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Transferring mining project interests Division 120
Section 120-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 121
miner for the period from 1 April to 30 June, so these will be amounts
1
for the new miner for the MRRT year 1 July to 30 June.
2
Choices
3
(5) Despite subsection (4), in working out under that subsection an
4
amount for the
*
MRRT year in which the transfer happens or a
5
later MRRT year, a choice of the following kind made by the new
6
miner is taken into account, but a choice of that kind made by the
7
original miner is disregarded:
8
(a) a choice under Division 175 to use the alternative valuation
9
method in relation to the mining project interest for the
10
*
MRRT year in which the mining project transfer happens;
11
(b) a choice under Division 200 to use the simplified MRRT
12
method for that year.
13
Note:
The effect of a simplified MRRT method choice made for a year
14
before the transfer year is not affected: all allowance components are
15
extinguished (see Division 200).
16
Example: An original miner had made a choice to use the alternative valuation
17
method in the MRRT year in which a mining project transfer happens.
18
The new miner makes no choices.
19
The new miner works out the amounts to include in its mining revenue
20
for the pre-transfer part year by working out the amount the original
21
miner would have included if the original miner had not chosen to use
22
the alternative valuation method.
23
Suspension day
24
(6) If there is a
*
suspension day for the mining project interest that was
25
chosen under paragraph 130-10(1)(a):
26
(a)
the
*
mining project transfer does not affect:
27
(i) any extinguishment under section 130-15 of
*
allowance
28
components relating to the mining project interest; or
29
(ii)
any
*
rehabilitation tax offset amounts, for any earlier
30
*
MRRT years, relating to the mining project interest;
31
and
32
(b) that suspension day:
33
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 120
Transferring mining project interests
Section 120-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
122 Minerals Resource Rent Tax Bill 2011 No. , 2011
(i) does not affect any further allowance components
1
relating to the mining project interest and that MRRT
2
year or later MRRT years; but
3
(ii) is no longer to be taken into account in determining
4
whether there are any rehabilitation tax offset amounts,
5
for that MRRT year or any later MRRT years, relating
6
to the mining project interest.
7
Note:
The new miner may make a suspension day choice in the
8
circumstances set out in Division 130.
9
120-15 Effect of transferred property
10
(1) This section applies if:
11
(a) any property, or any legal or equitable right that is not
12
property, (the transferred property) is transferred to the new
13
miner under the
*
mining project transfer; and
14
(b) the original miner used the transferred property in
*
mining
15
operations for the mining project interest; and
16
(c) the transferred property:
17
(i) gave rise to an amount of
*
mining expenditure for the
18
original miner, or another miner who preceded the
19
original miner, in relation to the mining project interest;
20
or
21
(ii) is, or may become, a
*
starting base asset, in relation to
22
the mining project interest.
23
(2) Despite section 30-40, no amount is included in the original
24
miner's
*
mining revenue for the mining project interest in relation
25
to any part of the consideration for the transfer that relates to the
26
transferred property.
27
(3) For the new miner, any part of the consideration for the transfer
28
that relates to the transferred property is taken, for the purposes of
29
section 35-35, to be expenditure relating to the acquisition of the
30
mining project interest.
31
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Transferring mining project interests Division 120
Section 120-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 123
(4) To avoid doubt, the
*
mining project transfer, and the transfer of the
1
transferred property, is not an event or circumstance giving rise to
2
an adjustment under Division 160.
3
Note:
Events or circumstances happening after the transfer may give rise to
4
adjustment under Division 160, for instance if the new miner uses the
5
transferred property in relation to the mining project interest to a
6
greater or lesser extent than the original miner.
7
120-20 Events happening after mining project transfer
8
(1) A thing that happens at a particular time in relation to an
*
entity
9
(the first entity) is taken instead to happen in relation to another
10
entity, and to have the effect mentioned in paragraph (c) in relation
11
to a mining project interest the other entity has, if:
12
(a) the other entity has the interest at the time as a result of a
13
*
mining project transfer; and
14
(b) the first entity had the interest at an earlier time; and
15
(c) if the first entity still had the interest, the thing would affect
16
the first entity's
*
MRRT liability,
*
allowance components or
17
*
rehabilitation tax offsets for the interest.
18
(2) However, if one or more
*
mining project splits or
*
pre-mining
19
project splits has happened in relation to the interest in the period
20
from when the first entity last had the interest until the time the
21
thing happens:
22
(a) the thing is taken to happen in relation to the other entity in
23
relation to the interest; but
24
(b) the extent to which the thing affects the other entity's
25
*
MRRT liability,
*
allowance components or
*
rehabilitation
26
tax offsets is reduced to reflect:
27
(i) if only one split (whether a mining project split or a
28
pre-mining project split) happened in the period--the
29
*
split percentage relating to that split; or
30
(ii) if 2 or more such splits happened in the period--a
31
percentage worked out by multiplying the split
32
percentages for each of those splits.
33
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 120
Transferring mining project interests
Section 120-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
124 Minerals Resource Rent Tax Bill 2011 No. , 2011
Note:
The first entity is required to advise the other entity about the thing
1
that happens: see Division 121 in Schedule 1 to the Taxation
2
Administration Act 1953.
3
Example: After a mining project transfer happens, the original miner makes an
4
initial supply of taxable resources that would have given rise to an
5
amount of mining revenue for the miner if it still had the interest.
6
Instead, the new miner is taken to have made the initial supply, and
7
includes the amount in mining revenue for the interest.
8
120-25 Start of mining venture taken to be mining project transfer
9
(1) The start of a
*
mining venture is taken to be a
*
mining project
10
transfer of a mining project interest that existed, just before that
11
start, under subsection 15-5(4) if:
12
(a) the start of the mining venture gives rise to a single mining
13
project interest under subsection 15-5(1); and
14
(b) the mining venture relates to all of the
*
taxable resources to
15
which the mining project interest under subsection 15-5(4)
16
related.
17
(2) In applying this Division for the purposes of subsection (1),
18
disregard subsection 120-10(5) and paragraph 120-10(6)(b).
19
Example: TressCo has a mining project interest under subsection 15-5(4) as a
20
result of being granted a production right entitling it to extract coal
21
from an area.
22
TressCo later starts a mining venture, in which it is the sole
23
participant, to extract the whole coal deposit from the whole of the
24
area to which the production right relates. The start of this mining
25
venture gives rise to a mining project interest for TressCo under
26
subsection 15-5(1) and is taken to be a mining project transfer of the
27
mining project interest TressCo had under subsection 15-5(4).
28
One effect of this is that the interest TressCo has in the mining venture
29
(the new interest) is taken to be a continuation of the mining project
30
interest it had under subsection 15-5(4) (the original interest).
31
32
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Splitting mining project interests Division 125
Section 125-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 125
Division 125--Splitting mining project interests
1
Guide to Division 125
2
125-1 What this Division is about
3
If a mining project interest is split, in most respects the new miners
4
take over from the original miner in relation to MRRT matters,
5
each to an extent appropriate to their share of the split. In
6
particular, each new miner bears an appropriate share of the MRRT
7
liability for the year of the split.
8
Table of sections
9
Operative provisions
10
125-5
Object of this Division
11
125-10
Effect of mining project split
12
125-15 Meaning
of
split percentage
13
125-20
Effect of transferred property
14
125-25
Effect of MRRT liability from earlier years on rehabilitation tax offset
15
amounts
16
125-30
Events happening after mining project split
17
125-35
Start of mining venture taken to be mining project split
18
Operative provisions
19
125-5 Object of this Division
20
The object of this Division is to ensure that, if a mining project
21
interest is split:
22
(a) consistent with the MRRT being a project-based tax, matters
23
relevant to the MRRT that are connected with the interest
24
before the split remain connected (to the appropriate extents)
25
with the split interests after the split; and
26
(b) in particular, the
*
MRRT liability for the interest for the part
27
of the
*
MRRT year before the split attaches (to the
28
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 125
Splitting mining project interests
Section 125-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
126 Minerals Resource Rent Tax Bill 2011 No. , 2011
appropriate extents) to the miners who have the split interests
1
after the split.
2
125-10 Effect of mining project split
3
Liability for MRRT moves with interest
4
(1) Any MRRT that would otherwise be payable by a miner in relation
5
to a mining project interest in relation to the part of an
*
MRRT
6
year before a
*
mining project split happens (the pre-split part year)
7
is payable instead, in accordance with this Division:
8
(a) by each miner that has the mining project interest after the
9
split; and
10
(b) in the MRRT year for each such miner in which the split
11
happens.
12
Note 1:
The MRRT liability for each split interest is worked out in accordance
13
with this Division. The sum total of those liabilities may be more, or
14
less, than the liability the original miner would have had, depending
15
on circumstances such as choices, offsets and available allowances.
16
Note 2:
For any period after the split that the new miner has the interest, its
17
liability for MRRT (if any) is worked out under the ordinary rules.
18
Note 3:
The miner that has the interest after the split may have an additional
19
amount of instalment income in the instalment quarter in which the
20
split happens: see section 115-95 in Schedule 1 to the Taxation
21
Administration Act 1953.
22
Continuation of mining project interest
23
(2) Each mining project interest (a new interest) that a miner (a new
24
miner) has just after a
*
mining project split is taken to be a
25
continuation of the mining project interest (the original interest) a
26
miner (the original miner) had just before the split.
27
Note:
This means, for example, that:
28
(a) each split interest retains the history of when the mining project
29
interest started, and of the entities who have held the interest at
30
various times; and
31
(b) a choice made, under Division 85, of the valuation approach for
32
the mining project interest continues to have effect; and
33
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Splitting mining project interests Division 125
Section 125-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 127
(c) starting base assets that have been used to an extent in relation to
1
the mining project interest before the transfer retain the history of
2
that use.
3
Meaning of mining project split
4
(3)
A
mining project split happens if:
5
(a)
an
*
arrangement comes into force that has the effect of
6
transferring, from one miner to 2 or more other
*
entities, the
7
whole of the entitlement comprising a mining project
8
interest; or
9
(b) an arrangement comes into force that has the effect of
10
transferring, from one miner to one or more other entities, a
11
part of the entitlement comprising a mining project interest;
12
or
13
(c)
under
an
*
Australian law, the
*
production right to which a
14
mining project interest relates is split into 2 or more
15
production rights; or
16
(d) 2 or more constituent interests that are taken to be the same
17
mining project interest because of Division 115 stop being
18
*
integrated.
19
Note:
A new miner may also be the original miner, in the situations
20
described in paragraphs (b), (c) and (d).
21
MRRT amounts move with interest
22
(4) For the purposes of the application of the
*
MRRT law in the
23
*
MRRT year in which the split happens or a later MRRT year, each
24
of the following amounts that, apart from this Division, would be
25
an amount for the original miner and the original interest is instead,
26
to the extent of a new interest's
*
split percentage, an amount for the
27
new miner and the new interest:
28
(a) an amount included in
*
mining revenue for the pre-split part
29
year or an earlier MRRT year;
30
(b) an amount included in
*
mining expenditure for the pre-split
31
part year or an earlier MRRT year;
32
(c) an amount of a
*
royalty credit arising for the original interest
33
in the pre-split part year;
34
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 125
Splitting mining project interests
Section 125-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
128 Minerals Resource Rent Tax Bill 2011 No. , 2011
(d) an amount of an
*
allowance component arising in an earlier
1
MRRT year.
2
Note:
If the original miner's MRRT year starts before a new miner's MRRT
3
year, the effect of this provision is that amounts from before the start
4
of the new miner's MRRT year are taken into account for the new
5
miner in the new miner's MRRT year.
6
Example: The original miner has a substituted accounting period of 12 months
7
from 1 April to 31 March. The new miner has an MRRT year of 1 July
8
to 30 June. The split happens on 1 July. The amounts covered by
9
subsection (4) are all amounts that would be amounts for the original
10
miner for the period from 1 April to 30 June, so these will, to the
11
extent of the new interest's split percentage, be amounts for the new
12
miner for the MRRT year 1 July to 30 June.
13
Choices
14
(5) Despite subsection (4), in working out under that subsection an
15
amount for the
*
MRRT year in which the split happens or a later
16
MRRT year, a choice of the following kind made by the new miner
17
is taken into account, but a choice of that kind made by the original
18
miner is disregarded:
19
(a) a choice under Division 175 to use the alternative valuation
20
method in relation to the mining project interest for the
21
*
MRRT year in which the
*
mining project split happens;
22
(b) a choice under Division 200 to use the simplified MRRT
23
method for the MRRT year in which the split happens.
24
Note:
The effect of a simplified MRRT method choice made for a year
25
before the split year is not affected: all allowance components are
26
extinguished (see Division 200).
27
Example: A mining project interest is split into 2 mining project interests held
28
by 2 different new miners. The original miner had made a choice to
29
use the alternative valuation method for the interest for the MRRT
30
year in which the split happens. One of the new miners also chooses to
31
use the alternative valuation method and one does not.
32
The new miner that chooses to use the alternative valuation method
33
works out the amounts to include in its mining revenue for the
34
pre-split part year by working out the amount the original explorer
35
would have included, then applying its split percentage.
36
The other new miner works out the amount to include in its mining
37
revenue for the pre-split part year by working out the amount the
38
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Splitting mining project interests Division 125
Section 125-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 129
original miner would have included if no choices were made, then
1
applying its split percentage.
2
Suspension day
3
(6) If there is a
*
suspension day for the mining project interest that was
4
chosen under paragraph 130-10(1)(a):
5
(a)
the
*
mining project split does not affect:
6
(i) any extinguishment under section 130-15 of
*
allowance
7
components relating to the mining project interest; or
8
(ii)
any
*
rehabilitation tax offset amounts, for any earlier
9
*
MRRT years, relating to the mining project interest;
10
and
11
(b) that suspension day:
12
(i) does not affect any further allowance components
13
relating to a new interest and to that MRRT year or later
14
MRRT years; but
15
(ii) is no longer to be taken into account in determining
16
whether there are any rehabilitation tax offset amounts,
17
for that MRRT year or any later MRRT years, relating
18
to a new interest.
19
Note:
The new miner may make a suspension day choice in the
20
circumstances set out in Division 130.
21
Exception for new miner that is the same entity as original miner
22
(7) If a new miner in relation to a
*
mining project split is the same
23
*
entity as the original miner:
24
(a) a choice that would otherwise be disregarded under
25
subsection (5) in working out an amount for that new miner
26
is not disregarded; and
27
(b) paragraph (6)(b) does not apply in relation to the new interest
28
that that new miner has.
29
Note:
This subsection does not affect the operation of subsection (5) and
30
paragraph (6)(b) for a new miner that is not the original miner.
31
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 125
Splitting mining project interests
Section 125-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
130 Minerals Resource Rent Tax Bill 2011 No. , 2011
125-15 Meaning of split percentage
1
(1)
The
split percentage for a new interest a miner has just after a
2
*
mining project split is the percentage that best reflects a
3
reasonable approximation of the
*
market value of the new interest,
4
expressed as a percentage of the sum of the market values of all the
5
new interests arising from the split.
6
(2)
The
*
market values mentioned in subsection (1) are those values
7
just after the
*
mining project split to which the new interest relates.
8
(3) To avoid doubt, the sum of the
*
split percentages for the new
9
interests must equal 100%.
10
125-20 Effect of transferred property
11
(1) This section applies if:
12
(a) any property, or any legal or equitable right that is not
13
property, (the transferred property) is transferred to a new
14
miner under the
*
mining project split; and
15
(b) the original miner used the transferred property in
*
mining
16
operations for the mining project interest; and
17
(c) the transferred property:
18
(i) gave rise to an amount of
*
mining expenditure for the
19
original miner, or another miner who preceded the
20
original miner, in relation to the mining project interest;
21
or
22
(ii) is, or may become, a
*
starting base asset, in relation to
23
the mining project interest.
24
(2) Despite section 30-40, no amount is included in the original
25
miner's
*
mining revenue for the mining project interest in relation
26
to any part of the consideration for the transfer that relates to the
27
transferred property.
28
(3) For the new miner, any part of the consideration for the transfer
29
that relates to the transferred property is taken, for the purposes of
30
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Splitting mining project interests Division 125
Section 125-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 131
section 35-35, to be expenditure relating to the acquisition of the
1
mining project interest.
2
(4) To avoid doubt, the
*
mining project split, and the transfer of the
3
transferred property, is not an event or circumstance giving rise to
4
an adjustment under Division 160.
5
Note:
Events or circumstances happening after the split may give rise to an
6
adjustment under Division 160, for instance if the new miner uses the
7
transferred property in relation to the mining project interest to a
8
greater or lesser extent than the original miner.
9
125-25 Effect of MRRT liability from earlier years on rehabilitation
10
tax offset amounts
11
For the purposes of section 225-15, only a proportion, worked out
12
on a reasonable basis, of an
*
MRRT liability, of the original miner
13
or any other miner, for the mining project interest for an
*
MRRT
14
year before the year in which a
*
mining project split happens, is
15
taken to have been paid in relation to a new interest.
16
Note:
The original miner is required to give the new miner the information it
17
needs to work out the amount of a rehabilitation tax offset: see
18
Division 121 in Schedule 1 to the Taxation Administration Act 1953.
19
125-30 Events happening after mining project split
20
(1) A thing that happens at a time in relation to an
*
entity (the first
21
entity) is taken instead to happen in relation to another entity, and
22
to have the effect mentioned in paragraph (c) in relation to a
23
mining project interest the other entity has, if:
24
(a) the other entity has the interest at the time as a result of a
25
*
mining project split; and
26
(b) the first entity had the interest at an earlier time; and
27
(c) if the first entity still had the interest, the thing would affect
28
the first entity's
*
MRRT liability,
*
allowance components or
29
*
rehabilitation tax offsets for the interest.
30
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 125
Splitting mining project interests
Section 125-35
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
132 Minerals Resource Rent Tax Bill 2011 No. , 2011
(2) However, the extent to which the thing affects the other entity's
1
*
MRRT liability,
*
allowance components or
*
rehabilitation tax
2
offsets is reduced to reflect:
3
(a) if only one
*
mining project split happened in the period from
4
when the first entity last had the interest until the time the
5
thing happens--the
*
split percentage relating to that split; or
6
(b) if 2 or more mining project splits or
*
pre-mining project splits
7
happened in the period--a percentage worked out by
8
multiplying the split percentages for each of those splits.
9
Note 1:
The first entity is required to advise the other entity about the thing
10
that happens: see Division 121 in Schedule 1 to the Taxation
11
Administration Act 1953.
12
Note 2:
A mining project transfer or pre-mining project transfer may also have
13
happened in the period, but will not affect the extent worked out under
14
subsection (2).
15
Example: After a mining project split happens, the original miner makes an
16
initial supply of taxable resources that would have given rise to an
17
amount of mining revenue for the miner if it still had the interest.
18
Instead, each new miner is taken to have made the initial supply, and
19
includes its split percentage of the amount in mining revenue for the
20
interest.
21
125-35 Start of mining venture taken to be mining project split
22
(1) The start of a
*
mining venture that gives rise to a mining project
23
interest under subsection 15-5(1) is taken to be a
*
mining project
24
split of a mining project interest that existed, just before that start,
25
under subsection 15-5(4) if:
26
(a) the mining venture relates to some (but not all) of the
27
*
taxable resources to which the mining project interest under
28
subsection 15-5(4) related; or
29
(b) the mining venture relates to all of those resources, and more
30
than one entity has a mining project interest in relation to the
31
mining venture at the time it starts.
32
Example: VioletCo has a mining project interest under subsection 15-5(4) as a
33
result of being granted a production right entitling it to extract iron ore
34
from an area in which 2 bodies of ore have been identified.
35
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Splitting mining project interests Division 125
Section 125-35
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 133
VioletCo and DiggerCo later start a mining venture, in which they
1
both participate, to extract one of the bodies of ore. There is no mining
2
venture in relation to the other body of ore.
3
The start of this mining venture gives rise to mining project interests
4
for VioletCo and DiggerCo under subsection 15-5(1). There is taken
5
to be a mining project split of the mining project interest VioletCo had
6
under subsection 15-5(4) after which there are 3 new interests: the 2
7
interests in the mining venture and VioletCo's reduced residual
8
interest under subsection 15-5(4). VioletCo is the original miner and
9
both VioletCo and DiggerCo are the new miners.
10
One effect of this is that each of the new interests is taken to be a
11
continuation of the mining project interest VioletCo had under
12
subsection 15-5(4) (the original interest).
13
(2) To avoid doubt, the start of a
*
mining venture may be taken to be a
14
*
mining project split for more than one mining project interest, if
15
the start of the mining venture has the effect mentioned in
16
paragraph (1)(a) or (b) in relation to more than one mining project
17
interest.
18
19
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 130
Winding down mining project interests
Section 130-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
134 Minerals Resource Rent Tax Bill 2011 No. , 2011
Division 130--Winding down mining project interests
1
Guide to Division 130
2
130-1 What this Division is about
3
From the suspension day for a mining project interest (a day
4
primarily related to the ceasing of commercial production),
5
allowance components are extinguished unless they can be applied
6
in relation to the current year.
7
Table of sections
8
Operative provisions
9
130-5
Object of this Division
10
130-10
Suspension days for mining project interests
11
130-15
Extinguishing allowance components
12
130-20
Restarting commercial production
13
Operative provisions
14
130-5 Object of this Division
15
The object of this Division is to provide for the winding down of
16
mining project interests, and to ensure that allowance components
17
cannot be carried forward when a mining project interest is
18
winding down.
19
130-10 Suspension days for mining project interests
20
(1)
The
suspension day for a mining project interest is the earliest of
21
the following:
22
(a) the day, occurring after the day on which commercial
23
production of
*
taxable resources from the
*
project area for
24
the mining project interest ceased, chosen by the miner who
25
has the mining project interest;
26
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Winding down mining project interests Division 130
Section 130-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 135
(b) the day occurring 10 years after the day on which
1
commercial production of taxable resources from the project
2
area for the mining project interest most recently took place;
3
(c)
the
*
termination day for the mining project interest.
4
(2) A miner may choose the
*
suspension day for a mining project
5
interest that the miner has if commercial production of
*
taxable
6
resources from the
*
project area for the mining project interest has
7
ceased.
8
Note:
Division 119 in Schedule 1 to the Taxation Administration Act 1953 is
9
about choices under the MRRT law.
10
(3) Without limiting the matters that may be taken into account in
11
determining, for the purposes of this section, whether commercial
12
production of
*
taxable resources from the
*
project area takes place,
13
the following are to be taken into account:
14
(a) past and current production of taxable resources from the
15
project area;
16
(b) past and current expenditure relating to the
*
upstream mining
17
operations for the mining project interest;
18
(c) the extent to which mining equipment used in carrying on
19
those upstream mining operations has been decommissioned.
20
(4) The choice must be given to the Commissioner.
21
130-15 Extinguishing allowance components
22
If
the
*
suspension day for a mining project interest happens in a
23
particular
*
MRRT year (the suspension year), an
*
allowance
24
component relating to the mining project interest:
25
(a) is extinguished if it relates to the suspension year or an earlier
26
MRRT year, except to the extent that it is applied in working
27
out, for the suspension year, an
*
MRRT allowance for that
28
mining project interest or any other mining project interest;
29
and
30
(b) is extinguished if it relates to a later MRRT year, except to
31
the extent that it is applied in working out, for that later
32
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 130
Winding down mining project interests
Section 130-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
136 Minerals Resource Rent Tax Bill 2011 No. , 2011
MRRT year, an MRRT allowance for that mining project
1
interest or any other mining project interest.
2
Example: The suspension day for a mining project interest happens in the
3
2015-16 year. For that year, the mining profit for the mining project
4
interest is $15 million, and there is a royalty credit of $5 million. From
5
the previous year, the only allowance component is a mining loss that,
6
in the 2015-16 year, is $12 million.
7
The royalty credit is applied as a royalty allowance of $5 million to
8
reduce the mining profit, and is not extinguished under this section.
9
The mining loss from the previous year is applied as a mining loss
10
allowance of $10 million, but the remaining $2 million of the mining
11
loss is extinguished under this section (unless it can be used as a
12
transferred mining loss allowance, relating to the suspension year, for
13
another mining project interest).
14
130-20 Restarting commercial production
15
(1) If, after the
*
suspension day for a mining project interest happens,
16
the miner that has the interest is carrying on
*
upstream mining
17
operations for the interest with a view to restarting commercial
18
production of
*
taxable resources from the
*
project area for the
19
interest, for the purposes of the
*
MRRT law:
20
(a) the interest (the original interest) is taken to cease to exist;
21
and
22
(b) a separate mining project interest relating to extraction of
23
taxable resources from the project area is taken to come into
24
existence at that time.
25
(2) To avoid doubt, the original interest ceasing to exist and the
26
separate mining project interest coming into existence do not
27
constitute a
*
mining project transfer.
28
29
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Ending mining project interests Division 135
Section 135-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 137
Division 135--Ending mining project interests
1
Guide to Division 135
2
135-1 What this Division is about
3
The last entity to have a particular mining project interest is
4
treated, for the purpose of accounting for MRRT, as continuing to
5
have the mining project interest after the termination day.
6
Table of sections
7
Operative provisions
8
135-5
The termination day for a mining project interest
9
135-10
The effect of renewing or changing production rights
10
135-15
The effect of renewing or changing mining ventures
11
135-20
The effect of mining project transfers and mining project splits
12
135-25
Continuation of obligations etc. after the termination day
13
Operative provisions
14
135-5 The termination day for a mining project interest
15
The
termination day for a mining project interest is the day on
16
which there is no longer any entity that has the mining project
17
interest.
18
Note 1:
For when an entity has a mining project interest, see section 15-5.
19
Note 2:
If the suspension day for the mining project interest has not already
20
happened, the termination day will also be the suspension day under
21
section 130-10.
22
135-10 The effect of renewing or changing production rights
23
(1) A change in, or a renewal of, the
*
production right to which a
24
mining project interest relates does not cause the
*
termination day
25
for the mining project interest to happen.
26
Chapter 4
Specialist liability rules
Part 4-1
Mining project interests
Division 135
Ending mining project interests
Section 135-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
138 Minerals Resource Rent Tax Bill 2011 No. , 2011
(2) However, if the change in, or the renewal of, the
*
production right
1
would otherwise result in the mining project interest covering an
2
additional area:
3
(a)
the
*
project area for the mining project interest does not
4
include that additional area; and
5
(b) to avoid doubt, the additional area is the project area for
6
another mining project interest.
7
Note:
The other mining project interest may be combined with the original
8
mining project interest under Division 115.
9
135-15 The effect of renewing or changing mining ventures
10
A change in, or a renewal of, a
*
mining venture relating to a
11
mining project interest does not cause the
*
termination day for the
12
mining project interest to happen.
13
135-20 The effect of mining project transfers and mining project
14
splits
15
A
*
mining project transfer or a
*
mining project split relating to a
16
mining project interest does not cause the
*
termination day for the
17
mining project interest to happen.
18
Note 1:
Under subsection 120-10(2), the mining project interest after a mining
19
project transfer is a continuation of the mining project interest before
20
the transfer.
21
Note 2:
Under subsection 125-10(2), the mining project interests after a
22
mining project split are a continuation of the mining project interest
23
before the split.
24
135-25 Continuation of obligations etc. after the termination day
25
(1)
After
the
*
termination day for a mining project interest, the last
26
*
entity to have had the mining project interest is taken, for the
27
purposes of the
*
MRRT law, to continue to have the mining project
28
interest:
29
(a) for the whole of the remainder of the
*
MRRT year in which
30
the termination day happens; and
31
(b) for the whole of any later MRRT year.
32
Specialist liability rules Chapter 4
Mining project interests Part 4-1
Ending mining project interests Division 135
Section 135-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 139
(2)
If
the
*
entity is not a miner during a period in which this section
1
applies to the entity after the
*
termination day, this section applies
2
as if the entity continues to be a miner during that period.
3
4
Chapter 4
Specialist liability rules
Part 4-2
Pre-mining project interests
Division 140
Pre-mining profits and royalty credits
Section 140-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
140 Minerals Resource Rent Tax Bill 2011 No. , 2011
Part 4-2--Pre-mining project interests
1
Division 140--Pre-mining profits and royalty credits
2
Table of Subdivisions
3
Guide to Division 140
4
140-A Pre-mining
profits
5
140-B Pre-mining royalty credits
6
Guide to Division 140
7
140-1 What this Division is about
8
If an entity's pre-mining revenue for a pre-mining project interest
9
exceeds its pre-mining expenditure, the excess is usually treated as
10
a mining profit for a mining project interest.
11
Mining royalties can give rise to royalty credits for a pre-mining
12
project interest.
13
Subdivision 140-A--Pre-mining profits
14
Table of sections
15
140-5 Pre-mining
profits
16
140-10
Treatment of pre-mining profits--general rule
17
140-15
Effect on allowance components for other mining project interests
18
140-20
Treatment of pre-mining profits--mining project interest originating from
19
the pre-mining project interest
20
140-5 Pre-mining profits
21
(1)
A
pre-mining profit arises for an
*
MRRT year if:
22
(a) during the year, an
*
entity
*
holds a
*
pre-mining project
23
interest; and
24
Specialist liability rules Chapter 4
Pre-mining project interests Part 4-2
Pre-mining profits and royalty credits Division 140
Section 140-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 141
(b)
the
entity's
*
pre-mining revenue for the interest for the year
1
exceeds the entity's
*
pre-mining expenditure for the interest
2
for the year.
3
(2) In that year, the amount of the
*
pre-mining profit is the amount of
4
the excess.
5
140-10 Treatment of pre-mining profits--general rule
6
(1)
The
*
entity may be liable, under this section, to pay MRRT, for the
7
*
MRRT year, in relation to the
*
pre-mining profit.
8
(2) For the purpose only of working out the amount (if any) of that
9
MRRT, the
*
MRRT law has effect as if:
10
(a)
the
*
pre-mining project interest were, in the
*
MRRT year and
11
any earlier MRRT years, a mining project interest that the
12
*
entity has; and
13
(b)
the
*
pre-mining profit were a
*
mining profit for that mining
14
project interest for the MRRT year; and
15
(c) subsection 70-20(1) does not apply for the purpose of
16
determining whether a
*
pre-mining loss can be applied in
17
working out a
*
pre-mining loss allowance for that mining
18
project interest for the MRRT year or any earlier MRRT
19
year; and
20
(d)
no
*
mining loss or
*
starting base loss arises, or has arisen for
21
that mining project interest for the MRRT year or any earlier
22
MRRT year; and
23
(e) that mining project interest were not
*
integrated with any
24
other mining project interest; and
25
(f)
the
*
exploration right to which the pre-mining project interest
26
relates were a
*
production right; and
27
(g) in a case where the entity is not a miner--the entity were, in
28
the MRRT year and any earlier MRRT years, a miner.
29
Note 1:
The following MRRT allowances could be available for the
30
pre-mining project interest:
31
(a) royalty
allowances;
32
Chapter 4
Specialist liability rules
Part 4-2
Pre-mining project interests
Division 140
Pre-mining profits and royalty credits
Section 140-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
142 Minerals Resource Rent Tax Bill 2011 No. , 2011
(b) pre-mining loss allowances (but not for the current year, because
1
the pre-mining profit precludes a pre-mining loss for the current
2
MRRT year);
3
(c) transferred pre-mining loss allowances;
4
(d) transferred mining loss allowances.
5
Note 2:
Paragraph (2)(e) precludes the entity from having any transferred
6
royalty allowances, and also precludes the pre-mining project interest
7
from being treated as combined with any mining project interest.
8
Example: An entity holds a pre-mining project interest that, in the 2015-16
9
MRRT year has a pre-mining profit of $50 million. It also has a
10
royalty credit for the MRRT year of $5 million, based on royalties
11
paid for resources the entity sold. The entity also holds another
12
pre-mining project interest that, in the MRRT year has a pre-mining
13
loss of $20 million.
14
The pre-mining profit is taken to be a mining profit of $50 million, but
15
the entity has a royalty allowance of $5 million and a transferred
16
pre-mining loss allowance of $20 million. Under section 10-5, the
17
entity's MRRT liability is:
18
22.5%
$50 million
$25 million
$5.625 million
×
-
=
19
However, the amount the entity must pay is reduced to zero by the low
20
profit offset under section 45-5.
21
140-15 Effect on allowance components for other mining project
22
interests
23
If:
24
(a) an entity's liability to pay MRRT in relation to a
*
pre-mining
25
project interest is worked out under section 140-10; and
26
(b) in working out the liability under that section, an
*
allowance
27
component is wholly or partly applied in relation to the
28
pre-mining project interest as if it were a mining project
29
interest;
30
the allowance component is taken, for the purposes of this Act, to
31
be applied to the same extent in relation to a mining project
32
interest.
33
Specialist liability rules Chapter 4
Pre-mining project interests Part 4-2
Pre-mining profits and royalty credits Division 140
Section 140-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 143
140-20 Treatment of pre-mining profits--mining project interest
1
originating from the pre-mining project interest
2
If
the
*
entity has a mining project interest that
*
originates, during
3
an
*
MRRT year, from a
*
pre-mining project interest for which the
4
entity has a
*
pre-mining profit for the MRRT year:
5
(a) the pre-mining profit is included in the entity's
*
mining
6
revenue of the mining project interest for the MRRT year;
7
and
8
(b) section 140-10 does not apply.
9
Example: A miner holds a pre-mining project interest that, in the 2015-16
10
MRRT year has a pre-mining profit of $10 million. During the MRRT
11
year, a mining project interest originates from the pre-mining project
12
interest. The mining revenue and mining expenditure for the mining
13
project interest are $60 million and $100 million respectively.
14
Under section 75-20, the miner's mining loss for the mining project
15
interest for the MRRT year is:
16
$100 million
$60 million
$10 million
$30 million
-
+
=
17
Subdivision 140-B--Pre-mining royalty credits
18
Table of sections
19
140-25
Pre-mining royalty credits
20
140-25 Pre-mining royalty credits
21
(1)
If
an
*
entity that
*
held the
*
pre-mining project interest at any time
22
incurred a liability that would, to any extent, have given rise, under
23
section 60-20, to a
*
royalty credit if:
24
(a) the pre-mining project interest were a mining project interest
25
that the entity had; and
26
(b)
the
*
exploration right to which the pre-mining project interest
27
relates were a
*
production right to which the mining project
28
interest relates; and
29
(c) in a case where the entity is not a miner--the entity were a
30
miner;
31
Chapter 4
Specialist liability rules
Part 4-2
Pre-mining project interests
Division 140
Pre-mining profits and royalty credits
Section 140-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
144 Minerals Resource Rent Tax Bill 2011 No. , 2011
treat the liability, to that extent, as giving rise to a royalty credit for
1
the pre-mining project interest.
2
(2) Work out the amount of the
*
royalty credit under Division 60 as if:
3
(a)
the
*
pre-mining project interest were a mining project interest
4
that the
*
entity had; and
5
(b) in a case where the entity is not a miner--the entity were a
6
miner.
7
Note:
Recoupment of amounts of pre-mining royalty credits may give rise to
8
an excess royalty recoupment mentioned in subsection 60-30(2) that
9
would be included in the entity's pre-mining revenue because of
10
subsection 70-40(2).
11
(3)
The
*
royalty credit arises at the time the
*
entity incurs the liability,
12
and relates to the
*
MRRT year in which it arises.
13
(4) To avoid doubt, a
*
royalty credit that arises for the
*
pre-mining
14
project interest for the
*
MRRT year cannot be applied in working
15
out a
*
transferred royalty allowance for a mining project interest
16
for any MRRT year.
17
18
Specialist liability rules Chapter 4
Pre-mining project interests Part 4-2
Transferring pre-mining project interests Division 145
Section 145-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 145
Division 145--Transferring pre-mining project interests
1
Guide to Division 145
2
145-1 What this Division is about
3
If a pre-mining project interest is transferred, in most respects the
4
new explorer takes over from the original explorer in relation to
5
MRRT matters.
6
Table of sections
7
Operative provisions
8
145-5
Object of this Division
9
145-10
Continuation of pre-mining project interest
10
145-15
Effects of pre-mining project transfer
11
145-20
Effect of transferred property
12
145-25
Events happening after pre-mining project transfer
13
145-30
Pre-mining project transfer when mining project interest originates
14
Operative provisions
15
145-5 Object of this Division
16
The object of this Division is to ensure that, if a
*
pre-mining
17
project interest is transferred:
18
(a) consistent with the MRRT being a project-based tax, matters
19
relevant to the MRRT that are connected with the interest
20
before the transfer remain connected with the interest after
21
the transfer; and
22
(b)
the
*
MRRT liability for the interest for the part of the
23
*
MRRT year before the transfer attaches to the explorer who
24
has the interest after the transfer, and not to the explorer who
25
had the interest before the transfer.
26
Chapter 4
Specialist liability rules
Part 4-2
Pre-mining project interests
Division 145
Transferring pre-mining project interests
Section 145-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
146 Minerals Resource Rent Tax Bill 2011 No. , 2011
145-10 Continuation of pre-mining project interest
1
(1)
The
*
pre-mining project interest (the new interest) that an
*
entity
2
(the new explorer)
*
holds just after a
*
pre-mining project transfer is
3
taken to be a continuation of the pre-mining project interest (the
4
original interest) an entity (the original explorer) held just before
5
the transfer.
6
Note:
This means, for example, that:
7
(a) the pre-mining project interest retains the history of when it
8
started, and of the entities who have held the interest at various
9
times; and
10
(b) a choice made, under Division 85, of the valuation approach for
11
the pre-mining project interest continues to have effect.
12
Meaning of pre-mining project transfer
13
(2)
A
pre-mining project transfer happens if:
14
(a)
an
*
arrangement that has the effect of transferring the whole
15
of the interest comprising a
*
pre-mining project interest from
16
one
*
entity to a single other entity comes into force; and
17
(b) the pre-mining project interest the other entity starts to
*
hold
18
covers the same
*
project area.
19
145-15 Effects of pre-mining project transfer
20
Liability for MRRT moves with interest
21
(1) Any MRRT that would otherwise be payable by the original
22
explorer in relation to a
*
pre-mining project interest, in relation to
23
the part of the
*
MRRT year before a
*
pre-mining project transfer
24
happens (the pre-transfer part year), is payable instead, in
25
accordance with this Division:
26
(a) by the new explorer; and
27
(b) in the MRRT year for the new explorer in which the transfer
28
happens.
29
Note 1:
The MRRT liability for the new explorer for the pre-mining project
30
interest is worked out in accordance with this Division. It may be
31
more, or less, than the liability the original explorer would have had,
32
Specialist liability rules Chapter 4
Pre-mining project interests Part 4-2
Transferring pre-mining project interests Division 145
Section 145-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 147
depending on circumstances such as choices, offsets and available
1
allowances.
2
Note 2:
For any period after the transfer that the new explorer has the interest,
3
its liability for MRRT (if any) is worked out under the ordinary rules.
4
MRRT amounts move with interest
5
(2) For the purposes of the application of the
*
MRRT law in the
6
*
MRRT year in which the transfer happens or a later MRRT year,
7
each of the following amounts that, apart from this Division, would
8
be an amount for the original explorer and the original interest is
9
instead an amount for the new explorer and the new interest:
10
(a) an amount included in
*
pre-mining revenue for the
11
pre-transfer part year or an earlier MRRT year;
12
(b) an amount included in
*
pre-mining expenditure for the
13
pre-transfer part year or an earlier MRRT year;
14
(c) an amount of a
*
royalty credit arising for the original interest
15
in the pre-transfer part year;
16
(d) an amount of an
*
allowance component arising in an earlier
17
MRRT year.
18
Note:
If the original explorer's MRRT year starts before the new explorer's
19
MRRT year, the effect of this provision is that amounts from before
20
the start of the new explorer's MRRT year are taken into account for
21
the new explorer in the new explorer's MRRT year.
22
Example: The original explorer has a substituted accounting period of 12 months
23
from 1 April to 31 March. The new explorer has an MRRT year of
24
1 July to 30 June. The transfer happens on 1 July. The amounts
25
covered by subsection (2) are all amounts that would be amounts for
26
the original explorer for the period from 1 April to 30 June, so these
27
will be amounts for the new explorer for its MRRT year 1 July to
28
30 June.
29
Choices to use the simplified MRRT method
30
(3) Despite subsection (2), in working out under that subsection an
31
amount for the
*
MRRT year in which the transfer happens or a
32
later MRRT year:
33
Chapter 4
Specialist liability rules
Part 4-2
Pre-mining project interests
Division 145
Transferring pre-mining project interests
Section 145-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
148 Minerals Resource Rent Tax Bill 2011 No. , 2011
(a) a choice under Division 200 to use the simplified MRRT
1
method for that year made by the new explorer is taken into
2
account; but
3
(b) a choice of that kind made by the original explorer is
4
disregarded.
5
Note:
The effect of a simplified MRRT method choice made for a year
6
before the transfer year is not affected: all allowance components are
7
extinguished (see Division 200).
8
Example: An original explorer had made no choices in the MRRT year in which
9
a pre-mining project transfer happens. The new explorer chooses to
10
use the simplified MRRT method.
11
The new explorer's MRRT liability for the pre-mining project interest
12
(and all other interests it has) is zero.
13
145-20 Effect of transferred property
14
(1) This section applies if:
15
(a) any property, or any legal or equitable right that is not
16
property, (the transferred property) is transferred to the new
17
explorer under the
*
pre-mining project transfer; and
18
(b) the original explorer used the transferred property in
19
*
pre-mining project operations for the
*
pre-mining project
20
interest; and
21
(c) the transferred property:
22
(i) gave rise to an amount of
*
pre-mining expenditure for
23
the original explorer, or another explorer who preceded
24
the original explorer, in relation to the pre-mining
25
project interest; or
26
(ii) is, or may become, a
*
starting base asset, in relation to a
27
mining project interest that
*
originates from the
28
pre-mining project interest.
29
(2) Despite section 30-40, no amount is included in the original
30
explorer's
*
pre-mining revenue for the
*
pre-mining project interest
31
in relation to any part of the consideration for the transfer that
32
relates to the transferred property.
33
Specialist liability rules Chapter 4
Pre-mining project interests Part 4-2
Transferring pre-mining project interests Division 145
Section 145-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 149
(3) For the new explorer, any part of the consideration for the transfer
1
that relates to the transferred property is taken, for the purposes of
2
section 35-35, to be expenditure relating to the acquisition of the
3
pre-mining project interest.
4
(4) To avoid doubt, the
*
pre-mining project transfer, and the transfer of
5
the transferred property, is not an event or circumstance giving rise
6
to an adjustment under Division 160.
7
Note:
Events or circumstances happening after the transfer may give rise to
8
adjustment under Division 160, for instance if the new explorer uses
9
the transferred property in relation to the pre-mining project interest to
10
a greater or lesser extent than the original explorer.
11
145-25 Events happening after pre-mining project transfer
12
(1) A thing that happens at a particular time in relation to an
*
entity
13
(the first entity) is taken instead to happen in relation to another
14
entity, and to have the effect mentioned in paragraph (c) in relation
15
to a
*
pre-mining project interest the other entity
*
holds, if:
16
(a) the other entity holds the interest at the time as a result of one
17
or more
*
pre-mining project transfers; and
18
(b) the first entity held the interest at an earlier time; and
19
(c) if the first entity still held the interest, the thing would affect
20
any of the following amounts (pre-mining amounts) for the
21
first entity:
22
(i)
*
pre-mining revenue;
23
(ii)
*
pre-mining expenditure;
24
(iii)
an
*
allowance component;
25
(iv)
a
*
rehabilitation tax offset.
26
(2) However, if one or more
*
pre-mining project splits has happened in
27
relation to the
*
pre-mining project interest in the period from when
28
the first
*
entity last
*
held the interest until the time the thing
29
happens:
30
(a) the thing is taken to happen in relation to the other entity in
31
relation to the interest; but
32
Chapter 4
Specialist liability rules
Part 4-2
Pre-mining project interests
Division 145
Transferring pre-mining project interests
Section 145-30
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
150 Minerals Resource Rent Tax Bill 2011 No. , 2011
(b) the extent to which the thing affects the other entity's
1
pre-mining amounts is reduced to reflect:
2
(i) if only one pre-mining project split happened in the
3
period--the
*
split percentage relating to that split; or
4
(ii) if 2 or more pre-mining project splits happened in the
5
period--a percentage worked out by multiplying the
6
split percentages for each of those splits.
7
Note:
The first entity is required to advise the other entity about the thing
8
that happens: see Division 121 in Schedule 1 to the Taxation
9
Administration Act 1953.
10
Example: After a pre-mining project transfer happens, the original explorer
11
makes an initial supply of taxable resources that would have given rise
12
to an amount of pre-mining revenue for the explorer if it still held the
13
interest. Instead, the new explorer is taken to have made the initial
14
supply, and includes the amount in pre-mining revenue for the
15
interest.
16
145-30 Pre-mining project transfer when mining project interest
17
originates
18
(1) If a single mining project interest
*
originates from a
*
pre-mining
19
project interest and relates to the whole of the
*
project area for the
20
pre-mining project interest:
21
(a) the origination is taken to be a
*
pre-mining project transfer;
22
and
23
(b) for the purposes of paragraph (a), the
*
MRRT law applies:
24
(i) in the same way in relation to the mining project interest
25
as it applies in relation to a pre-mining project interest
26
that exists after a pre-mining project transfer; and
27
(ii) in the same way in relation to the miner that has the
28
mining project interest just after it so originates as it
29
applies in relation to an
*
entity that
*
holds a pre-mining
30
project interest after a pre-mining project transfer.
31
(2) In applying this Division for the purposes of subsection (1),
32
disregard subsection 145-15(3).
33
Specialist liability rules Chapter 4
Pre-mining project interests Part 4-2
Transferring pre-mining project interests Division 145
Section 145-30
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 151
(3) If, because of the application of this Division, a mining project
1
interest has, for the part of the
*
MRRT year before it
*
originates
2
from a
*
pre-mining project interest:
3
(a)
*
pre-mining revenue that exceeds
*
pre-mining expenditure--
4
the excess is treated as
*
pre-mining profit of the pre-mining
5
project interest for the MRRT year; or
6
(b) pre-mining expenditure that exceeds pre-mining revenue--
7
the excess is treated as a
*
pre-mining loss of the pre-mining
8
project interest for the MRRT year.
9
Note:
For the treatment of pre-mining profits, see section 140-20. For the
10
treatment of pre-mining losses, see Divisions 70 and 95.
11
12
Chapter 4
Specialist liability rules
Part 4-2
Pre-mining project interests
Division 150
Splitting pre-mining project interests
Section 150-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
152 Minerals Resource Rent Tax Bill 2011 No. , 2011
Division 150--Splitting pre-mining project interests
1
150-1 Guide to Division 150
2
If a pre-mining project interest is split, in most respects the new
3
explorers take over from the original explorer in relation to MRRT
4
matters, each to an extent appropriate to their share in the split.
5
Table of sections
6
Operative provisions
7
150-5
Object of this Division
8
150-10
Continuation of pre-mining project interest
9
150-15
Effects of pre-mining project split
10
150-20
Effect of transferred property
11
150-25
Effect of MRRT liability from earlier years on rehabilitation tax offset
12
amounts
13
150-30
Events happening after pre-mining project split
14
150-35
Pre-mining project split when mining project interest originates
15
Operative provisions
16
150-5 Object of this Division
17
The object of this Division is to ensure that, if a
*
pre-mining
18
project interest is split:
19
(a) consistent with the MRRT being a project-based tax, matters
20
relevant to the MRRT that are connected with the interest
21
before the split remain connected (to the appropriate extents)
22
with the split interests after the split; and
23
(b)
the
*
MRRT liability for the interest for the part of the
24
*
MRRT year before the split attaches (to the appropriate
25
extents) to the explorers who have the split interests after the
26
split.
27
Specialist liability rules Chapter 4
Pre-mining project interests Part 4-2
Splitting pre-mining project interests Division 150
Section 150-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 153
150-10 Continuation of pre-mining project interest
1
(1)
Each
*
pre-mining project interest (a new interest) that an
*
entity (a
2
new explorer)
*
holds just after a
*
pre-mining project split is taken
3
to be a continuation of the pre-mining project interest (the original
4
interest) an entity (the original explorer) held just before the split.
5
Note:
This means, for example, that:
6
(a) each split interest retains the history of when the pre-mining
7
project interest started, and of the entities who have held the
8
interest at various times; and
9
(b) a choice made, under Division 85, of the valuation approach for
10
the pre-mining project interest continues to have effect.
11
Meaning of pre-mining project split
12
(2)
A
pre-mining project split happens if:
13
(a)
an
*
arrangement comes into force that has the effect of
14
transferring, from one
*
entity to 2 or more other entities, the
15
whole of a
*
pre-mining project interest; or
16
(b) an arrangement comes into force that has the effect of
17
transferring, from one entity to one or more other entities, a
18
part of a pre-mining project interest; or
19
(c)
under
an
*
Australian law, the
*
exploration right to which a
20
pre-mining project interest relates is split into 2 or more
21
exploration rights.
22
Note:
A new explorer may be the same entity as the original explorer, in the
23
situations described in paragraphs (b) and (c).
24
150-15 Effects of pre-mining project split
25
Liability for MRRT moves with interest
26
(1) Any MRRT that would otherwise be payable by the original
27
explorer in relation to a
*
pre-mining project interest in relation to
28
the part of the
*
MRRT year before a
*
pre-mining project split
29
happens (the pre-split part year) is payable instead, in accordance
30
with this Division:
31
(a) by each new explorer; and
32
Chapter 4
Specialist liability rules
Part 4-2
Pre-mining project interests
Division 150
Splitting pre-mining project interests
Section 150-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
154 Minerals Resource Rent Tax Bill 2011 No. , 2011
(b) in the MRRT year for a new explorer in which the split
1
happens.
2
Note 1:
The MRRT liability for each split interest is worked out in accordance
3
with this Division. The sum total of those liabilities may be more, or
4
less, than the liability the original explorer would have had, depending
5
on circumstances such as choices, offsets and available allowances.
6
Note 2:
For any period after the split that a new explorer has the interest, its
7
liability for MRRT (if any) is worked out under the ordinary rules.
8
MRRT amounts move with interest
9
(2) For the purposes of the application of the
*
MRRT law in the
10
*
MRRT year in which the split happens or a later MRRT year, each
11
of the following amounts that, apart from this Division, would be
12
an amount for the original explorer and the original interest is
13
instead, to the extent of a new interest's
*
split percentage, an
14
amount for the new explorer and the new interest:
15
(a) an amount included in
*
pre-mining revenue for the pre-split
16
part year or an earlier MRRT year;
17
(b) an amount included in
*
pre-mining expenditure for the
18
pre-split part year or an earlier MRRT year;
19
(c) an amount of a
*
royalty credit arising for the original interest
20
in the pre-split part year;
21
(d) an amount of an
*
allowance component for an earlier MRRT
22
year.
23
Choices to use the simplified MRRT method
24
(3) Despite subsection (2), in working out under that subsection an
25
amount for the
*
MRRT year in which the split happens or a later
26
MRRT year:
27
(a) a choice under Division 200 to use the simplified MRRT
28
method for that year made by the new explorer is taken into
29
account; but
30
(b) a choice of that kind made by the original explorer is
31
disregarded.
32
Specialist liability rules Chapter 4
Pre-mining project interests Part 4-2
Splitting pre-mining project interests Division 150
Section 150-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 155
Note 1:
The effect of a simplified MRRT method choice made for a year
1
before the split year is not affected: all allowance components are
2
extinguished (see Division 200).
3
Note 2:
If the original explorer's MRRT year starts before the new explorer's
4
MRRT year, the effect of this provision is that, in working out
5
amounts under subsection (2), a choice made by the new explorer for
6
the new explorer's MRRT year affects amounts from before the start
7
of that MRRT year.
8
Exception for new miner that is the same entity as original miner
9
(4) If a new explorer in relation to a
*
pre-mining project split is the
10
same entity as the original explorer, a choice that would otherwise
11
be disregarded under subsection (3) in working out an amount for
12
that new explorer is not disregarded.
13
Note:
This subsection does not affect the operation of subsection (3) for a
14
new explorer that is not the original explorer.
15
Meaning of split percentage
16
(5)
The
split percentage for a new interest an
*
entity
*
holds just after a
17
*
pre-mining project split is the percentage that best reflects a
18
reasonable approximation of the
*
market value of the new interest,
19
expressed as a percentage of the sum of the market values of all the
20
new interests arising from the split.
21
(6)
The
*
market values mentioned in subsection (5) are those values
22
just after the
*
pre-mining project split to which the new interest
23
relates.
24
(7) To avoid doubt, the sum of the
*
split percentages for the new
25
interests must equal 100%.
26
150-20 Effect of transferred property
27
(1) This section applies if:
28
(a) any property, or any legal or equitable right that is not
29
property, (the transferred property) is transferred to a new
30
explorer under the
*
pre-mining project split; and
31
Chapter 4
Specialist liability rules
Part 4-2
Pre-mining project interests
Division 150
Splitting pre-mining project interests
Section 150-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
156 Minerals Resource Rent Tax Bill 2011 No. , 2011
(b) the original explorer used the transferred property in
1
*
pre-mining project operations for the
*
pre-mining project
2
interest; and
3
(c) the transferred property:
4
(i) gave rise to an amount of
*
pre-mining expenditure for
5
the original explorer, or another explorer who preceded
6
the original explorer, in relation to the pre-mining
7
project interest; or
8
(ii) is, or may become, a
*
starting base asset, in relation to a
9
mining project interest that
*
originates from the
10
pre-mining project interest.
11
(2) Despite section 30-40, no amount is included in the original
12
explorer's
*
pre-mining revenue for the
*
pre-mining project interest
13
in relation to any part of the consideration for the transfer that
14
relates to the transferred property.
15
(3) For the new explorer, any part of the consideration for the transfer
16
that relates to the transferred property is taken, for the purposes of
17
section 35-35, to be expenditure relating to the acquisition of the
18
*
pre-mining project interest.
19
(4) To avoid doubt, the
*
pre-mining project split, and the transfer of
20
the transferred property, is not an event or circumstance giving rise
21
to an adjustment under Division 160.
22
Note:
Events or circumstances happening after the split may give rise to
23
adjustment under Division 160, for instance if the new explorer uses
24
the transferred property in relation to the pre-mining project interest to
25
a greater or lesser extent than the original explorer.
26
150-25 Effect of MRRT liability from earlier years on rehabilitation
27
tax offset amounts
28
For the purposes of section 225-20, only a proportion, worked out
29
on a reasonable basis, of an
*
MRRT liability, of the original
30
explorer or any other
*
entity, for the
*
pre-mining project interest
31
for an
*
MRRT year before the year in which a
*
pre-mining project
32
Specialist liability rules Chapter 4
Pre-mining project interests Part 4-2
Splitting pre-mining project interests Division 150
Section 150-30
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 157
split happens, is taken to have been paid in relation to a new
1
interest.
2
Note:
The original explorer is required to give the new explorer the
3
information it needs to work out the amount of a rehabilitation offset:
4
see Division 121 in Schedule 1 to the Taxation Administration Act
5
1953.
6
150-30 Events happening after pre-mining project split
7
(1) A thing that happens at a time in relation to an
*
entity (the first
8
entity) is taken instead to happen in relation to another entity, and
9
to have the effect mentioned in paragraph (c) in relation to a
10
*
pre-mining project interest the other entity
*
holds, if:
11
(a) the other entity holds the interest at the time as a result of one
12
or more
*
pre-mining project splits; and
13
(b) the first entity held the interest at an earlier time; and
14
(c) if the first entity still held the interest, the thing would affect
15
any of the following amounts (pre-mining amounts) for the
16
first entity:
17
(i)
*
pre-mining revenue;
18
(ii)
*
pre-mining expenditure;
19
(iii)
an
*
allowance component;
20
(iv)
a
*
rehabilitation tax offset.
21
(2) However, the extent to which the thing affects the other entity's
22
pre-mining amounts is reduced to reflect:
23
(a) if only one
*
pre-mining project split happened in the period
24
from when the first entity last
*
held the interest until the time
25
the thing happens--the
*
split percentage relating to that split;
26
or
27
(b) if 2 or more pre-mining project splits happened in the
28
period--a percentage worked out by multiplying the split
29
percentages for each of those splits.
30
Note 1:
The first entity is required to advise the other entity about the thing
31
that happens: see Division 121 in Schedule 1 to the Taxation
32
Administration Act 1953.
33
Chapter 4
Specialist liability rules
Part 4-2
Pre-mining project interests
Division 150
Splitting pre-mining project interests
Section 150-35
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
158 Minerals Resource Rent Tax Bill 2011 No. , 2011
Note 2:
A mining project transfer may also have happened in the period, but
1
will not affect the extent worked out under subsection (2).
2
Example: After a pre-mining project split happens, the original explorer makes
3
an initial supply of taxable resources that would have given rise to an
4
amount of pre-mining revenue for the explorer if it still held the
5
interest. Instead, each new explorer is taken to have made the initial
6
supply, and includes its split percentage of the amount in pre-mining
7
revenue for the interest.
8
150-35 Pre-mining project split when mining project interest
9
originates
10
(1) If, just after a mining project interest
*
originates from a
11
*
pre-mining project interest, there are 2 or more interests (whether
12
mining project interests or pre-mining project interests) (the new
13
interests) relating to the
*
project area for the pre-mining project
14
interest:
15
(a) the origination is taken to be a
*
pre-mining project split; and
16
(b) for the purposes of paragraph (a), the
*
MRRT law applies:
17
(i) in the same way in relation to each new interest
18
(whether it is a pre-mining project interest or a mining
19
project interest) as it applies in relation to a pre-mining
20
project interest that exists after a pre-mining project
21
split; and
22
(ii) in the same way in relation to each
*
entity that
*
holds a
23
new interest as it applies in relation to an entity that
24
holds a pre-mining project interest after a pre-mining
25
project split.
26
(2) If, because of the application of this Division, a mining project
27
interest has, for the part of the
*
MRRT year before it
*
originates
28
from a
*
pre-mining project interest:
29
(a)
*
pre-mining revenue that exceeds
*
pre-mining expenditure--
30
the excess is treated as
*
pre-mining profit of the pre-mining
31
project interest for the MRRT year; or
32
(b) pre-mining expenditure that exceeds pre-mining revenue--
33
the excess is treated as a
*
pre-mining loss of the pre-mining
34
project interest for the MRRT year.
35
Specialist liability rules Chapter 4
Pre-mining project interests Part 4-2
Splitting pre-mining project interests Division 150
Section 150-35
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 159
Note:
For the treatment of pre-mining profits, see section 140-20. For the
1
treatment of pre-mining losses, see Divisions 70 and 95.
2
3
Chapter 4
Specialist liability rules
Part 4-2
Pre-mining project interests
Division 155
Ending pre-mining project interests
Section 155-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
160 Minerals Resource Rent Tax Bill 2011 No. , 2011
Division 155--Ending pre-mining project interests
1
Guide to Division 155
2
155-1 What this Division is about
3
The last entity to have a particular pre-mining project interest is
4
treated, for the purpose of accounting for MRRT, as continuing to
5
have the pre-mining project interest after the termination day.
6
Table of sections
7
Operative provisions
8
155-5
The termination day for a pre-mining project interest
9
155-10
The effect of renewing or changing exploration rights
10
155-15
The effect of pre-mining project transfers and pre-mining project splits
11
155-20
Continuation of obligations etc. after the termination day
12
155-25
Extinguishing allowance components
13
Operative provisions
14
155-5 The termination day for a pre-mining project interest
15
The
termination day for a
*
pre-mining project interest is the day on
16
which there is no longer any
*
entity that
*
holds the pre-mining
17
project interest.
18
Note:
For when an entity holds a pre-mining project interest, see
19
Division 250.
20
155-10 The effect of renewing or changing exploration rights
21
(1) A change in, or a renewal of, the
*
exploration right to which a
22
*
pre-mining project interest relates does not cause the
*
termination
23
day for the pre-mining project interest to happen.
24
(2) However, if the change in, or the renewal of, the
*
exploration right
25
results in the exploration right covering an additional area:
26
Specialist liability rules Chapter 4
Pre-mining project interests Part 4-2
Ending pre-mining project interests Division 155
Section 155-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 161
(a)
the
*
project area for the
*
pre-mining project interest does not
1
include that additional area, unless the additional area is
2
insignificant; and
3
(b) to avoid doubt, the additional area is the project area for
4
another pre-mining project interest, unless the additional area
5
is insignificant.
6
(3) In determining, for the purposes of subsection (2), whether an
7
additional area is insignificant, assume that the additional area
8
includes any other such additional areas that:
9
(a) have been included in the
*
project area for the
*
pre-mining
10
project interest because of a previous application of
11
subsection (2); and
12
(b) have not, because of a previous application of this subsection,
13
prevented another additional area being included in that
14
project area.
15
155-15 The effect of pre-mining project transfers and pre-mining
16
project splits
17
A
*
pre-mining project transfer or a
*
pre-mining project split
18
relating to a
*
pre-mining project interest does not cause the
19
*
termination day for the pre-mining project interest to happen.
20
Note 1:
Under section 145-10, the pre-mining project interest after a
21
pre-mining project transfer is a continuation of the pre-mining project
22
interest before the transfer.
23
Note 2:
Under section 150-10, the pre-mining project interests after a
24
pre-mining project split are a continuation of the pre-mining project
25
interest before the split.
26
155-20 Continuation of obligations etc. after the termination day
27
(1)
After
the
*
termination day for a
*
pre-mining project interest, the
28
last
*
entity to have
*
held the pre-mining project interest is taken,
29
for the purposes of the
*
MRRT law, to continue to hold the
30
pre-mining project interest:
31
(a) for the whole of the remainder of the
*
MRRT year in which
32
the termination day happens; and
33
Chapter 4
Specialist liability rules
Part 4-2
Pre-mining project interests
Division 155
Ending pre-mining project interests
Section 155-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
162 Minerals Resource Rent Tax Bill 2011 No. , 2011
(b) for the whole of any later MRRT year.
1
(2) This section does not apply if the
*
termination day happens
2
because a mining project interest
*
originates from the
*
pre-mining
3
project interest.
4
155-25 Extinguishing allowance components
5
(1)
If
the
*
termination day for a
*
pre-mining project interest happens in
6
a particular
*
MRRT year, an
*
allowance component relating to the
7
pre-mining project interest:
8
(a) is extinguished if it relates to that MRRT year or an earlier
9
MRRT year, except to the extent that it is applied in working
10
out, for that MRRT year:
11
(i) in relation to the pre-mining project interest, an amount,
12
for the purposes of section 140-10, corresponding to an
13
*
MRRT allowance; or
14
(ii) an MRRT allowance for any mining project interest;
15
and
16
(b) is extinguished if it relates to a later MRRT year, except to
17
the extent that it is applied in working out, for that later
18
MRRT year:
19
(i) in relation to the pre-mining project interest, an amount,
20
for the purposes of section 140-10, corresponding to an
21
*
MRRT allowance; or
22
(ii) an MRRT allowance for any mining project interest.
23
(2) This section does not apply if the
*
termination day happens
24
because a mining project interest
*
originates from the
*
pre-mining
25
project interest.
26
27
Specialist liability rules Chapter 4
Adjusting MRRT liabilities Part 4-3
Adjustments to revenue and expenditure of project interests Division 160
Section 160-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 163
Part 4-3--Adjusting MRRT liabilities
1
Division 160--Adjustments to revenue and expenditure of
2
project interests
3
Guide to Division 160
4
160-1 What this Division is about
5
If there is a change in the circumstances affecting the amount of a
6
previous item of mining revenue, mining expenditure, pre-mining
7
revenue or pre-mining expenditure, an adjustment may be made so
8
that, in net terms, the correct result is achieved.
9
Table of sections
10
Operative provisions
11
160-5
Object of this Division
12
160-10 Mining
adjustments
13
160-15
Effect of mining adjustments on mining revenue, mining expenditure etc.
14
Operative provisions
15
160-5 Object of this Division
16
The object of this Division is to ensure that an appropriate
17
adjustment is made to:
18
(a)
*
mining revenue or
*
mining expenditure if there is a change
19
in the circumstances determining the amount of a previous
20
item of mining revenue or mining expenditure for a mining
21
project interest; or
22
(b)
*
pre-mining revenue or
*
pre-mining expenditure if there is a
23
change in the circumstances determining the amount of a
24
previous item of pre-mining revenue or pre-mining
25
expenditure for a
*
pre-mining project interest.
26
Chapter 4
Specialist liability rules
Part 4-3
Adjusting MRRT liabilities
Division 160
Adjustments to revenue and expenditure of project interests
Section 160-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
164 Minerals Resource Rent Tax Bill 2011 No. , 2011
160-10 Mining adjustments
1
(1) An event or circumstance gives rise to an adjustment under this
2
Division (a mining adjustment) for the
*
MRRT year in which the
3
event or circumstance happens if:
4
(a) due to assumptions or estimates that were made, the event or
5
circumstance was not taken into account in relation to the
6
inclusion (or non-inclusion) of an amount (the original
7
amount) in:
8
(i)
*
mining revenue or
*
mining expenditure for a mining
9
project interest; or
10
(ii)
*
pre-mining revenue or
*
pre-mining expenditure for a
11
*
pre-mining project interest; and
12
(b) it becomes more likely than not that those assumptions or
13
estimates are incorrect; and
14
(c) taking the event or circumstance into account, as if they
15
formed part of the circumstances that gave rise to the original
16
amount, would have led to a different result in relation to the
17
original amount.
18
Note:
Subsection 160-15(3) modifies the application of this section if a
19
previous adjustment has been made under this Division in relation to
20
the original amount.
21
(2) The amount of the mining adjustment is the amount of that
22
difference.
23
(3) Without limiting subsection (1), the event or circumstance may be:
24
(a) a change in the extent to which an asset is used for a
25
particular purpose; or
26
(b) the whole or part of a debt being written off as bad, or the
27
whole or part of an amount written off as bad being
28
recovered.
29
(4) Without limiting subsection (1), the amount of the mining
30
adjustment may be greater than the original amount.
31
Example: An original amount of $48 million is included in a miner's mining
32
expenditure for an MRRT year. If, taking into account a circumstance
33
or event that happens in a later MRRT year, the original amount
34
Specialist liability rules Chapter 4
Adjusting MRRT liabilities Part 4-3
Adjustments to revenue and expenditure of project interests Division 160
Section 160-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 165
would have instead been an amount of $12 million included in the
1
miner's mining revenue for the MRRT year, the difference is $60
2
million.
3
160-15 Effect of mining adjustments on mining revenue, mining
4
expenditure etc.
5
(1) The table has effect for the
*
MRRT year in which the mining
6
adjustment arises:
7
8
Effect of mining adjustments
Item Column
1
If the original amount
was an amount
included (or not
included) in:
Column 2
... and if the
circumstance or event
was taken into
account in working
out the original
amount, it would:
Column 3
The mining
adjustment is
included in:
1
*
mining revenue for a
mining project interest
increase
mining revenue for that
interest
2
*
mining revenue for a
mining project interest
decrease
*
mining expenditure
for that interest
3
*
mining expenditure
for a mining project
interest
increase mining
expenditure
for
that interest
4
*
mining expenditure
for a mining project
interest
decrease
*
mining revenue for
that interest
5
*
pre-mining revenue
for a
*
pre-mining
project interest
increase
pre-mining revenue for
that interest
6
*
pre-mining revenue
for a
*
pre-mining
project interest
decrease
*
pre-mining
expenditure for that
interest
7
*
pre-mining
expenditure for a
increase pre-mining
expenditure
for that interest
Chapter 4
Specialist liability rules
Part 4-3
Adjusting MRRT liabilities
Division 160
Adjustments to revenue and expenditure of project interests
Section 160-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
166 Minerals Resource Rent Tax Bill 2011 No. , 2011
Effect of mining adjustments
Item Column
1
If the original amount
was an amount
included (or not
included) in:
Column 2
... and if the
circumstance or event
was taken into
account in working
out the original
amount, it would:
Column 3
The mining
adjustment is
included in:
*
pre-mining project
interest
8
*
pre-mining
expenditure for a
*
pre-mining project
interest
decrease
*
pre-mining revenue
for that interest
Example 1: In MRRT year 1, a miner incurs expenditure of $100 million on some
1
machinery that the miner expects to use to the extent of 40% in the
2
upstream mining operations of a mining project interest for each of 5
3
years, after which the machinery will be sold. On this basis, $40
4
million is included in the miner's mining expenditure for the mining
5
project interest for MRRT year 1.
6
In MRRT year 2, the miner's use of the machinery in those operations
7
increases to 50%, and the miner expects that extent of use to continue
8
for the rest of the 5 years. As a result, the extent to which the
9
expenditure relates to the interest increases to 48%. Accordingly, a
10
further $8 million is included in the miner's mining expenditure for
11
the interest for MRRT year 2.
12
Example 2: In MRRT year 1, the miner incurs expenditure of $100 million on
13
some machinery, which the miner expects to use for 4 years, but does
14
not expect to use to any extent in the upstream mining operations of a
15
mining project interest. Therefore, none of the expenditure is included
16
in the miner's mining expenditure for the mining project interest for
17
MRRT year 1.
18
In MRRT year 3, the miner starts to use the machinery to the extent of
19
10% in those operations, and expects that extent of use to continue
20
until the end of 4 years. As a result, an amount of $5 million is
21
included in the miner's mining expenditure for the mining project
22
interest for MRRT year 3: 10% × 2/4 × $100 million.
23
Specialist liability rules Chapter 4
Adjusting MRRT liabilities Part 4-3
Adjustments to revenue and expenditure of project interests Division 160
Section 160-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 167
(2) However, for the purposes of items 5, 6, 7 and 8 of the table, if a
1
mining project interest that
*
originates from the
*
pre-mining
2
project interest exists, the mining adjustment is instead included:
3
(a) in the circumstances specified in item 5 or 8 of the table--in
4
the
*
mining revenue of the mining project interest; or
5
(b) in the circumstances specified in item 6 or 7 of the table--in
6
the
*
mining expenditure of the mining project interest.
7
(3) If this Division has given rise to a mining adjustment in relation to
8
the original amount then, in working out whether a later event or
9
circumstance gives rise to an adjustment under this Division in
10
relation to the original amount, this Division has effect as if:
11
(a) the adjustment mentioned in column 3 of the table in
12
subsection (1) had not been made; and
13
(b) the original amount had instead been increased or decreased
14
(as the case requires) as mentioned in column 2 of that table
15
by the amount of the adjustment.
16
(4) If, apart from this subsection, the original amount:
17
(a) would be included in the
*
mining revenue or
*
mining
18
expenditure for a mining project interest, or in the
19
*
pre-mining revenue or
*
pre-mining expenditure for a
20
*
pre-mining project interest; and
21
(b) under paragraph (3)(b), would be a negative amount;
22
the original amount is instead taken to be a positive amount
23
included in the mining expenditure or mining revenue of the
24
mining project interest, or in the pre-mining expenditure or
25
pre-mining revenue of the pre-mining project interest, as the case
26
requires.
27
28
Chapter 4
Specialist liability rules
Part 4-3
Adjusting MRRT liabilities
Division 165
Starting base adjustments
Section 165-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
168 Minerals Resource Rent Tax Bill 2011 No. , 2011
Division 165--Starting base adjustments
1
Table of Subdivisions
2
Guide to Division 165
3
165-A Starting base adjustment events and starting base adjustment
4
amounts
5
165-B General rules for starting base adjustments
6
165-C Partial disposal of starting base assets
7
165-D Miscellaneous
8
Guide to Division 165
9
165-1 What this Division is about
10
If a starting base asset ceases to be part of a miner's starting base
11
(for example, because the miner disposes of it), there may be a
12
need to reconcile declines in value of the asset (reflected in starting
13
base losses) with the actual change in value of the asset.
14
The appropriate starting base loss is adjusted to achieve this
15
reconciliation. However, in some cases an additional amount will
16
be included in a miner's mining revenue.
17
Subdivision 165-A--Starting base adjustment events and
18
starting base adjustment amounts
19
Table of sections
20
165-5
Starting base adjustment events
21
165-10
Starting base adjustment amounts
22
165-15
Reductions in declines in value of starting base assets
23
165-5 Starting base adjustment events
24
(1)
A
starting base adjustment event happens for a
*
starting base asset
25
relating to a mining project interest that a miner has if:
26
Specialist liability rules Chapter 4
Adjusting MRRT liabilities Part 4-3
Starting base adjustments Division 165
Section 165-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 169
(a) the miner ceases to
*
hold the asset; or
1
(b)
the
miner:
2
(i) stops using it, having it
*
installed ready for use or
3
constructing it for use, in carrying on
*
upstream mining
4
operations relating to the mining project interest; and
5
(ii) expects never to use it, never to have it installed ready
6
for use or never to restart constructing it for use, again
7
in carrying on upstream mining operations relating to
8
the mining project interest; or
9
(c)
the
miner:
10
(i) has not so used it; and
11
(ii) decides never so to use it; and
12
(iii) if it has been so installed--stops having it so installed;
13
and
14
(iv) if it is being so constructed for use--stops so
15
constructing it;
16
in carrying on upstream mining operations relating to the
17
mining project interest.
18
(2) However, a starting base adjustment event does not happen for a
19
*
starting base asset that:
20
(a) is, or includes, the rights and interests constituting the mining
21
project interest; or
22
(b) is an asset that the miner transfers to another entity together
23
with such rights and interests.
24
165-10 Starting base adjustment amounts
25
Termination value exceeding adjustable value
26
(1)
If:
27
(a)
during
an
*
MRRT year, a
*
starting base adjustment event
28
happens for a
*
starting base asset relating to a mining project
29
interest; and
30
(b)
the
*
termination value of the asset exceeds its
*
adjustable
31
value just before the event happened;
32
Chapter 4
Specialist liability rules
Part 4-3
Adjusting MRRT liabilities
Division 165
Starting base adjustments
Section 165-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
170 Minerals Resource Rent Tax Bill 2011 No. , 2011
there is a starting base adjustment amount, for the asset for the
1
MRRT year, equal to the difference between the termination value
2
and the adjustable value.
3
Note:
A starting base adjustment amount under this subsection can be
4
reduced under section 165-15.
5
Termination value less than adjustable value
6
(2)
If:
7
(a)
during
an
*
MRRT year, a
*
starting base adjustment event
8
happens for a
*
starting base asset relating to a mining project
9
interest; and
10
(b)
the
*
termination value of the asset is less than its
*
adjustable
11
value just before the event happened;
12
there is a starting base adjustment amount, for the asset for the
13
MRRT year, equal to the difference between the adjustable value
14
and the termination value.
15
Note:
A starting base adjustment amount under this subsection can be
16
reduced under section 165-15.
17
Termination value
18
(3)
The
termination value of a
*
starting base asset for which a
19
*
starting base adjustment event has happened is:
20
(a) if the miner to whose mining project interest the asset relates
21
has received, because of the event, an amount for the asset
22
under a transaction entered into at
*
arm's length--that
23
amount; or
24
(b)
otherwise--the
*
market value of the asset at the time the
25
starting base adjustment event happened.
26
(4)
However,
the
termination value of the asset is the sum of the
27
following, if that sum is greater than its termination value under
28
subsection (3):
29
(a)
any
*
mining expenditure the miner incurs because of the
30
*
starting base adjustment event;
31
Specialist liability rules Chapter 4
Adjusting MRRT liabilities Part 4-3
Starting base adjustments Division 165
Section 165-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 171
(b) any amounts by which such expenditure would have been
1
greater but for one or more amounts that are received, or
2
become receivable, by the miner.
3
(5) If all or part of a liability of the miner to pay an amount relating to
4
the asset is terminated, the amount of the liability or part when it is
5
terminated is taken, for the purposes of this section, to be received
6
or to become receivable by the miner in relation to the asset.
7
(6) If a miner receives an amount for 2 or more things that include a
8
*
starting base adjustment event happening for a
*
starting base asset,
9
take into account as its
*
termination value only that part of what
10
the miner received that is reasonably attributable to the asset.
11
Adjustable value
12
(7)
The
adjustable value of a
*
starting base asset for which a
*
starting
13
base adjustment event has happened is the difference between:
14
(a)
the
*
base value of the asset for the
*
MRRT year in which the
15
event happened; and
16
(b) an amount equal to what would be the decline in value of the
17
asset, worked out under section 90-5, during the period
18
starting at the start of that year and ending on the day on
19
which the event happened, if that period were an MRRT
20
year.
21
165-15 Reductions in declines in value of starting base assets
22
(1)
If:
23
(a) there is a
*
starting base adjustment amount, for a
*
starting
24
base asset for an
*
MRRT year; and
25
(b) an amount of a
*
starting base loss for that MRRT year or any
26
earlier MRRT year has been reduced because of a reduction
27
under subsection 80-40(3) or (4) relating to the asset;
28
reduce the starting base adjustment amount in accordance with
29
subsection (2).
30
Note:
Reductions happen under subsection 80-40(3) or (4) if the asset is
31
used, installed for use, or constructed for use for a purpose other than
32
Chapter 4
Specialist liability rules
Part 4-3
Adjusting MRRT liabilities
Division 165
Starting base adjustments
Section 165-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
172 Minerals Resource Rent Tax Bill 2011 No. , 2011
carrying on upstream mining operations relating to the mining project
1
interest, or in connection with excluded expenditure.
2
(2) The reduction is:
3
Sum of reductions
*Starting base adjustment amount
Total decline
×
4
where:
5
sum of reductions is the sum of the reductions made relating to the
6
asset under subsections 80-40(3) and (4) during that
*
MRRT year
7
or any earlier MRRT year.
8
total decline is the sum of the declines in value of the asset that
9
have happened during that
*
MRRT year or any earlier MRRT year.
10
Subdivision 165-B--General rules for starting base
11
adjustments
12
Table of sections
13
165-20
Starting base adjustments
14
165-25
The effect of starting base adjustments on starting base losses
15
165-30
The effect of negative starting base adjustments on mining revenue
16
165-20 Starting base adjustments
17
(1) If there is, for an
*
MRRT year, at least one
*
starting base
18
adjustment amount for a
*
starting base asset relating to a mining
19
project interest, the starting base adjustment for the mining project
20
interest for the MRRT year is the amount obtained by subtracting:
21
(a) all of those starting base adjustment amounts (if any) arising
22
under subsection 165-10(1); from
23
(b) all of those starting base adjustment amounts (if any) arising
24
under subsection 165-10(2).
25
(2)
The
*
starting base adjustment may be a negative amount, but there
26
is no starting base adjustment if the amount worked out under
27
subsection (1) is zero.
28
Specialist liability rules Chapter 4
Adjusting MRRT liabilities Part 4-3
Starting base adjustments Division 165
Section 165-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 173
165-25 The effect of starting base adjustments on starting base losses
1
Positive starting base adjustments
2
(1)
If:
3
(a) there is a
*
starting base adjustment, for a mining project
4
interest for an
*
MRRT year, that is a positive amount; and
5
(b) there is a
*
starting base loss for the mining project interest for
6
the MRRT year;
7
the starting base loss is increased by the starting base adjustment.
8
(2)
If:
9
(a) there is a
*
starting base adjustment, for a mining project
10
interest for an
*
MRRT year, that is a positive amount; and
11
(b) there is (apart from this subsection) no
*
starting base loss for
12
the mining project interest for the MRRT year;
13
there is taken to be such a starting base loss equal to the starting
14
base adjustment.
15
Negative starting base adjustments
16
(3)
If:
17
(a) there is a
*
starting base adjustment, for a mining project
18
interest for an
*
MRRT year, that is a negative amount; and
19
(b) there are one or more
*
starting base losses for the mining
20
project interest;
21
the starting base loss, or one or more of the starting base losses, are
22
reduced by the starting base adjustment.
23
(4) If there is more than one
*
starting base loss, the starting base
24
adjustment is applied to reduce the starting base losses in the order
25
in which they arose.
26
Note:
The amount by which that starting base adjustment exceeds all the
27
starting base losses is included in mining revenue under subsection
28
165-30(2).
29
Chapter 4
Specialist liability rules
Part 4-3
Adjusting MRRT liabilities
Division 165
Starting base adjustments
Section 165-30
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
174 Minerals Resource Rent Tax Bill 2011 No. , 2011
165-30 The effect of negative starting base adjustments on mining
1
revenue
2
(1)
If:
3
(a) there is a
*
starting base adjustment, for a mining project
4
interest for an
*
MRRT year, that is a negative amount; and
5
(b)
there
are
no
*
starting base losses for the mining project
6
interest;
7
the starting base adjustment is included in the
*
mining revenue, for
8
the mining project interest for the MRRT year, of the miner that
9
has the mining project interest.
10
(2)
If:
11
(a) there is a
*
starting base adjustment, for a mining project
12
interest for an
*
MRRT year, that is a negative amount; and
13
(b) there are one or more
*
starting base losses for the mining
14
project interest; and
15
(c) the starting base adjustment is greater than the sum of those
16
starting base losses;
17
an amount equal to the difference between the starting base
18
adjustment and the sum of those starting base losses is included in
19
the
*
mining revenue, for the mining project interest for the MRRT
20
year, of the miner that has the mining project interest.
21
Subdivision 165-C--Partial disposal of starting base assets
22
Table of sections
23
165-35
Starting base adjustments for partial disposal of starting base assets
24
165-40
Declines in value of retained parts of starting base assets
25
165-45
Reductions in starting base losses
26
165-50
Base value for the next MRRT year
27
165-35 Starting base adjustments for partial disposal of starting
28
base assets
29
(1)
If:
30
Specialist liability rules Chapter 4
Adjusting MRRT liabilities Part 4-3
Starting base adjustments Division 165
Section 165-40
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 175
(a)
during
an
*
MRRT year, a miner ceases to
*
hold a part of a
1
*
starting base asset relating to a mining project interest that a
2
miner has; and
3
(b) the cessation would be a
*
starting base adjustment event if
4
the part were a starting base asset;
5
apply this Division as if that part were a starting base asset (the
6
disposed asset) and as if the cessation were a starting base
7
adjustment event for the disposed asset.
8
(2)
The
adjustable value of the disposed asset is a reasonable
9
proportion of what would be the adjustable value of the
*
starting
10
base asset of which it is a part, if a
*
starting base adjustment event
11
were to happen for that starting base asset at the time of the
12
cessation.
13
Example: A miner holds a truck that, at the start of a particular MRRT year, has
14
a base value of $10 million and a remaining effective life of 10 years.
15
Halfway through the MRRT year, the miner sells a 75% interest in the
16
truck for $6 million.
17
At the time of the sale, the adjustable value of the entire truck is $9.5
18
million, so the adjustable value of the disposed asset is $7.125 million
19
(75% of $9.5 million). The termination value of the disposed asset is
20
$6 million.
21
Under subsection 165-10(2), the miner has a starting base adjustment
22
amount for the truck of $1.125 million ($7.125 million - $6 million).
23
(3) Despite subsection (1), this section does not apply to the disposed
24
asset if at the same time as the miner ceases to
*
hold the disposed
25
asset, the miner also ceases to hold the remainder of the
*
starting
26
base asset.
27
165-40 Declines in value of retained parts of starting base assets
28
(1) The decline in value of a
*
starting base asset during an
*
MRRT
29
year (an entire MRRT year) in which section 165-35 applies in
30
relation to a miner ceasing to
*
hold a part of the starting base asset
31
is worked out by:
32
(a) working out under section 90-5 the decline in value of the
33
asset, as if the part of the MRRT year before the cessation
34
were an MRRT year; and
35
Chapter 4
Specialist liability rules
Part 4-3
Adjusting MRRT liabilities
Division 165
Starting base adjustments
Section 165-40
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
176 Minerals Resource Rent Tax Bill 2011 No. , 2011
(b) working out under section 90-5 the decline in value of the
1
asset, as if the part of the MRRT year after the cessation were
2
another MRRT year; and
3
(c) summing the result.
4
Example: Using the example in subsection 165-35(2), the decline in value of the
5
truck during the MRRT year is $625,000, being the sum of:
6
(a) for the half of the MRRT year that precedes the cessation, a
7
decline in value of $500,000 ($10 million x
1
/
2
x
1
/
10
); and
8
(b) for the remainder of the MRRT year, a decline in value of
9
$125,000 (($9.5 million - $7.125 million) x
1
/
2
x
1
/
9.5
).
10
(2) In working out, under paragraph (1)(b), the decline in value of a
11
*
starting base asset after a cessation, the
*
base value of the starting
12
base asset:
13
(a) is worked out:
14
(i) as if the part of the
*
MRRT year that is taken by
15
paragraph (1)(a) to be an MRRT year were the
16
preceding MRRT year; and
17
(ii) if the base value is worked out under section 90-30--as
18
if the uplift factor mentioned in that section were 1; and
19
(b) is reduced by the
*
adjustable value of the disposed asset for
20
that cessation.
21
(3)
If:
22
(a) section 165-35 applies in relation to a miner ceasing to
*
hold
23
a part of a
*
starting base asset; and
24
(b) that cessation happens during a part of an
*
MRRT year that,
25
because of a previous application of this section (including an
26
application affected by this subsection) in relation to the
27
same starting base asset, is taken by paragraph (1)(b) to be an
28
MRRT year;
29
in working out, under paragraph (1)(b), the decline in value of the
30
starting base asset during that part of an MRRT year, apply
31
subsection (1) to that part of the MRRT year as if it were an entire
32
MRRT year.
33
Example: Extending the example in subsection (1), the miner sells half of its
34
remaining interest in the truck halfway through the second half of the
35
MRRT year. At the time of this sale, the adjustable value of the
36
Specialist liability rules Chapter 4
Adjusting MRRT liabilities Part 4-3
Starting base adjustments Division 165
Section 165-45
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 177
miner's 25% interest in the truck is $2,312,500, so the adjustable
1
value of the disposed asset on this occasion is $1,156,250 (50% of
2
$2,312,500).
3
The decline in value of the miner's interest in the truck during the
4
second half of the MRRT year is $93,750, being the sum of:
5
(a) for the first 3 months of the second half of the MRRT year, a
6
decline in value of $62,500 ($2.375 million x
1
/
4
x
1
/
9.5
); and
7
(b) for the remainder of the second half of the MRRT year, a decline
8
in value of $31,250 ($1,156,250 x
1
/
4
x
1
/
9.25
).
9
(4)
If:
10
(a) under Division 85, the book value approach is the valuation
11
approach for the mining project interest to which a
*
starting
12
base asset relates; and
13
(b) the decline in value of the starting base asset during a part of
14
an
*
MRRT year is to be worked out under this section;
15
the write off rate of the starting base asset under section 90-10 for
16
that part of the MRRT year is taken to be the write off rate of the
17
starting base asset under that section for the entire MRRT year.
18
165-45 Reductions in starting base losses
19
(1) This section applies if, on one or more occasions during an
*
MRRT
20
year, section 165-35 applies to a miner ceasing to
*
hold a part of a
21
*
starting base asset relating to a mining project interest that a miner
22
has.
23
(2) In working out under subsection 80-40(3) or (4) any reduction in
24
an amount of a
*
starting base loss for the mining project interest for
25
the
*
MRRT year or a later MRRT year, treat the starting base asset
26
as not including, after the cessation, the disposed asset (within the
27
meaning of section 165-35) relating to that cessation.
28
Note:
Reductions happen under subsection 80-40(3) or (4) if the asset is
29
used, installed for use, or constructed for use for a purpose other than
30
carrying on upstream mining operations relating to the mining project
31
interest, or in connection with excluded expenditure.
32
Example: Using the example in subsection 165-40(1), the miner's starting base
33
loss would be unaffected if, after the sale of the 75% interest in the
34
truck, the purchaser used the truck for 75% of the time for a purpose
35
Chapter 4
Specialist liability rules
Part 4-3
Adjusting MRRT liabilities
Division 165
Starting base adjustments
Section 165-50
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
178 Minerals Resource Rent Tax Bill 2011 No. , 2011
that is entirely unrelated to the upstream mining operations for the
1
mining project interest.
2
165-50 Base value for the next MRRT year
3
Section 90-30 or 90-50 applies in working out the
*
base value of
4
the
*
starting base asset for the next
*
MRRT year as if the last part
5
of the entire MRRT year for which a
*
decline in value was worked
6
out under section 165-40 were the preceding MRRT year.
7
Example: Using the example in subsection 165-40(1), the preceding base value
8
of the starting base asset for the purposes of section 90-50 is $2.375
9
million ($9.5 million - $7.125 million).
10
If the market value approach is the applicable valuation approach, the
11
base value of the starting base asset for the next
*
MRRT year would,
12
under section 90-50, be $1.75 million ($2.375 million - $625,000).
13
Subdivision 165-D--Miscellaneous
14
Table of sections
15
165-55
Use etc. of starting base assets for other mining project interests etc.
16
165-60
Effect on base value of use etc. of starting base assets after starting base
17
adjustment events
18
165-55 Use etc. of starting base assets for other mining project
19
interests etc.
20
Mining expenditure for use etc. leading to a reduction under
21
subsection 80-40(3)
22
(1)
If:
23
(a)
a
*
starting base loss, for an
*
MRRT year for a mining project
24
interest that a miner has, is reduced under subsection
25
80-40(3) in relation to a
*
starting base asset; and
26
(b) the reason, or part of the reason, for the reduction is that the
27
starting base asset was:
28
(i)
used;
or
29
(ii)
*
installed ready for use; or
30
(iii) being constructed for use;
31
Specialist liability rules Chapter 4
Adjusting MRRT liabilities Part 4-3
Starting base adjustments Division 165
Section 165-55
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 179
in carrying on
*
upstream mining operations relating to
1
another mining project interest that the miner has, or in
2
carrying on
*
pre-mining project operations of a
*
pre-mining
3
project interest that the miner
*
holds;
4
an amount is included in the miner's
*
mining expenditure for the
5
other mining project interest, or
*
pre-mining expenditure for the
6
pre-mining project interest, for the MRRT year.
7
(2) The amount is the amount of that reduction, to the extent that:
8
(a) the reduction happens for that reason; and
9
(b) the amount of the reduction would have been included:
10
(i) in the miner's
*
mining expenditure for the other mining
11
project interest, for the
*
MRRT year, if it had been
12
incurred by the miner to acquire the
*
starting base asset
13
in relation to the other mining project interest; or
14
(ii) in the miner's
*
pre-mining expenditure for the
15
*
pre-mining project interest, for the MRRT year, if it
16
had been incurred by the miner to acquire the starting
17
base asset in relation to the pre-mining project interest.
18
Mining expenditure for use etc. after a starting base adjustment
19
event
20
(3)
If:
21
(a) at a particular time (the adjustment time) during an
*
MRRT
22
year, a
*
starting base adjustment event happened for a
23
*
starting base asset relating to a mining project interest that a
24
miner has; and
25
(b) the starting base adjustment event happened other than
26
because the miner ceased to
*
hold the
*
starting base asset;
27
and
28
(c) after the adjustment time (whether during that MRRT year or
29
a later MRRT year) the starting base asset was:
30
(i)
used;
or
31
(ii)
*
installed ready for use; or
32
(iii) being constructed for use;
33
Chapter 4
Specialist liability rules
Part 4-3
Adjusting MRRT liabilities
Division 165
Starting base adjustments
Section 165-55
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
180 Minerals Resource Rent Tax Bill 2011 No. , 2011
in carrying on
*
upstream mining operations relating to
1
another mining project interest that the miner has, or in
2
carrying on
*
pre-mining project operations of a
*
pre-mining
3
project interest that the miner holds;
4
an amount is included in the miner's
*
mining expenditure for the
5
other mining project interest, or
*
pre-mining expenditure for the
6
pre-mining project interest, for the first MRRT year to which
7
paragraph (c) applies.
8
(4) The amount is the
*
termination value of the
*
starting base asset, to
9
the extent that:
10
(a) the starting base asset was, during the first
*
MRRT year to
11
which paragraph (3)(c) applies:
12
(i)
used;
or
13
(ii)
*
installed ready for use; or
14
(iii) being constructed for use;
15
in carrying on
*
upstream mining operations relating to the
16
other mining project interest, or in carrying on
*
pre-mining
17
project operations of the
*
pre-mining project interest; and
18
(b) the amount of the termination value would have been
19
included:
20
(i) in the miner's
*
mining expenditure for the other mining
21
project interest, for that MRRT year, if it had been
22
incurred by the miner to acquire the starting base asset
23
in relation to the other mining project interest; or
24
(ii) in the miner's
*
pre-mining expenditure for the
25
pre-mining project interest, for that MRRT year, if it
26
had been incurred by the miner to acquire the starting
27
base asset in relation to the pre-mining project interest.
28
Exceptions
29
(5) Despite subsections (1) and (3), this section does not apply:
30
(a) in relation to the other mining project interest if the
*
starting
31
base asset is also a starting base asset in relation to the other
32
mining project interest; or
33
Specialist liability rules Chapter 4
Adjusting MRRT liabilities Part 4-3
Starting base adjustments Division 165
Section 165-60
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 181
(b) in relation to the
*
pre-mining project interest if the starting
1
base asset would also be a starting base asset in relation to
2
another mining project interest that could
*
originate from the
3
pre-mining project interest.
4
165-60 Effect on base value of use etc. of starting base assets after
5
starting base adjustment events
6
Despite sections 90-30 and 90-50, if:
7
(a)
during
an
*
MRRT year, a
*
starting base adjustment event
8
happened for a
*
starting base asset relating to a mining
9
project interest that a miner has; and
10
(b) the starting base adjustment event happened other than
11
because the miner ceased to
*
hold the
*
starting base asset;
12
and
13
(c) during a later MRRT year in which the miner holds the
14
starting base asset, it starts to be:
15
(i)
used;
or
16
(ii)
*
installed ready for use; or
17
(iii) being constructed for use;
18
in carrying on
*
upstream mining operations relating to the
19
mining project interest;
20
the base value of the starting base asset, for the first MRRT year
21
after the time at which the starting base adjustment event
22
happened, is taken to be its
*
termination value at that time.
23
Note:
The base values of the starting base asset for later MRRT years will be
24
worked out under section 90-30 (book value approach) or 90-50
25
(market value approach).
26
27
Chapter 4
Specialist liability rules
Part 4-4
Valuation
Division 170
Valuation principles
Section 170-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
182 Minerals Resource Rent Tax Bill 2011 No. , 2011
Part 4-4--Valuation
1
Division 170--Valuation principles
2
Guide to Division 170
3
170-1 What this Division is about
4
This Division sets out valuation principles that are to be applied in
5
working out the value of a thing for the purposes of the MRRT.
6
Table of sections
7
Operative provisions
8
170-5
Valuations to comply with valuation principles
9
170-10 The
valuation
principles
10
Operative provisions
11
170-5 Valuations to comply with valuation principles
12
(1) The value of a thing that is to be valued for the purposes of
13
working out an amount under the
*
MRRT law is to be worked out
14
in accordance with the valuation principles set out in
15
section 170-10.
16
Note:
The following are some examples of things that may be valued:
17
(a) a starting base asset (to work out a starting base loss);
18
(b) a mining project interest or pre-mining project interest (to work
19
out a split percentage).
20
(2) Subsection (1) is a general rule that is subject to the specific rules
21
in the
*
MRRT law outside this Division.
22
(3) To avoid doubt, subsection (1) applies:
23
(a) whether or not a provision of the
*
MRRT law requires a thing
24
to be valued at its
*
market value; and
25
Specialist liability rules Chapter 4
Valuation Part 4-4
Valuation principles Division 170
Section 170-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 183
(b) whether or not a provision of the MRRT law expressly
1
requires an amount to be worked out by making a valuation.
2
170-10 The valuation principles
3
Basic principle
4
(1) A valuation relating to a mining project interest or
*
pre-mining
5
project interest is to be reasonable having regard to the objects of
6
the
*
MRRT law.
7
Sub-principles
8
(2) A valuation that is to be made as at a particular time may take into
9
account:
10
(a) things that have actually happened before that time; and
11
(b) things that, as at that time, are reasonably expected to happen
12
after that time.
13
Example: A valuation of the rights and interests that constitute a mining project
14
interest as at a particular time may take account of a reasonable
15
estimate, as at that time, of the coal price at a future time. The actual
16
coal price at that future time is not taken into account.
17
(3) The sum of the values of all things in a set must equal the value of
18
the set.
19
Example: A mining operation is valued as at 1 May 2010 at $6 billion.
20
Downstream assets (such as crushers and transport infrastructure) are
21
valued at $2 billion. Upstream capital equipment is valued at $1
22
billion. The value of all other assets in the operation, including mining
23
rights, must be $3 billion.
24
(4) Identical things in identical circumstances have the same value.
25
(5) An assumption or estimate relating to a mining project interest or
26
*
pre-mining project interest:
27
(a) is to be reasonable when considered in isolation; and
28
(b) is to be reasonable when considered together with all other
29
assumptions or estimates made in relation to the interest; and
30
Chapter 4
Specialist liability rules
Part 4-4
Valuation
Division 170
Valuation principles
Section 170-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
184 Minerals Resource Rent Tax Bill 2011 No. , 2011
(c) is to be made consistently for all things relating to the
1
interest.
2
Example 1: An estimate of a commodity price at a future time must itself be
3
reasonable, and must also be reasonable when considered together
4
with all other assumptions or estimates about things that may affect
5
the commodity price (such as a currency exchange rate).
6
Example 2: If the value of a mine is worked out on the assumption that mine
7
production will rise to a particular extent over time, the valuation of
8
each asset within the project must use a consistent assumption.
9
(6) A valuation relating to a mining project interest or
*
pre-mining
10
project interest is to be reconcilable with each other valuation made
11
relating to the interest (including, if relevant, a valuation relating to
12
a pre-mining project interest from which a mining project interest
13
*
originates), if that other valuation:
14
(a) was made after 1 May 2010; and
15
(b) was made for the purposes of working out an amount under
16
the
*
MRRT law; and
17
(c) is, if it is a valuation of a thing of which there is more than
18
one valuation meeting the requirements in paragraphs (a) and
19
(b), the most recent such valuation.
20
Priority of basic principle
21
(7) To the extent the application of a sub-principle in subsections (2)
22
to (6) to a particular valuation would conflict with the basic
23
principle in subsection (1), the basic principle is to be applied and
24
the sub-principle disregarded.
25
26
Specialist liability rules Chapter 4
Valuation Part 4-4
Alternative valuation method Division 175
Section 175-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 185
Division 175--Alternative valuation method
1
Table of Subdivisions
2
Guide to Division 175
3
175-A Object of this Division
4
175-B Choosing to use the alternative valuation method
5
175-C Amounts included in mining revenue under the alternative
6
valuation method
7
Guide to Division 175
8
175-1 What this Division is about
9
A miner that extracts only small amounts of taxable resources, or
10
that has a pre-MRRT operation for transforming those taxable
11
resources, can choose to use the alternative valuation method. This
12
method is a version of the "retail price" or "netback" method.
13
Under this method, mining revenue for supply, exportation or use
14
of taxable resources is worked out from the miner's transactions
15
relating to the taxable resources, with appropriate reductions for
16
downstream operating costs, depreciation and returns on capital.
17
A mining project interest for which the alternative valuation
18
method is used is treated separately from other mining project
19
interests, and its royalty credits and mining losses are quarantined.
20
Note:
Under sections 65-20 and 100-20, royalty credits are not available to
21
be applied to transferred royalty allowances, and mining losses are not
22
available to be applied to transferred mining loss allowances, if the
23
alternative valuation method has been chosen.
24
Subdivision 175-A--Object of this Division
25
Table of sections
26
175-5
Object of this Division
27
Chapter 4
Specialist liability rules
Part 4-4
Valuation
Division 175
Alternative valuation method
Section 175-5
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
186 Minerals Resource Rent Tax Bill 2011 No. , 2011
175-5 Object of this Division
1
The object of this Division is to provide an alternative method to
2
work out
*
mining revenue under section 30-10, so as to reduce
3
compliance costs and increase certainty for miners that may find it
4
particularly difficult to work out that revenue using that section,
5
because:
6
(a) their mining operations are small; or
7
(b) since before 2 May 2010, their mining operations have been
8
vertically integrated with other operations.
9
Subdivision 175-B--Choosing to use the alternative valuation
10
method
11
Table of sections
12
175-10
Choosing to use the alternative valuation method
13
175-15
Group production of taxable resources
14
175-10 Choosing to use the alternative valuation method
15
(1) A miner may choose to use the alternative valuation method in
16
relation to a mining project interest that the miner has, for an
17
*
MRRT year, if either or both of the following apply:
18
(a) group production of
*
taxable resources for the miner for that
19
year under section 175-15 is less than 10 million tonnes;
20
(b) taxable resources extracted during the year from the
*
project
21
area for the mining project interest are used as part of an
22
operation that:
23
(i)
is
for
*
supplying things (other than taxable resources)
24
produced using a taxable resource extracted under the
25
authority of a
*
production right to which the project area
26
relates; and
27
(ii)
existed
in
*
Australia just before 2 May 2010; and
28
(iii) the miner carries on (whether alone or jointly with other
29
*
entities).
30
Specialist liability rules Chapter 4
Valuation Part 4-4
Alternative valuation method Division 175
Section 175-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 187
Note:
Division 119 in Schedule 1 to the Taxation Administration Act 1953 is
1
about choices under the MRRT law.
2
(2) Each choice that the miner makes must relate to:
3
(a) a single mining project interest that the miner has; and
4
(b)
a
single
*
MRRT year.
5
175-15 Group production of taxable resources
6
(1) The group production of
*
taxable resources mentioned in
7
paragraph 175-10(1)(a) for the miner, for an
*
MRRT year, is the
8
number of tonnes of taxable resources that:
9
(a) relate to mining project interests the following
*
entities have,
10
or
*
pre-mining project interests that they
*
hold:
11
(i)
the
miner;
12
(ii)
an
entity
*
connected with the miner;
13
(iii)
an
*
affiliate of the miner;
14
(iv) an entity of which the miner is an affiliate;
15
(v) an affiliate of an entity covered by subparagraph (ii);
16
(vi) an entity connected with an entity covered by
17
subparagraph (ii), (iii) or (iv); and
18
(b) have reached, during the MRRT year, the form in which the
19
resources are intended to be supplied or exported as
20
mentioned in paragraph 30-15(1)(a) or (b).
21
Note:
If the MRRT year is not a 12-month period, the group production of
22
taxable resources is affected by section 190-20 (substituted accounting
23
periods).
24
(2) For the purposes of subsection (1), the number of tonnes of a
25
*
taxable resource is to be calculated when the resource is in the
26
form mentioned in paragraph (1)(b).
27
(3)
If:
28
(a) subsection (1) applies in relation to a
*
taxable resource; and
29
(b) the taxable resource is a quantity of something produced
30
from a process that results in iron ore or coal being consumed
31
or destroyed without extraction;
32
Chapter 4
Specialist liability rules
Part 4-4
Valuation
Division 175
Alternative valuation method
Section 175-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
188 Minerals Resource Rent Tax Bill 2011 No. , 2011
treat as the number of tonnes of that resource, for the purposes of
1
this section, the number of tonnes of iron ore or coal that was so
2
consumed or destroyed.
3
Subdivision 175-C--Amounts included in mining revenue
4
under the alternative valuation method
5
Table of sections
6
175-20
When amounts are included in mining revenue under the alternative
7
valuation method
8
175-25
How to work out the single amount
9
175-30
Unadjusted revenue amounts
10
175-35
Downstream operating costs
11
175-40
Depreciation of assets
12
175-45
Return on capital costs
13
175-20 When amounts are included in mining revenue under the
14
alternative valuation method
15
(1) If a miner chooses, for an
*
MRRT year, to use the alternative
16
valuation method in relation to a mining project interest that the
17
miner has, a single amount is included under section 30-10, in the
18
miner's
*
mining revenue for the interest for the year, relating to all
19
amounts that:
20
(a) are to be included in the miner's mining revenue for the
21
mining project interest for the year under section 30-10; and
22
(b)
relate
to
*
taxable resources that, under subsection (2) of this
23
section, are covered by the alternative valuation method for
24
the MRRT year.
25
The single amount is worked out under section 175-25, instead of
26
section 30-25.
27
(2) The alternative valuation method covers
*
taxable resources for the
28
mining project interest for the year if an amount is included in the
29
miner's
*
mining revenue for the mining project interest for the
30
*
MRRT year under section 30-10 because a
*
mining revenue event
31
happens in relation to the resource.
32
Specialist liability rules Chapter 4
Valuation Part 4-4
Alternative valuation method Division 175
Section 175-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 189
175-25 How to work out the single amount
1
Work out the single amount to be included under section 30-10, in
2
a miner's
*
mining revenue for a mining project interest for an
3
*
MRRT year, as follows:
4
Method statement
5
Step 1. For each of the
*
taxable resources covered by the
6
alternative valuation method for the interest for the year,
7
work out the unadjusted revenue amount under
8
section 175-30.
9
Step 2. Add together all of the unadjusted revenue amounts for
10
the
*
taxable resources covered by the alternative
11
valuation method for the interest for the year.
12
Step 3. Add together all of the following amounts:
13
(a)
the miner's downstream operating costs, worked
14
out under section 175-35, for the interest for the
15
year;
16
(b)
the sum of the amounts, worked out under
17
section 175-40, by which the assets of the miner
18
relating to the interest, to which that section
19
applies, have depreciated in value during the year;
20
(c)
a return on the miner's capital costs for the interest
21
for the year, worked out under section 175-45.
22
Step 4. Reduce the amount under step 2 by the amount under
23
step 3. The result is the single amount to be included in
24
the miner's
*
mining revenue for the mining project
25
interest for the year.
26
Chapter 4
Specialist liability rules
Part 4-4
Valuation
Division 175
Alternative valuation method
Section 175-30
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
190 Minerals Resource Rent Tax Bill 2011 No. , 2011
175-30 Unadjusted revenue amounts
1
The unadjusted revenue amount for a
*
taxable resource covered by
2
the alternative valuation method for the
*
MRRT year is:
3
(a) if the amount relates to a
*
supply--the consideration received
4
or receivable for the supply; or
5
(b) if the amount relates to an exportation from
*
Australia of the
6
taxable resource, or a thing produced using the taxable
7
resource--an amount equal to what would be the
*
arm's
8
length consideration for a supply of the taxable resource or
9
thing at the time and place the taxable resource or thing is
10
loaded for export; or
11
(c) if the amount relates to use of a thing produced from the
12
taxable resource--an amount equal to what would be the
13
*
arm's length consideration for a supply of the thing at the
14
time and place of the use.
15
175-35 Downstream operating costs
16
(1) The miner's downstream operating costs for the
*
MRRT year are
17
the sum of the miner's expenditure, to the extent (if any) that each
18
amount of expenditure meets the following requirements:
19
(a) it is necessarily incurred during the year in carrying on
20
activities that:
21
(i)
relate
to
a
*
taxable resource covered by the alternative
22
valuation method for the year; and
23
(ii)
happen
between
the
*
valuation point for the taxable
24
resource and the time of the
*
mining revenue event
25
mentioned in subsection 175-20(2);
26
(b) it is not a loss or outgoing of capital, or of a capital nature.
27
(2) Disregard, for the purposes of subsection (1), expenditure to the
28
extent that it is
*
excluded expenditure.
29
175-40 Depreciation of assets
30
(1) This section applies to an asset for an
*
MRRT year if:
31
Specialist liability rules Chapter 4
Valuation Part 4-4
Alternative valuation method Division 175
Section 175-40
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 191
(a)
the
miner
*
holds the asset; and
1
(b) the asset was used,
*
installed ready for use or being
2
constructed for use in carrying on:
3
(i)
*
mining operations relating to the mining project
4
interest; or
5
(ii) operations or activities that would be mining operations
6
relating to the mining project interest but for paragraph
7
35-20(1)(b); or
8
(iii) operations of a kind referred to in paragraph
9
175-10(1)(b);
10
relating to a
*
taxable resource covered by the alternative
11
valuation method for the year; and
12
(c) those operations were carried out between the
*
valuation
13
point for the resource and the time of the
*
mining revenue
14
event mentioned in subsection 175-20(2).
15
(2) The amount by which such an asset has depreciated in value during
16
the
*
MRRT year is the amount that would be worked out under
17
Division 40 of the Income Tax Assessment Act 1997, using one of
18
the following methods, if the assumptions in subsection (3) were
19
made:
20
(a)
the
*
diminishing value method;
21
(b)
the
*
prime cost method;
22
(c) another method of depreciation in accordance with
23
*
accounting principles.
24
(3) The assumptions are:
25
(a) the asset is a
*
depreciating asset; and
26
(b)
the
*
MRRT year is an
*
income year; and
27
(c) the method mentioned in paragraph (2)(c) is a method that
28
could be chosen for the purposes of subsection 40-65(1) of
29
the Income Tax Assessment Act 1997; and
30
(d) if the miner
*
held the asset immediately before 1 July 2012
31
and chooses to use the alternative valuation method for the
32
first MRRT year--the asset's
*
opening adjustable value on
33
that day is its depreciated optimised replacement cost; and
34
Chapter 4
Specialist liability rules
Part 4-4
Valuation
Division 175
Alternative valuation method
Section 175-45
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
192 Minerals Resource Rent Tax Bill 2011 No. , 2011
(e) if the miner chooses the
*
prime cost method for the purposes
1
of subsection (2)--for the purposes of using the prime cost
2
method, the first MRRT year is a change year within the
3
meaning of subsection 40-75(2) of the Income Tax
4
Assessment Act 1997.
5
(4) A choice by a miner to use a particular method mentioned in
6
subsection (2) applies to the
*
MRRT year for which the miner first
7
chooses to use the alternative valuation method and to all later
8
MRRT years.
9
(5) For the purpose of applying paragraph (2)(a) or (b):
10
(a) the miner may make the choices for the purposes of this
11
section; and
12
(b) the Commissioner may make the decisions for the purposes
13
of this section;
14
that the miner or Commissioner could have made under
15
Division 40 of the Income Tax Assessment Act 1997, relating to
16
working out an amount under that Division.
17
Note:
Division 119 in Schedule 1 to the Taxation Administration Act 1953 is
18
about choices under the MRRT law.
19
(6) The amount under subsection (2) is reduced to the extent (if any)
20
that, during the year, the asset is not used,
*
installed ready for use
21
or being constructed for use in operations that satisfy
22
paragraphs (1)(b) and (c).
23
(7) This section applies to any improvement to, or any fixture on, land
24
as if it were an asset separate from the land, whether the
25
improvement or fixture is removable or not.
26
175-45 Return on capital costs
27
(1) The return on the miner's capital costs for the
*
MRRT year is as
28
follows:
29
Specialist liability rules Chapter 4
Valuation Part 4-4
Alternative valuation method Division 175
Section 175-45
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 193
*
*
Days in
*MRRT year
Total adjustable
Long term bond rate
0.07
values
for the MRRT year
365
×
+
×
1
where:
2
total adjustable values is the sum of the amounts that would be, for
3
that year, the
*
opening adjustable values of the assets to which
4
section 175-40 applies if the assumptions mentioned in
5
subsection (3) of that section were made.
6
(2) However, that amount is reduced to the extent (if any) that, during
7
the year, those assets are not used,
*
installed ready for use or being
8
constructed for use in operations that satisfy paragraphs
9
175-40(1)(b) and (c).
10
11
Chapter 4
Specialist liability rules
Part 4-4
Valuation
Division 180
Valuation of starting base assets using the look-back approach
Section 180-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
194 Minerals Resource Rent Tax Bill 2011 No. , 2011
Division 180--Valuation of starting base assets using the
1
look-back approach
2
Guide to Division 180
3
180-1 What this Division is about
4
For valuation purposes, an entity can choose to use a "look-back"
5
approach that replaces the market value of starting base assets as at
6
2 May 2010 with the amount of pre-mining expenditure incurred in
7
the 10 years preceding that day.
8
Note:
This Division affects how declines in value are worked out under
9
Division 90.
10
Table of sections
11
Operative provisions
12
180-5
Choosing to apply the look-back approach
13
180-10
The effect of the look-back approach on valuation of mining project
14
interests
15
Operative provisions
16
180-5 Choosing to apply the look-back approach
17
(1)
An
*
entity may choose to apply the look-back approach to all the
18
*
starting base assets that the entity
*
holds that relate to a particular
19
mining project interest that the entity has, or a
*
pre-mining project
20
interest that the entity holds, if:
21
(a)
either:
22
(i) in the case of a mining project interest--the mining
23
project interest did not exist on 2 May 2010, but it
24
*
originates from a pre-mining project interest that
25
existed (or that is a part of a pre-mining project interest
26
that existed) just before 2 May 2010; or
27
Specialist liability rules Chapter 4
Valuation Part 4-4
Valuation of starting base assets using the look-back approach Division 180
Section 180-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 195
(ii) in the case of a pre-mining project interest--the
1
pre-mining project interest existed (or is a part of a
2
pre-mining project interest that existed) just before
3
2 May 2010; and
4
(b) under Division 85, the market value approach is the valuation
5
approach for the mining project interest or pre-mining project
6
interest.
7
Note:
Division 119 in Schedule 1 to the Taxation Administration Act 1953 is
8
about choices under the MRRT law.
9
(2) The choice may specify that it applies to every mining project
10
interest that the
*
entity has, and every
*
pre-mining project interest
11
that the entity
*
holds, that relate to a specified area.
12
(3) The choice applies, in relation to the mining project interest or
13
*
pre-mining project interest, to the first
*
MRRT year and all later
14
MRRT years.
15
180-10 The effect of the look-back approach on valuation of mining
16
project interests
17
(1)
If
the
*
entity has made a choice under section 180-5 relating to the
18
mining project interest or
*
pre-mining project interest, in working
19
out the declines in value, for an
*
MRRT year to which this section
20
applies, of the
*
starting base assets that relate to:
21
(a) the mining project interest to which the choice relates; or
22
(b) a mining project interest that
*
originates from the pre-mining
23
project interest to which the choice relates;
24
use the assumptions set out in subsection (3) of this section.
25
(2) This section applies to the
*
MRRT year in which the
*
start time for
26
the
*
starting base assets happens, and to any later MRRT years.
27
(3) The assumptions are that:
28
(a) all of the
*
starting base assets were a single starting base
29
asset; and
30
(b) for the purposes of working out the
*
base value of that single
31
starting base asset under section 90-40, the
*
market value of
32
Chapter 4
Specialist liability rules
Part 4-4
Valuation
Division 180
Valuation of starting base assets using the look-back approach
Section 180-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
196 Minerals Resource Rent Tax Bill 2011 No. , 2011
the asset on 1 May 2010 were the amount worked out under
1
subsection (4); and
2
(c) for the purposes of working out the remaining effective life
3
of that single starting base asset under section 90-15,
4
subsection 90-15(3) applies as if the asset were treated as a
5
single starting base asset because of section 80-30.
6
Note:
Any amounts of interim expenditure relating to the asset would be
7
included in the base value of the asset for the year: see subparagraph
8
90-40(1)(a)(ii).
9
(4) For the purposes of paragraph (3)(b), the
*
market value of the asset
10
on 1 May 2010 is the sum of all the amounts that, if the
*
MRRT
11
law had been in force from 2 May 2000, would have been
12
*
pre-mining expenditure, incurred between 2 May 2000 and 1 May
13
2010, that:
14
(a) if the choice under section 180-5 relates to a mining project
15
interest:
16
(i) related to the
*
pre-mining project interest from which
17
the mining project interest
*
originates; and
18
(ii) was incurred by the entity that
*
held the pre-mining
19
project interest at the time the expenditure was incurred;
20
or
21
(b) if the choice under section 180-5 relates to a pre-mining
22
project interest--was incurred by the entity that held the
23
pre-mining project interest at the time the expenditure was
24
incurred.
25
26
Specialist liability rules Chapter 4
Accounting for MRRT Part 4-5
Currency translation Division 185
Section 185-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 197
Part 4-5--Accounting for MRRT
1
Division 185--Currency translation
2
Guide to Division 185
3
185-1 What this Division is about
4
The MRRT is accounted for in Australian currency.
5
Generally, all amounts are to be translated into Australian
6
currency.
7
However, an entity that uses a functional currency for income tax
8
purposes must use the same functional currency in accounting for
9
MRRT.
10
If a functional currency is used, amounts are worked out on a net
11
basis in the functional currency, with those amounts then being
12
translated into Australian currency.
13
Table of sections
14
Operative provisions
15
185-5
Objects of this Division
16
185-10
Translation of amounts into Australian currency
17
185-15 Functional
currency
rules
18
185-20
Functional currency rules--Australian permanent establishments
19
185-25 Special
translation
rules
20
Operative provisions
21
185-5 Objects of this Division
22
The objects of this Division are:
23
Chapter 4
Specialist liability rules
Part 4-5
Accounting for MRRT
Division 185
Currency translation
Section 185-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
198 Minerals Resource Rent Tax Bill 2011 No. , 2011
(a) to set out a basic rule requiring an amount in a
*
foreign
1
currency to be translated into Australian currency (subject to
2
the functional currency rules and certain specific rules); and
3
(b) in order to reduce compliance costs, to require an
*
entity that
4
uses a functional currency for income tax purposes to use the
5
same functional currency for MRRT; and
6
(c) to apply rules for identifying the exchange rate for the
7
translation of amounts that are the same rules as apply for
8
income tax purposes.
9
185-10 Translation of amounts into Australian currency
10
(1) For the purposes of this Act, an amount in a
*
foreign currency is to
11
be translated into Australian currency.
12
Examples of an amount
13
(2) The following are examples of an amount:
14
(a) an amount of an expense;
15
(b) an amount of an obligation;
16
(c) an amount of a liability;
17
(d) an amount of a receipt;
18
(e) an amount of a payment;
19
(f) an amount of consideration;
20
(g)
a
value.
21
Translation rule
22
(3) The amount is to be translated into Australian currency at the
23
exchange rate that would be applicable if the translation were being
24
done for the purposes of Subdivision 960-C of the Income Tax
25
Assessment Act 1997.
26
Amounts that are elements in the calculation of other amounts
27
(4) In applying this section:
28
Specialist liability rules Chapter 4
Accounting for MRRT Part 4-5
Currency translation Division 185
Section 185-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 199
(a) first, translate any amounts that are elements in the
1
calculation of other amounts (except amounts covered by
2
subsection (5)); and
3
(b) then, calculate the other amounts.
4
Exception for simplified MRRT method
5
(5) However, in applying this section:
6
(a)
calculate
an
*
entity's profit worked out under section 200-15
7
without translation; and
8
(b) then, translate that profit.
9
185-15 Functional currency rules
10
(1) If a choice under item 1 of the table in subsection 960-60(1) of the
11
Income Tax Assessment Act 1997 is in effect in relation to an
12
*
entity for a period that includes an
*
MRRT year, this section
13
applies, despite section 185-10, to:
14
(a) each mining project interest the entity has in the MRRT year;
15
and
16
(b)
each
*
pre-mining project interest the entity
*
holds in the
17
MRRT year.
18
Note:
An entity cannot choose to use a functional currency for MRRT only.
19
First translation--into applicable functional currency
20
(2) First, for a purpose mentioned in subsection (3), an amount that is
21
not in the currency that, under section 960-70 of the Income Tax
22
Assessment Act 1997, is the
*
entity's applicable functional currency
23
for the relevant period, is to be translated into that applicable
24
functional currency.
25
(3) The purposes are as follows:
26
(a) working out the
*
entity's
*
instalment income for an
27
*
instalment quarter that is part of the
*
MRRT year;
28
(b) working out the
*
mining profit for each mining project
29
interest the entity has in the
*
MRRT year;
30
Chapter 4
Specialist liability rules
Part 4-5
Accounting for MRRT
Division 185
Currency translation
Section 185-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
200 Minerals Resource Rent Tax Bill 2011 No. , 2011
(c) working out the
*
pre-mining profit for each
*
pre-mining
1
project interest the entity
*
holds in the MRRT year;
2
(d) working out the amount of an
*
allowance component relating
3
to each mining project interest the entity has, and each
4
pre-mining project interest the entity holds, in the MRRT
5
year;
6
(e) working out whether the entity may choose under
7
Division 200 to use the simplified MRRT method for the
8
MRRT year;
9
(f) working out a
*
rehabilitation tax offset amount for the entity
10
for the MRRT year.
11
Examples of an amount
12
(4) The following are examples of an amount:
13
(a) an amount of an expense;
14
(b) an amount of an obligation;
15
(c) an amount of a liability;
16
(d) an amount of a receipt;
17
(e) an amount of a payment;
18
(f) an amount of consideration;
19
(g)
a
value;
20
(h) a monetary limit or other amount set out in this Act or any
21
other law of the Commonwealth.
22
Translation rule for first translation
23
(5) An amount is to be translated into that applicable functional
24
currency at the exchange rate that would be applicable if the
25
translation were being done for the purposes of Subdivision 960-D
26
of the Income Tax Assessment Act 1997.
27
(6) Subsections 185-10(4) and (5) apply in relation to a translation
28
done under subsection (2) of this section in the same way those
29
subsections apply in relation to a translation under section 185-10.
30
Note:
Those subsections are about amounts that are elements in the
31
calculation of other amounts.
32
Specialist liability rules Chapter 4
Accounting for MRRT Part 4-5
Currency translation Division 185
Section 185-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 201
Second translation--into Australian currency
1
(7)
Second:
2
(a)
the
*
instalment income for an
*
instalment quarter that is part
3
of the
*
MRRT year is to be translated into Australian
4
currency; and
5
(b)
the
*
mining profit for each mining project interest the
*
entity
6
has, and the
*
pre-mining profit for each
*
pre-mining project
7
interest the entity
*
holds in the MRRT year is to be translated
8
into Australian currency; and
9
(c) to the extent that an
*
allowance component is applied in
10
working out an
*
MRRT allowance for a mining project
11
interest or pre-mining project interest for an MRRT year, the
12
allowance component is to be translated into Australian
13
currency; and
14
(d)
each
*
rehabilitation tax offset amount the entity has for the
15
MRRT year is to be translated into Australian currency.
16
Note 1:
There is no second translation for the simplified MRRT method
17
because, if the miner chooses to use that method, it has no MRRT
18
liability and all allowance components are extinguished: see
19
section 200-5.
20
Note 2:
Not all MRRT allowances apply to pre-mining project interests: see
21
Division 140.
22
Translation rule for second translation
23
(8)
The
*
instalment income,
*
mining profit,
*
pre-mining profit, applied
24
*
allowance component or
*
rehabilitation tax offset amount (as the
25
case may be) is to be translated into Australian currency at the
26
exchange rate that would be applicable if the translation were being
27
done for the purposes of Subdivision 960-D of the Income Tax
28
Assessment Act 1997.
29
185-20 Functional currency rules--Australian permanent
30
establishments
31
(1) Despite section 185-10, if:
32
Chapter 4
Specialist liability rules
Part 4-5
Accounting for MRRT
Division 185
Currency translation
Section 185-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
202 Minerals Resource Rent Tax Bill 2011 No. , 2011
(a) a choice under item 2 of the table in subsection 960-60(1) of
1
the Income Tax Assessment Act 1997 is in effect in relation to
2
the
*
entity in relation to an
*
Australian permanent
3
establishment for a period that includes an
*
MRRT year; and
4
(b) a mining project interest the entity has, or a
*
pre-mining
5
project interest the entity
*
holds, predominantly relates to the
6
activity or business carried on at or through the Australian
7
permanent establishment;
8
section 185-15 applies, subject to this section, to the mining project
9
interest or pre-mining project interest.
10
(2) For the purposes of applying section 185-15 to the mining project
11
interest or
*
pre-mining project interest, sections 185-15 and 185-25
12
apply as if:
13
(a) the reference in subsection 185-15(2) to the
*
entity's
14
applicable functional currency (and any later references to
15
that currency), were instead references to the applicable
16
functional currency of the
*
Australian permanent
17
establishment; and
18
(b) the purpose mentioned in paragraph 185-15(3)(a) were
19
instead the purpose of working out so much of the
20
*
instalment income mentioned in that paragraph as arises
21
from the mining project interest or pre-mining project
22
interest; and
23
(c) the references in subsection 185-15(8) and item 1 of the table
24
in subsection 185-25(1) to the
*
instalment income were
25
instead references to the amount worked out having regard to
26
paragraph (b).
27
185-25 Special translation rules
28
(1)
If:
29
(a) because of this Division, an amount is to be translated at the
30
exchange rate that would be applicable if the translation were
31
being done for the purposes of Subdivision 960-C or 960-D
32
of the Income Tax Assessment Act 1997; and
33
Specialist liability rules Chapter 4
Accounting for MRRT Part 4-5
Currency translation Division 185
Section 185-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 203
(b) an item in the table applies to the circumstances of the
1
translation;
2
the amount is to be translated at the exchange rate so applicable on
3
the day (the exchange rate day) mentioned in that item in the table.
4
5
Exchange rate days
Item
In these circumstances ...
the exchange rate day is
1
the amount is an amount of
*
instalment
income for an
*
instalment quarter in an
*
MRRT year
the last day of the instalment
quarter
2
the amount is an amount of:
(a)
*
mining profit for a mining project
interest the
*
entity has in the
*
MRRT
year; or
(b)
*
pre-mining profit for a
*
pre-mining
project interest the entity
*
holds in
the MRRT year
the last day of the MRRT year
3
the amount is an applied
*
allowance
component that is to be translated
because of paragraph 185-15(7)(c) (the
second translation for functional
currency)
the last day of the
*
MRRT year
to which the allowance
component relates
4
an
*
entity is required to translate the
amount in an
*
MRRT year (the current
year
) because:
(a) in the preceding MRRT year, the
amount was taken into account under
the
*
MRRT law in a particular
currency; and
(b) in the current year the amount is to be
taken into account in a different
currency
the first day of the current year
5
an
*
entity is required to translate the
amount in an
*
MRRT year because:
the day on which the mining
project transfer or mining
project split happens
Chapter 4
Specialist liability rules
Part 4-5
Accounting for MRRT
Division 185
Currency translation
Section 185-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
204 Minerals Resource Rent Tax Bill 2011 No. , 2011
Exchange rate days
Item
In these circumstances ...
the exchange rate day is
(a) the amount relates to a mining project
interest the entity has after a
*
mining
project transfer or
*
mining project
split; and
(b) the entity takes the amount into
account in a different currency to the
currency in which the entity that had
the interest before the transfer or split
took the amount into account
6
an
*
entity is required to translate the
amount in an
*
MRRT year because:
(a) the amount relates to a
*
pre-mining
project interest the entity has after a
*
pre-mining project transfer or
*
pre-mining project split; and
(b) the entity takes the amount into
account in a different currency to the
currency in which the entity that had
the interest before the transfer or split
took the amount into account
the day on which the pre-mining
project transfer or pre-mining
project split happens
7
the amount is an amount of an
*
entity's
profit for an
*
MRRT year that is to be
translated because of subsection
185-10(5) (simplified MRRT method)
the last day of the MRRT year.
1
Examples of amounts covered by table item 4
2
(2) The following are examples of amounts covered by table item 4:
3
(a) an amount of
*
mining expenditure for an earlier
*
MRRT
4
year;
5
(b)
the
*
base value of a
*
starting base asset for the preceding
6
MRRT year;
7
Specialist liability rules Chapter 4
Accounting for MRRT Part 4-5
Currency translation Division 185
Section 185-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 205
(c) the decline in value of a starting base asset, worked out under
1
section 90-5, for the preceding MRRT year;
2
(d) the amount of an
*
allowance component for the preceding
3
MRRT year;
4
(e) the amount of an allowance component that has been applied
5
in working out, for the preceding MRRT year, an
*
MRRT
6
allowance.
7
Special rule about translation--events that happened before the
8
current choice took effect
9
(3) The table has effect if an
*
entity is required to translate an amount
10
in an
*
MRRT year (the current year) because:
11
(a) the amount is attributable to an event that happened, or a
12
state of affairs that came into existence at a time (the event
13
time) before the start of the current year; and
14
(b) the amount has not, before the start of the current year, been
15
taken into account under the
*
MRRT law in relation to a
16
mining project interest or
*
pre-mining project interest.
17
18
Events before current choice took effect
Item
In this case ...
this is the result ...
1
at the event time, no previous choice
under subsection 960-60(1) of the
Income Tax Assessment Act 1997
was in effect in relation to the
*
entity
the amount is to be translated:
(a) first, to Australian currency at
the exchange rate applicable at
the event time; and
(b) then, if necessary, into the
currency in which it is to be
taken into account in the current
year at the exchange rate
applicable at the start of the
current year.
2
at the event time, a previous choice
under subsection 960-60(1) of the
Income Tax Assessment Act 1997
was in effect in relation to the
*
entity
the amount is to be translated:
(a) first, into the currency that, under
section 960-70 of the Income Tax
Assessment Act 1997
, is the
Chapter 4
Specialist liability rules
Part 4-5
Accounting for MRRT
Division 185
Currency translation
Section 185-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
206 Minerals Resource Rent Tax Bill 2011 No. , 2011
Events before current choice took effect
Item
In this case ...
this is the result ...
entity's previous applicable
functional currency, at the
exchange rate applicable at the
event time; and
(b) then, if necessary, into the
currency in which it is to be
taken into account in the current
year at the exchange rate
applicable at the start of the
current year.
1
Examples of amounts covered by subsection (3)
2
(4) The following are examples of amounts covered by subsection (3):
3
(a) the initial book value of a
*
starting base asset under
4
subsection 90-25(3);
5
(b) an amount of
*
interim expenditure incurred in relation to a
6
starting base asset.
7
8
Specialist liability rules Chapter 4
Accounting for MRRT Part 4-5
Substituted accounting periods Division 190
Section 190-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 207
Division 190--Substituted accounting periods
1
Guide to Division 190
2
190-1 What this Division is about
3
If a miner has, for income tax purposes, accounting periods that are
4
not financial years, those periods are also MRRT years. However,
5
this principle is modified to deal with overlaps and gaps caused by
6
changes to a miner's accounting periods.
7
Note:
This Division modifies the general rule under section 10-25 that the
8
MRRT years are financial years.
9
Table of sections
10
Operative provisions
11
190-5
Object of this Division
12
190-10
Accounting periods recognised for income tax purposes
13
190-15
Changes in accounting periods
14
190-20
The effect of transitional accounting periods on threshold amounts
15
190-25
The effect of transitional accounting periods on uplift factors
16
Operative provisions
17
190-5 Object of this Division
18
The object of this Division is to have miners account for MRRT
19
over broadly the same periods as they account for income tax.
20
190-10 Accounting periods recognised for income tax purposes
21
Despite section 10-25, if a miner has, under section 18 of the
22
Income Tax Assessment Act 1936, accounting periods that are not
23
*
financial years, any such accounting period starting after 1 July
24
2012 is an MRRT year.
25
Chapter 4
Specialist liability rules
Part 4-5
Accounting for MRRT
Division 190
Substituted accounting periods
Section 190-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
208 Minerals Resource Rent Tax Bill 2011 No. , 2011
190-15 Changes in accounting periods
1
(1) Despite sections 10-25 and 190-10, if a miner's accounting period
2
changes for the purposes of the
*
income tax law (including by
3
adopting an accounting period in place of
*
financial years or by
4
ceasing to adopt such an accounting period), either or both of the
5
following may be affected by this section:
6
(a) the accounting period that would (apart from this section) be
7
the
*
MRRT year (the old accounting period) corresponding
8
to the last
*
income year in effect before the change;
9
(b) the accounting period that would (apart from this section) be
10
the MRRT year (the new accounting period) corresponding
11
to the first income year in effect after the change.
12
Note:
For accounting periods for income tax purposes, see sections 18 of the
13
Income Tax Assessment Act 1936.
14
Old and new accounting periods ending in the same balancing
15
period
16
(2) If the old accounting period and the new accounting period both
17
end in the same 12 month period between 1 December in a year
18
and 30 November in the next year (a balancing period), the period
19
between the start of the old accounting period and the end of the
20
new accounting period is a single MRRT year.
21
Example: A miner changes accounting periods from an accounting period
22
ending on 31 March 2014 to an accounting period ending on
23
31 October 2014.
24
Because both periods end in the same balancing period, the 19 month
25
period between 1 April 2013 and 31 October 2014 is a single MRRT
26
year.
27
Old and new accounting periods ending in different balancing
28
periods
29
(3)
If:
30
(a) the old accounting period and the new accounting period do
31
not end in the same balancing period; and
32
Specialist liability rules Chapter 4
Accounting for MRRT Part 4-5
Substituted accounting periods Division 190
Section 190-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 209
(b) the old accounting period ends after what would (apart from
1
this section) be the start of the new accounting period;
2
so much of the new accounting period as occurs after the end of the
3
old accounting period constitutes a separate MRRT year.
4
Example: A miner changes accounting periods from an accounting period
5
ending on 30 September 2016 to an accounting period ending on
6
31 March 2017.
7
Because the periods do not end in the same balancing period, and
8
because the periods overlap, the 6 month period between 1 October
9
2016 and 31 March 2017 is a separate MRRT year. (The MRRT year
10
corresponding to the old accounting period is unchanged.)
11
(4)
If:
12
(a) the old accounting period and the new accounting period do
13
not end in the same balancing period; and
14
(b) there is a gap between the end of the old accounting period
15
and the start of the new accounting period;
16
the gap constitutes a separate MRRT year.
17
Example: A miner changes accounting periods from an accounting period
18
ending on 30 November 2017 to an accounting period ending on
19
31 January 2019.
20
Because the periods do not end in the same balancing period, and
21
because there is a gap between the periods, the 2 month period
22
between 1 December 2017 and 31 January 2018 is a separate MRRT
23
year. (The MRRT years corresponding to the old accounting period
24
and the new accounting period are unchanged.)
25
190-20 The effect of transitional accounting periods on threshold
26
amounts
27
(1) For the purpose of working out, in relation to an
*
MRRT year that
28
is not a 12 month period (a transitional accounting period), a
29
component used in working out an amount mentioned in the table,
30
the component is adjusted by multiplying it by:
31
365
Number of days in the transitional accounting period
32
33
Chapter 4
Specialist liability rules
Part 4-5
Accounting for MRRT
Division 190
Substituted accounting periods
Section 190-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
210 Minerals Resource Rent Tax Bill 2011 No. , 2011
Threshold amounts
Item Amount
See:
1
a miner's group mining profit
subsection 45-5(1)
2
a miner's group MRRT allowances
subsection 45-10(1)
3
a miner's share of group mining profit
subsection 45-10(1)
4
a miner's group production of
*
taxable
resources
paragraph 175-15(1)(a)
5
an
*
entity's profit
section 200-15
Example: A miner with a mining profit of $35 million for a transitional
1
accounting period of 120 days will not have a low profit offset under
2
section 45-5 or 45-10, because that profit is adjusted by multiplying it
3
by 365/120, making the profit $106.46 million.
4
(2) In addition to subsection (1), the amount of a miner's offset under
5
subsection 45-10(1) in relation to a transitional accounting period
6
is:
7
Number of days in the
transitional accounting period
Unadjusted offset
365
×
8
where:
9
unadjusted offset is what would be the amount of the offset under
10
subsection 45-10(1) if this subsection did not apply.
11
Example: A miner has a mining profit of $20 million, and MRRT allowances of
12
$3 million, for a transitional accounting period of 120 days. The miner
13
has no connected entities, or affiliates, that are miners.
14
Under subsection (1), the mining profit is adjusted to $60.83 million,
15
and the MRRT allowances are adjusted to $9.13 million. Under
16
subsection 45-10(1), the amount of the miner's offset would be $6.76
17
million (which would exceed the miner's MRRT liability of $3.83
18
million, so MRRT would not be payable).
19
However, under subsection (2) of this section, that amount is
20
multiplied by 120/365, making the offset $2.22 million (which would
21
reduce the miner's MRRT liability to $1.61 million).
22
(3) For the purposes of working out whether a mining project interest
23
is covered by subsection 200-10(3) in relation to a transitional
24
Specialist liability rules Chapter 4
Accounting for MRRT Part 4-5
Substituted accounting periods Division 190
Section 190-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 211
accounting period, the sums of amounts referred to in paragraphs
1
200-10(3)(a) and (b) are adjusted by multiplying them by:
2
365
Number of days in the transitional accounting period
3
190-25 The effect of transitional accounting periods on uplift factors
4
For the purpose of working out an
*
allowance component or a
5
*
base value for an
*
MRRT year immediately following a
6
transitional accounting period, a component of a formula for
7
working out the allowance component or base value that is an
8
uplift factor is taken to be:
9
n
Initial uplift factor
10
where:
11
initial uplift factor is what the uplift factor would be apart from
12
this section.
13
n is the number of days in the transitional accounting period,
14
divided by 365.
15
Note:
There are uplift factors for the following:
16
(a) royalty credits (section 60-25);
17
(b) pre-mining losses (section 70-50);
18
(c) mining losses (section 75-20);
19
(d) starting base losses (section 80-45);
20
(e) base values for starting base assets under the book value
21
approach (section 90-30).
22
23
Chapter 4
Specialist liability rules
Part 4-5
Accounting for MRRT
Division 195
Non-cash benefits
Section 195-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
212 Minerals Resource Rent Tax Bill 2011 No. , 2011
Division 195--Non-cash benefits
1
Guide to Division 195
2
195-1 What this Division is about
3
If an entity gives and receives non-cash benefits under an
4
arrangement (a barter transaction), the entity is taken to have:
5
(a)
received an amount for the non-cash benefits it
6
gives; and
7
(b)
applied that amount to acquire the non-cash
8
benefits it receives.
9
The amount is the market value of the benefits the entity receives.
10
If an entity receives or gives a non-cash benefit for nothing (a gift
11
transaction), the entity is taken to have received or paid an amount
12
equal to the market value of the benefit, and to have paid or
13
received that amount for the benefit.
14
Table of sections
15
Operative provisions
16
195-5
Object of this Division
17
195-10 Barter
transactions
18
195-15 Gift
transactions
19
Operative provisions
20
195-5 Object of this Division
21
The object of this Division is to ensure this Act treats transactions
22
for consideration in kind in the same way as transactions for
23
consideration in cash.
24
Specialist liability rules Chapter 4
Accounting for MRRT Part 4-5
Non-cash benefits Division 195
Section 195-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 213
195-10 Barter transactions
1
(1) This section applies, if:
2
(a)
under
an
*
arrangement, an
*
entity gives consideration of the
3
following kind (non-cash consideration):
4
(i)
a
*
non-cash benefit;
5
(ii) a promise to pay money, other than a promise to pay
6
money within 12 months; and
7
(b) under the same arrangement, the entity receives non-cash
8
consideration.
9
(2) For the purposes of this Act, when the
*
entity gives the non-cash
10
consideration, the entity is taken to receive an amount (the received
11
amount), for that consideration and any amount the entity actually
12
gives under the
*
arrangement, equal to the sum of:
13
(a)
the
*
market value of the non-cash consideration the entity
14
receives; and
15
(b) any amount the entity actually receives under the
16
arrangement.
17
(3) For the purposes of this Act, when the
*
entity receives the non-cash
18
consideration, the entity is taken to pay the received amount for
19
that consideration and any amount the entity actually receives
20
under the arrangement.
21
(4) To avoid doubt, for the purposes of subsection (2) or (3), an
22
amount the
*
entity actually gives or receives under the
23
*
arrangement does not include an amount to which
24
subparagraph (1)(a)(ii) applies.
25
195-15 Gift transactions
26
(1) For the purposes of this Act, if:
27
(a)
an
*
entity receives a
*
non-cash benefit from another entity;
28
and
29
(b) the entity makes no payment, and gives no non-cash benefit,
30
to any entity at any time for the non-cash benefit the entity
31
receives;
32
Chapter 4
Specialist liability rules
Part 4-5
Accounting for MRRT
Division 195
Non-cash benefits
Section 195-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
214 Minerals Resource Rent Tax Bill 2011 No. , 2011
the entity is taken, at the time the entity receives the benefit, to
1
receive an amount equal to the
*
market value of the benefit and to
2
pay the same amount for the benefit.
3
(2) For the purposes of this Act, if:
4
(a)
an
*
entity gives a
*
non-cash benefit to another entity; and
5
(b) the entity receives no payment, and receives no non-cash
6
benefit, from any entity at any time for the non-cash benefit
7
the entity gives;
8
the entity is taken, at the time the entity gives the benefit, to pay an
9
amount equal to the
*
market value of the benefit and to receive the
10
same amount for the benefit.
11
12
Specialist liability rules Chapter 4
Accounting for MRRT Part 4-5
Simplified MRRT method Division 200
Section 200-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 215
Division 200--Simplified MRRT method
1
Guide to Division 200
2
200-1 What this Division is about
3
A miner can choose to use the simplified MRRT method for an
4
MRRT year if the miner's group profit is below certain limits.
5
If the miner chooses to use the method, the miner has no MRRT
6
liabilities for the year, and any allowance components for a mining
7
project interest or a pre-mining project interest cease to exist.
8
Table of sections
9
Operative provisions
10
200-5
Effect of the simplified MRRT method
11
200-10
Choosing to use the simplified MRRT method
12
200-15
Working out an entity's profit for simplified MRRT method purposes
13
Operative provisions
14
200-5 Effect of the simplified MRRT method
15
If a miner chooses, for an
*
MRRT year, to use the simplified
16
MRRT method:
17
(a)
the
miner's
*
MRRT liability for each mining project interest
18
the miner has for the year is zero; and
19
(b)
all
*
allowance components that relate to a mining project
20
interest the miner has, or a
*
pre-mining project interest the
21
miner
*
holds, are extinguished; and
22
(c) each mining project interest that:
23
(i) the miner has during the year; or
24
(ii)
*
originates from a pre-mining project interest the miner
25
held during the year;
26
Chapter 4
Specialist liability rules
Part 4-5
Accounting for MRRT
Division 200
Simplified MRRT method
Section 200-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
216 Minerals Resource Rent Tax Bill 2011 No. , 2011
is taken, despite section 80-20, to have no
*
starting base loss
1
for any later MRRT year.
2
200-10 Choosing to use the simplified MRRT method
3
(1) A miner may choose to use the simplified MRRT method for an
4
*
MRRT year if the sum (the miner's group profit) of each of the
5
following
*
entities' profit worked out under section 200-15 for that
6
year is less than $50 million:
7
(a)
the
miner;
8
(b)
an
entity
*
connected with the miner;
9
(c)
an
*
affiliate of the miner;
10
(d) an entity of which the miner is an affiliate;
11
(e) an affiliate of an entity covered by paragraph (b);
12
(f) an entity connected with an entity covered by paragraph (b),
13
(c) or (d).
14
Note:
Division 119 in Schedule 1 to the Taxation Administration Act 1953 is
15
about choices under the MRRT law.
16
(2) A miner may also choose to use the simplified MRRT method for
17
an
*
MRRT year if:
18
(a) the miner's group profit for that year is less than $250
19
million; and
20
(b) none of the
*
entities mentioned in subsection (1) has a mining
21
project interest covered by subsection (3) for the year.
22
(3) A mining project interest is covered by this subsection for an
23
*
MRRT year if the difference between:
24
(a) the sum of the amounts mentioned in paragraph 60-25(1)(a)
25
for that interest for that year; and
26
(b) the sum of any amounts received or receivable in that year as
27
mentioned in subsection 60-30(1) in relation to the amounts
28
mentioned in that paragraph;
29
is less than 25% of the amount of the
*
entity's profit (worked out
30
under section 200-15) for that year that relates to that interest.
31
Specialist liability rules Chapter 4
Accounting for MRRT Part 4-5
Simplified MRRT method Division 200
Section 200-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 217
Note:
Paragraph 60-25(1)(a) is about liabilities that give rise to royalty
1
credits. These amounts are not the same as the royalty credits, which
2
are grossed up under paragraph 60-25(1)(b).
3
(4) The choice must be given to the Commissioner.
4
Note:
Division 119 in Schedule 1 to the Taxation Administration Act 1953
5
requires the choice to be in the approved form.
6
200-15 Working out an entity's profit for simplified MRRT method
7
purposes
8
(1) To work out an
*
entity's profit under this section for an
*
MRRT
9
year, work out the entity's profit in accordance with
*
accounting
10
principles.
11
Note:
If the MRRT year is not a 12-month period, the entity's profit is
12
affected by section 190-20 (substituted accounting periods).
13
(2) However, disregard an amount that would otherwise form part of
14
the
*
entity's profit under subsection (1) to the extent that it is one
15
or more of the following:
16
(a) any interest expenses;
17
(b) any taxation expenses;
18
(c) any earnings or expenses that do not relate, directly or
19
indirectly, to a
*
mining revenue event;
20
(d) any expenses that give rise to a
*
royalty credit the entity has
21
for the year;
22
(e) any expenses that give rise to a
*
private mining royalty the
23
entity has for the year;
24
(f) any exceptional earnings or expenses.
25
Example: For the 2014-15 MRRT year, MinerCo has earnings of $200 million
26
and expenses of $150 million, giving a profit of $50 million.
27
However, MinerCo has earnings of $51 million that do not relate to a
28
mining revenue event and the following expenses:
29
(a) interest expenses of $20 million;
30
(b) taxation expenses of $20 million;
31
(c) expenses that do not relate to a mining revenue event of $10
32
million;
33
(d) mining royalties of $20 million;
34
(e) private mining royalties of $10 million.
35
Chapter 4
Specialist liability rules
Part 4-5
Accounting for MRRT
Division 200
Simplified MRRT method
Section 200-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
218 Minerals Resource Rent Tax Bill 2011 No. , 2011
Disregarding these earnings and expenses for the purposes of
1
subsection (2), MinerCo's adjusted earnings are $149 million ($200
2
million - $51 million) and its adjusted expenses are $70 million ($150
3
million - sum of the expenses in paragraphs (a) to (e)). MinerCo's
4
profit under this section for the year is $79 million ($149 million - $70
5
million).
6
(3) The amount of profit that relates to a mining project interest the
7
*
entity has for the year is so much of the entity's profit for the year
8
as is reasonably attributable to that interest.
9
10
Specialist liability rules Chapter 4
Integrity measures Part 4-6
Anti-profit shifting Division 205
Section 205-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 219
Part 4-6--Integrity measures
1
Division 205--Anti-profit shifting
2
Guide to Division 205
3
205-1 What this Division is about
4
A miner's liability to pay MRRT must not be smaller than what
5
that liability would be if the conditions operating between the
6
miner and other entities in their commercial or financial relations
7
were consistent with conditions that operate in comparable
8
circumstances between parties dealing wholly independently with
9
one another.
10
Table of sections
11
Operative provisions
12
205-5
Object of Division
13
205-10
Amounts to reflect independent dealings
14
205-15
Method to be used when determining amounts for the purposes of this
15
Division
16
205-20
Commissioner may compensate entity or another entity
17
205-25 Commissioner
determinations
18
Operative provisions
19
205-5 Object of Division
20
The object of this Division is to ensure that dealings that do not
21
fully reflect those that would be expected between independent
22
parties do not inappropriately reduce MRRT an entity is liable to
23
pay.
24
Chapter 4
Specialist liability rules
Part 4-6
Integrity measures
Division 205
Anti-profit shifting
Section 205-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
220 Minerals Resource Rent Tax Bill 2011 No. , 2011
205-10 Amounts to reflect independent dealings
1
(1) This section applies in relation to a mining project interest a miner
2
has, or a
*
pre-mining project interest an
*
entity
*
holds, for an
3
*
MRRT year if:
4
(a) conditions operate between the miner or entity and one or
5
more other entities in their commercial or financial relations
6
that relate to things done, or to be done, in relation to the
7
mining project interest or pre-mining project interest; and
8
(b) those conditions are different from the conditions (the
9
independent conditions) that operate in comparable
10
circumstances between independent entities dealing wholly
11
independently with one another; and
12
(c) if the independent conditions had instead operated, one or
13
more of the following would, or could reasonably be
14
expected to, apply:
15
(i)
the
*
mining profit (if any) for the mining project interest
16
for the year or the
*
pre-mining profit (if any) for the
17
pre-mining project interest for the year would be larger,
18
or could reasonably be expected to be, larger;
19
(ii)
the
*
allowance components (if any) for the mining
20
project interest or pre-mining project interest for the
21
year would be smaller, or could reasonably be expected
22
to be, smaller;
23
(iii) an offset under Division 45 (low profit offsets) or
24
Division 225 (rehabilitation tax offsets) the miner or
25
entity has for the year would be smaller, or could
26
reasonably be expected to be, smaller.
27
(2) For the purposes of paragraph (1)(b):
28
(a) circumstances mentioned in that paragraph are comparable if,
29
to the extent that they materially affect the independent
30
conditions, they are the same as the circumstances of the
31
miner or
*
entity and one or more other entities mentioned in
32
paragraph (1)(a); and
33
(b) conditions mentioned in that paragraph are different from the
34
independent conditions if a condition exists that is not one of
35
Specialist liability rules Chapter 4
Integrity measures Part 4-6
Anti-profit shifting Division 205
Section 205-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 221
the independent conditions or if a condition does not exist
1
that is one of the independent conditions.
2
(3)
The
*
MRRT law has effect as if:
3
(a) the amounts to which paragraph (1)(c) applies; and
4
(b) any amounts that are elements in the calculation of those
5
amounts;
6
were the amounts that would be, or could reasonably be expected
7
to be, those amounts if the independent conditions had instead
8
operated.
9
205-15 Method to be used when determining amounts for the
10
purposes of this Division
11
(1) For the purposes of this Division, in working out what an amount
12
would have been, or could reasonably be expected to have been, if
13
the independent conditions had instead operated, use the method
14
that, having regard to:
15
(a) the circumstances of the miner or
*
entity and one or more
16
other entities mentioned in paragraph 205-10(1)(a), including
17
the functions performed, assets used and risks borne by the
18
miner or entity and each other entity in their commercial or
19
financial relations; and
20
(b) the extent to which the method can reliably adjust for any
21
differences between those circumstances and the
22
circumstances mentioned in paragraph 205-10(1)(b); and
23
(c) the availability of reliable information required to apply a
24
particular method; and
25
(d)
the
*
transfer pricing guidelines;
26
produces the most appropriate and reliable measure of what the
27
amount would have been.
28
(2) The following are the transfer pricing guidelines:
29
(a) unless paragraph (b) applies--the document entitled
30
"Transfer Pricing Guidelines for Multinational Enterprises
31
and Tax Administrations" and published by the Organisation
32
Chapter 4
Specialist liability rules
Part 4-6
Integrity measures
Division 205
Anti-profit shifting
Section 205-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
222 Minerals Resource Rent Tax Bill 2011 No. , 2011
for Economic Cooperation and Development on 18 August
1
2010;
2
(b) if the Commissioner determines, by legislative instrument, a
3
later publication of that document to be a transfer pricing
4
guideline for the purposes of this subsection--that later
5
publication;
6
(c) any other document, or part of any other document, published
7
by that organisation that the Commissioner determines, by
8
legislative instrument, to be a transfer pricing guideline for
9
the purposes of this subsection.
10
(3) A determination under paragraph (2)(b) or (2)(c) may specify the
11
time from which the document, or part of the document, is to be
12
taken to be a
*
transfer pricing guideline for the purposes of that
13
paragraph.
14
205-20 Commissioner may compensate entity or another entity
15
(1) The Commissioner may make a determination under
16
section 205-25 if:
17
(a) section 205-10 applies in relation to a mining project interest
18
a miner has, or a
*
pre-mining project interest an
*
entity
19
*
holds, for an
*
MRRT year; and
20
(b) the Commissioner considers that if the independent
21
conditions mentioned in that section had instead operated,
22
one or more of the following would, or could reasonably be
23
expected to, apply:
24
(i)
the
*
mining profit (if any) for the mining project interest
25
or the
*
pre-mining profit (if any) for the pre-mining
26
project interest for another MRRT year would be
27
smaller, or could reasonably be expected to be smaller;
28
(ii)
an
*
allowance component (if any) for the mining project
29
interest or pre-mining project interest for another
30
MRRT year would be larger, or could reasonably be
31
expected to be larger;
32
(iii) an offset under Division 45 (low profit offsets) or
33
Division 225 (rehabilitation tax offsets) the miner or
34
Specialist liability rules Chapter 4
Integrity measures Part 4-6
Anti-profit shifting Division 205
Section 205-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 223
entity has for another MRRT year would be larger, or
1
could reasonably be expected to be larger; and
2
(c) the Commissioner considers that it is fair and reasonable that
3
the amounts to which paragraph (b) applies be adjusted to be
4
the amounts that would be, or could reasonably be expected
5
to be, those amounts if the independent conditions had
6
instead operated.
7
(2) The Commissioner may also make a determination under
8
section 205-25 if:
9
(a) section 205-10 applies in relation to a mining project interest
10
a miner has, or a
*
pre-mining project interest an
*
entity
11
*
holds, for an
*
MRRT year; and
12
(b) the Commissioner considers that if the independent
13
conditions mentioned in that section had instead operated,
14
one or more of the following would, or could reasonably be
15
expected to, apply in relation to another entity mentioned in
16
paragraph 205-10(1)(a):
17
(i)
the
*
mining profit (if any) for a mining project interest,
18
or the
*
pre-mining profit (if any) for a pre-mining
19
project interest, the other entity has or holds, for an
20
MRRT year, would be smaller, or could reasonably be
21
expected to be smaller;
22
(ii)
an
*
allowance component (if any) for a mining project
23
interest or pre-mining project interest the other entity
24
has or holds for an MRRT year would be larger, or
25
could reasonably be expected to be larger;
26
(iii) an offset under Division 45 (low profit offsets) or
27
Division 225 (rehabilitation tax offsets) the other entity
28
has for an MRRT year would be larger, or could
29
reasonably be expected to be larger; and
30
(c) the Commissioner considers that it is fair and reasonable that
31
the amounts to which paragraph (b) applies be adjusted to be
32
the amounts that would be, or could reasonably be expected
33
to be, those amounts if the independent conditions had
34
instead operated.
35
Chapter 4
Specialist liability rules
Part 4-6
Integrity measures
Division 205
Anti-profit shifting
Section 205-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
224 Minerals Resource Rent Tax Bill 2011 No. , 2011
205-25 Commissioner determinations
1
(1) For the purposes of adjusting an amount mentioned in paragraph
2
205-20(1)(c) or (2)(c), the Commissioner may make a
3
determination stating any of the following:
4
(a) the amount that, under the
*
MRRT law, is (and has been at all
5
times) an
*
entity's
*
mining profit for a mining project
6
interest, or the entity's
*
pre-mining profit for a
*
pre-mining
7
project interest for an
*
MRRT year that has ended;
8
(b) the amount that, under the MRRT law, is (and has been at all
9
times) an
*
allowance component for a mining project interest
10
or pre-mining project interest for an MRRT year that has
11
ended;
12
(c) one or more of the following amounts that, under the MRRT
13
law, is (and has been at all times) the amount an entity has
14
for an MRRT year that has ended:
15
(i) an offset under Division 45 (low profit offsets);
16
(ii) an offset under Division 225 (rehabilitation tax offsets);
17
(d) in relation to an amount that is an element in the calculation
18
of amounts to which paragraph (a), (b) or (c) apply--the
19
amount that, under the MRRT law, is (and has been at all
20
times) that amount for an MRRT year that has ended.
21
(2)
An
*
entity may give the Commissioner a written request to make a
22
determination under this section relating to the entity. The
23
Commissioner must decide whether or not to grant the request, and
24
give the entity notice of the Commissioner's decision.
25
(3) The Commissioner may take such action as the Commissioner
26
considers necessary to give effect to the determination.
27
(4) The Commissioner must give a copy of a determination under this
28
section to the
*
entity whose
*
mining profit,
*
pre-mining profit,
29
*
allowance components or offsets is stated in the determination.
30
(5) A failure to comply with subsection (4) does not affect the validity
31
of the determination.
32
Specialist liability rules Chapter 4
Integrity measures Part 4-6
Anti-profit shifting Division 205
Section 205-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 225
(6) To avoid doubt, statements relating to different
*
MRRT years and
1
different
*
mining profits,
*
pre-mining profits,
*
allowance
2
components and offsets may be included in a single determination
3
under this section.
4
(7)
If
an
*
entity is dissatisfied with the Commissioner's decision not to
5
grant a request by the entity under subsection (2), the entity may
6
object, in the manner set out in Part IVC of the Taxation
7
Administration Act 1953, against that decision.
8
9
Chapter 4
Specialist liability rules
Part 4-6
Integrity measures
Division 210
Anti-avoidance
Section 210-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
226 Minerals Resource Rent Tax Bill 2011 No. , 2011
Division 210--Anti-avoidance
1
Table of Subdivisions
2
Guide to Division 210
3
210-A Application of this Division
4
210-B Commissioner may negate effects of schemes for MRRT
5
benefits
6
Guide to Division 210
7
210-1 What this Division is about
8
This Division applies to deter schemes that give entities MRRT
9
benefits by reducing MRRT liabilities or increasing offsets the
10
entity has under this Act.
11
The Division applies if an entity gets an MRRT benefit from a
12
scheme, and the sole or dominant purpose of that entity or another
13
entity entering into the scheme was to give that entity or another
14
entity an MRRT benefit (or an MRRT benefit and one or more
15
other taxation benefits).
16
The Commissioner may negate the MRRT benefit an entity gets
17
from the scheme by making a determination.
18
Subdivision 210-A--Application of this Division
19
Table of sections
20
210-5
Object of this Division
21
210-10
When does this Division apply?
22
210-15
When does an entity get an MRRT benefit from a scheme?
23
210-20
Matters to be considered in determining purpose
24
Specialist liability rules Chapter 4
Integrity measures Part 4-6
Anti-avoidance Division 210
Section 210-5
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 227
210-5 Object of this Division
1
The object of this Division is to deter
*
schemes to give
*
entities
2
benefits that:
3
(a)
reduce
*
MRRT liabilities; or
4
(b) increase offsets under Division 45 (low profit offsets) or
5
Division 225 (rehabilitation tax offsets).
6
210-10 When does this Division apply?
7
General rule
8
(1) This Division applies if:
9
(a)
an
*
entity gets or got an
*
MRRT benefit from a
*
scheme; and
10
(b) the MRRT benefit is not attributable to the making, by any
11
entity, of a choice (however described) expressly provided
12
for by a
*
taxation law (other than a choice under
13
Subdivision 960-D of the Income Tax Assessment Act 1997);
14
and
15
(c) taking account of the matters described in section 210-20, it
16
is reasonable to conclude that an entity that (whether alone or
17
with others) entered into or carried out the scheme, or part of
18
the scheme, did so with the sole or dominant purpose of that
19
entity or another entity:
20
(i) getting an MRRT benefit from the scheme; or
21
(ii) both getting an MRRT benefit from the scheme and
22
reducing one or more of its liabilities to which
23
subsection (5) applies; and
24
(d)
the
scheme:
25
(i) has been or is entered into on or after 2 May 2010; or
26
(ii) has been or is carried out or commenced on or after that
27
day (other than a scheme that was entered into before
28
that day).
29
(2) It does not matter whether the
*
scheme, or any part of the scheme,
30
was entered into or carried out inside or outside Australia.
31
Chapter 4
Specialist liability rules
Part 4-6
Integrity measures
Division 210
Anti-avoidance
Section 210-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
228 Minerals Resource Rent Tax Bill 2011 No. , 2011
(3)
An
*
MRRT benefit that the
*
entity gets or got from a
*
scheme is
1
not taken, for the purposes of paragraph (1)(b), to be attributable to
2
a choice of a kind referred to in that paragraph if:
3
(a) the scheme, or part of the scheme, was entered into or carried
4
out for the purpose of creating a circumstance or state of
5
affairs; and
6
(b) the existence of the circumstance or state of affairs is
7
necessary to enable the choice to be made.
8
Operation of this Division not limited
9
(4) The operation of this Division is not limited by:
10
(a)
the
*
MRRT law (apart from this Division); or
11
(b)
the
International Tax Agreements Act 1953.
12
Other liabilities
13
(5) This subsection applies to any of the following liabilities:
14
(a) tax under an
*
Australian law (other than the
*
MRRT law);
15
(b) tax under a
*
foreign law;
16
(c)
a
*
mining royalty.
17
210-15 When does an entity get an MRRT benefit from a scheme?
18
(1)
An
*
entity gets an MRRT benefit from a
*
scheme, if:
19
(a)
an
*
MRRT liability of the entity for a mining project interest
20
for an
*
MRRT year under the
*
MRRT law apart from this
21
Division is, or could reasonably be expected to be, smaller
22
than it would be apart from the scheme; or
23
(b) the entity has an offset under Division 45 (low profit offsets)
24
or Division 225 (rehabilitation tax offsets), and the entity
25
would not have had, or could not reasonably be expected to
26
have had, the whole or a part of that offset apart from the
27
scheme.
28
Specialist liability rules Chapter 4
Integrity measures Part 4-6
Anti-avoidance Division 210
Section 210-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 229
(2) To avoid doubt, a smaller
*
MRRT liability mentioned in
1
paragraph (1)(a) includes a case where the MRRT liability is zero,
2
or there is no MRRT liability for the
*
MRRT year.
3
210-20 Matters to be considered in determining purpose
4
The following matters are to be taken into account under
5
section 210-10 in considering an
*
entity's purpose in entering into
6
or carrying out the
*
scheme, or part of the scheme:
7
(a) the manner in which the scheme was entered into or carried
8
out;
9
(b) the form and substance of the scheme;
10
(c) the time at which the scheme was entered into and the length
11
of the period during which the scheme was carried out;
12
(d) the effect that the
*
MRRT law would have in relation to the
13
scheme apart from this Division;
14
(e) any change in the financial position of the entity that has
15
resulted, or may reasonably be expected to result, from the
16
scheme;
17
(f) any change that has resulted, or may reasonably be expected
18
to result, from the scheme in the financial position of an
19
entity that has or had a connection or dealing with the entity,
20
whether the connection or dealing is or was of a family,
21
business or other nature;
22
(g) any other consequence for the entity, or an entity of a kind
23
mentioned in paragraph (f), of the scheme having been
24
entered into or carried out;
25
(h) the nature of the connection (whether of a business, family or
26
other nature) between the entity and such an entity.
27
Subdivision 210-B--Commissioner may negate effects of
28
schemes for MRRT benefits
29
Table of sections
30
210-25 Commissioner
may
negate
entity's MRRT benefits
31
210-30
Commissioner may compensate entity or another entity
32
Chapter 4
Specialist liability rules
Part 4-6
Integrity measures
Division 210
Anti-avoidance
Section 210-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
230 Minerals Resource Rent Tax Bill 2011 No. , 2011
210-35
One determination may cover several MRRT years etc.
1
210-40
Commissioner must give copy of determination to entity affected
2
210-25 Commissioner may negate entity's MRRT benefits
3
(1) For the purpose of negating an
*
MRRT benefit the
*
entity gets or
4
got from the
*
scheme, the Commissioner may make a
5
determination stating any of the following:
6
(a) the amount that, under the
*
MRRT law, is (and has been at all
7
times) the entity's
*
MRRT liability for a mining project
8
interest for an
*
MRRT year that has ended;
9
(b) one or more of the following amounts that, under the MRRT
10
law, is (and has been at all times) the amount the entity has
11
for an MRRT year that has ended:
12
(i) an offset under Division 45 (low profit offsets);
13
(ii) an offset under Division 225 (rehabilitation tax offsets).
14
(2) The Commissioner may take such action as the Commissioner
15
considers necessary to give effect to the determination.
16
210-30 Commissioner may compensate entity or another entity
17
(1) This section applies if:
18
(a) the Commissioner has made a determination under
19
section 210-25 to negate the
*
MRRT benefit an
*
entity gets
20
or got from the
*
scheme; and
21
(b) the Commissioner considers that the entity or another entity
22
gets or got an
*
MRRT disadvantage from the scheme; and
23
(c) the Commissioner considers that it is fair and reasonable that
24
the entity or other entity's MRRT disadvantage be negated or
25
reduced.
26
(2)
An
*
entity gets an MRRT disadvantage from a
*
scheme if:
27
(a)
an
*
MRRT liability of the entity for a mining project interest
28
for an
*
MRRT year under the
*
MRRT law (apart from this
29
Division) is, or could reasonably be expected to be, larger
30
than it would be apart from the scheme; or
31
Specialist liability rules Chapter 4
Integrity measures Part 4-6
Anti-avoidance Division 210
Section 210-35
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 231
(b) one or more of the following amounts the entity has for an
1
MRRT year under the MRRT law (apart from this Division)
2
is, or could reasonably be expected to be, smaller than it
3
would be apart from the scheme:
4
(i) an offset under Division 45 (low profit offsets);
5
(ii) an offset under Division 225 (rehabilitation tax offsets).
6
(3) For the purposes of negating or reducing the
*
entity's or other
7
entity's
*
MRRT disadvantage from the
*
scheme, the Commissioner
8
may make a determination stating any of the following:
9
(a) the amount that, under the
*
MRRT law, is (and has been at all
10
times) the entity's or other entity's
*
MRRT liability for a
11
mining project interest for an
*
MRRT year that has ended;
12
(b) one or more of the following amounts that, under the MRRT
13
law, is (and has been at all times) the amount the entity has
14
for an MRRT year that has ended:
15
(i) an offset under Division 45 (low profit offsets);
16
(ii) an offset under Division 225 (rehabilitation tax offsets).
17
(4)
An
*
entity may give the Commissioner a written request to make a
18
determination under this section relating to the entity. The
19
Commissioner must decide whether or not to grant the request, and
20
give the entity notice of the Commissioner's decision.
21
(5)
If
the
*
entity is dissatisfied with the Commissioner's decision not
22
to grant the request the entity may object, in the manner set out in
23
Part IVC of the Taxation Administration Act 1953, against that
24
decision.
25
(6) The Commissioner may take such action as the Commissioner
26
considers necessary to give effect to the determination.
27
210-35 One determination may cover several MRRT years etc.
28
To avoid doubt, statements relating to different
*
MRRT years and
29
different
*
MRRT benefits or
*
MRRT disadvantages may be
30
included in a single determination under this Subdivision.
31
Chapter 4
Specialist liability rules
Part 4-6
Integrity measures
Division 210
Anti-avoidance
Section 210-40
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
232 Minerals Resource Rent Tax Bill 2011 No. , 2011
210-40 Commissioner must give copy of determination to entity
1
affected
2
(1) The Commissioner must give a copy of a determination under this
3
Subdivision to the
*
entity whose
*
MRRT liability or offset amount
4
is stated in the determination.
5
(2) A failure to comply with subsection (1) does not affect the validity
6
of the determination.
7
8
Specialist liability rules Chapter 4
Entities Part 4-7
Consolidated groups Division 215
Section 215-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 233
Part 4-7--Entities
1
Division 215--Consolidated groups
2
Guide to Division 215
3
215-1 What this Division is about
4
Consolidated groups and MEC groups (groups of entities that are
5
treated as single entities for income tax purposes) can choose to
6
consolidate for MRRT purposes.
7
Following a choice to consolidate, subsidiary members are treated
8
as part of the head company of the group for certain purposes, such
9
as calculating MRRT payable.
10
Mining project interests that a subsidiary member brings to the
11
group on joining are treated as having been transferred to the head
12
company.
13
Mining project interests that a subsidiary member takes with it on
14
leaving are treated as having been transferred from the head
15
company to the member.
16
Table of Sections
17
Operative provisions
18
215-5
Objects of this Division
19
215-10
Choice to consolidate for MRRT purposes
20
215-15 Single
entity
rule
21
215-20
Project interests transferred to head company etc. on joining
22
215-25
Project interests transferred to leaving entity on leaving
23
215-30
Mining project interests etc. split to leaving entity on leaving
24
215-35
Acquisition of consolidated group by another consolidated group etc.
25
215-40
Instalment rates for leaving entity or new head company
26
Chapter 4
Specialist liability rules
Part 4-7
Entities
Division 215
Consolidated groups
Section 215-5
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
234 Minerals Resource Rent Tax Bill 2011 No. , 2011
215-45
Effect of choice to continue group after shelf company becomes new head
1
company
2
215-50
Effect of change of head company or provisional head company of a MEC
3
group
4
215-55
Effect of group conversions involving MEC groups
5
Operative provisions
6
215-5 Objects of this Division
7
The objects of this Division are:
8
(a) to reduce the cost of complying with this Act; and
9
(b) to improve business efficiency by removing complexities and
10
promoting simplicity in the taxation of wholly-owned groups.
11
215-10 Choice to consolidate for MRRT purposes
12
(1)
A
*
head company of a
*
consolidated group or a
*
MEC group or a
13
*
provisional head company of a MEC group may, in writing,
14
choose to apply this Division in relation to the group.
15
Note:
Division 119 in Schedule 1 to the Taxation Administration Act 1953 is
16
about choices under the MRRT law.
17
(2) However, subsection (1) does not apply if a notice has not been
18
given to the Commissioner under section 703-58 or 719-76 of the
19
Income Tax Assessment Act 1997 in relation to the group.
20
(3)
The
*
head company or the
*
provisional head company must give
21
the Commissioner notice of the choice in the
*
approved form:
22
(a) within 21 days after making the choice; or
23
(b) within such further period as the Commissioner allows.
24
(4)
The
choice:
25
(a) has effect on and after the day the choice is made; and
26
(b) does not have effect after the
*
consolidated group or
*
MEC
27
group ceases to exist.
28
Note:
Mining project interests the head company has just before a
29
consolidated group or MEC group ceases to exist would be transferred
30
Specialist liability rules Chapter 4
Entities Part 4-7
Consolidated groups Division 215
Section 215-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 235
or split (as the case requires) to the relevant entity at the time the
1
group ceases to exist: see section 215-25 and 215-30.
2
215-15 Single entity rule
3
(1)
If
an
*
entity is a
*
subsidiary member of the
*
consolidated group or
4
*
MEC group for any period in which the choice is in effect, it and
5
any other subsidiary member of the group are taken for the
6
purposes covered by subsection (2) to be parts of the
*
head
7
company or
*
provisional head company of the group, rather than
8
separate entities, during that period.
9
Note:
Despite the single entity rule, a subsidiary member of the group is
10
jointly and severally liable for an MRRT liability of the head
11
company: see section 721-10 of the Income Tax Assessment Act 1997.
12
(2) The purposes covered by this subsection are:
13
(a) working out the mining project interests or
*
pre-mining
14
project interests the
*
head company or
*
provisional head
15
company, or the
*
entity, has for any
*
MRRT year in which
16
any of the period occurs or any later MRRT year;
17
(b) working out any MRRT that is payable in relation to such an
18
interest for any such MRRT year;
19
(c) working out any allowance components arising in relation to
20
such an interest for any such MRRT year;
21
(d) working out the company's or the entity's
*
instalment income
22
for an
*
instalment quarter that is part of any such MRRT
23
year.
24
Examples: The following are some examples of consequences of the single entity
25
rule:
26
(a) mining project interests that the subsidiary member of a
27
consolidated group would otherwise start to have at a time after
28
becoming a member of the group are mining project interests the
29
head company has;
30
(b) a supply of a taxable resource by a subsidiary member to the
31
head company of a consolidated group would be disregarded and
32
no amount would be included in the member's mining revenue in
33
relation to the supply;
34
(c) an amount paid by the head company for such a supply would be
35
disregarded and no amount would be included in its mining
36
expenditure for the supply;
37
Chapter 4
Specialist liability rules
Part 4-7
Entities
Division 215
Consolidated groups
Section 215-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
236 Minerals Resource Rent Tax Bill 2011 No. , 2011
(d) MRRT liabilities that a subsidiary member has before becoming
1
a member of the group (and any interest charges associated with
2
such a liability) remain liabilities of the subsidiary member and
3
not the head company.
4
215-20 Project interests transferred to head company etc. on joining
5
If, because of the application of section 215-15, an
*
entity is taken
6
at a particular time to start being part of the
*
head company or
7
*
provisional head company of a group:
8
(a) Division 120 applies as if each mining project interest the
9
entity had just before that time had been transferred to the
10
company under a
*
mining project transfer; and
11
(b) Division 145 applies as if each
*
pre-mining project interest
12
the entity
*
held just before that time had been transferred to
13
the company under a
*
pre-mining project transfer.
14
215-25 Project interests transferred to leaving entity on leaving
15
(1)
If:
16
(a) because of the application of section 215-15, an
*
entity is
17
taken at a particular time to stop being part of the
*
head
18
company or
*
provisional head company of a group; and
19
(b) the entitlement comprising a mining project interest the entity
20
has just after that time is all of the entitlement comprising the
21
mining project interest the company had just before that time;
22
Division 120 applies as if each such mining project interest the
23
entity has just after that time had been transferred from the
24
company under a
*
mining project transfer.
25
(2)
If:
26
(a) because of the application of section 215-15, an
*
entity is
27
taken at a particular time to stop being part of the
*
head
28
company or
*
provisional head company of a group; and
29
(b)
a
*
pre-mining project interest the entity
*
holds just after that
30
time is all of a pre-mining project interest the company held
31
just before that time;
32
Specialist liability rules Chapter 4
Entities Part 4-7
Consolidated groups Division 215
Section 215-30
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 237
Division 145 applies as if each such pre-mining project interest the
1
entity holds just after that time had been transferred from the
2
company under a
*
pre-mining project transfer.
3
215-30 Mining project interests etc. split to leaving entity on leaving
4
(1)
If:
5
(a) because of the application of section 215-15, an
*
entity is
6
taken at a particular time to stop being part of the
*
head
7
company or
*
provisional head company of a group; and
8
(b) the entitlement comprising a mining project interest the entity
9
has just after that time is part, but not all, of the entitlement
10
comprising the mining project interest the company had just
11
before that time;
12
Division 125 applies as if a
*
mining project split had happened in
13
relation to the interests.
14
(2)
If:
15
(a) because of the application of section 215-15, an
*
entity is
16
taken at a particular time to stop being part of the
*
head
17
company or
*
provisional head company of a group; and
18
(b)
a
*
pre-mining project interest the entity
*
holds just after that
19
time is part, but not all, of a pre-mining project interest the
20
company held just before that time;
21
Division 150 applies as if a
*
pre-mining project split had happened
22
in relation to the interests.
23
215-35 Acquisition of consolidated group by another consolidated
24
group etc.
25
If
a
*
member of a
*
consolidated group or
*
MEC group (the
26
relinquishing group) becomes a member of another consolidated
27
group or MEC group (the acquiring group) at a particular time
28
(the acquisition time):
29
(a) first apply section 215-25 or 215-30 (as the case requires) in
30
relation to the member ceasing to be a member of the
31
relinquishing group as if section 215-15 (the single entity
32
Chapter 4
Specialist liability rules
Part 4-7
Entities
Division 215
Consolidated groups
Section 215-40
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
238 Minerals Resource Rent Tax Bill 2011 No. , 2011
rule) did not apply in relation to the member just after the
1
acquisition time; and
2
(b) then apply section 215-20 in relation to the member
3
becoming a member of the acquiring group as if
4
section 215-15 (the single entity rule) did not apply in
5
relation to the member just before the acquisition time.
6
215-40 Instalment rates for leaving entity or new head company
7
If:
8
(a) at a particular time an
*
entity ceases to be a
*
subsidiary
9
member of the
*
consolidated group or
*
MEC group; and
10
(b) the Commissioner has, before that time, given the
*
head
11
company or
*
provisional head company of the group an
12
instalment rate under section 115-65 in Schedule 1 to the
13
Taxation Administration Act 1953;
14
for the purposes of applying Division 115 in that Schedule in
15
relation to the entity at and after that time, the Commissioner is
16
taken to have given the entity, under that section, the instalment
17
rate that is the most recent instalment rate the Commissioner has
18
given the head company or provisional head company of the group
19
under that section before that time.
20
215-45 Effect of choice to continue group after shelf company
21
becomes new head company
22
(1) If a company (the interposed company) chooses under subsection
23
124-380(5) of the Income Tax Assessment Act 1997 that a
24
*
consolidated group is to continue in existence at and after the time
25
referred to in that subsection as the completion time, for the
26
purposes of the
*
MRRT law:
27
(a) the group is taken not to have ceased to exist under
28
subsection 703-5(2) of that Act because the company referred
29
to in subsection 124-380(5) of that Act as the original
30
company ceases to be the
*
head company of the group; and
31
Specialist liability rules Chapter 4
Entities Part 4-7
Consolidated groups Division 215
Section 215-50
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 239
(b) the interposed company is taken to have become the head
1
company of the consolidated group at the completion time;
2
and
3
(c) the original company is taken to have ceased to be the head
4
company at that time.
5
Note:
A further result is that the original company is taken to have become a
6
subsidiary member of the group at that time.
7
(2) For the purposes mentioned in subsection 215-15(2) in relation to
8
an
*
MRRT year ending after the completion time, everything that
9
happened in relation to the original company before the completion
10
time:
11
(a) is taken to have happened in relation to the interposed
12
company instead of in relation to the original company; and
13
(b) is taken to have happened in relation to the interposed
14
company instead of what would (apart from this section) be
15
taken to have happened in relation to the interposed company
16
before that time;
17
just as if, at all times before the completion time, the interposed
18
company had been the original company and the original company
19
had been the interposed company.
20
Note:
This section treats the original company and the interposed company
21
as having in effect exchanged identities throughout the period before
22
the completion time, but without affecting any of the original
23
company's other attributes.
24
215-50 Effect of change of head company or provisional head
25
company of a MEC group
26
For the purposes mentioned in subsection 215-15(2) in relation to
27
an
*
MRRT year ending after the transition time:
28
(a)
if:
29
(i) a company (the old head company) is the
*
head
30
company of a
*
MEC group at the end of an
*
income
31
year; and
32
Chapter 4
Specialist liability rules
Part 4-7
Entities
Division 215
Consolidated groups
Section 215-55
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
240 Minerals Resource Rent Tax Bill 2011 No. , 2011
(ii) a different company (the new head company) is the
1
head company of the group at the start of the next
2
income year (the transition time); or
3
(b)
if:
4
(i) a company (also the old head company) is the
5
*
provisional head company of a
*
MEC group just before
6
a
*
cessation event happens to the company; and
7
(ii) a different company (also the new head company) is the
8
provisional head company of the group just after that
9
cessation event (also the transition time);
10
everything that happened in relation to the old head company
11
before the transition time is taken to have happened in relation to
12
the new head company instead, just as if the new head company
13
had been the old head company at all times before the transition
14
time.
15
Note 1:
This section treats the new head company as having in effect assumed
16
the identity of the old head company throughout the period before the
17
transition time, but without affecting any of the other attributes of the
18
old head company.
19
Note 2:
A further result is that the old head company is taken to have become
20
a subsidiary member of the group at the transition time.
21
215-55 Effect of group conversions involving MEC groups
22
(1) This section applies if, at a particular time (the conversion time):
23
(a)
a
*
consolidated group (the new group) is
*
created from a
24
*
MEC group (the old group); or
25
(b) a MEC group (the new group) is created from a consolidated
26
group (the old group).
27
(2) For the purposes mentioned in subsection 215-15(2) in relation to
28
an
*
MRRT year ending after the conversion time:
29
(a) the new group is taken to be a continuation of the old group;
30
and
31
(b) the old group is taken not to have ceased to exist for the
32
purposes of subsection 215-10(4); and
33
Specialist liability rules Chapter 4
Entities Part 4-7
Consolidated groups Division 215
Section 215-55
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 241
(c) everything that happened in relation to the
*
head company of
1
the old group before the conversion time is taken instead to
2
have happened in relation to:
3
(i) if the head company of the old group is the same entity
4
as the head company of the new group--that entity in its
5
role as head company of the new group; or
6
(ii) otherwise--the head company of the new group (just as
7
if the head company of the new group had been the head
8
company of the old group at all times before the
9
conversion time).
10
11
Chapter 4
Specialist liability rules
Part 4-7
Entities
Division 220
Partnerships and unincorporated associations and bodies
Section 220-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
242 Minerals Resource Rent Tax Bill 2011 No. , 2011
Division 220--Partnerships and unincorporated
1
associations and bodies
2
Guide to Division 220
3
220-1 What this Division is about
4
This Division contains provisions about the application of the
5
MRRT law to partnerships and unincorporated associations.
6
Note:
Division 444 in Schedule 1 to the Taxation Administration Act 1953
7
contains related provisions.
8
Table of sections
9
Operative provisions
10
220-5 Partnerships
11
220-10
Unincorporated associations and bodies
12
Operative provisions
13
220-5 Partnerships
14
For the avoidance of doubt, for the purposes of the
*
MRRT law,
15
any act, or any omission, of an
*
entity (including any
*
supply,
16
exportation or use by the entity) in the capacity of a partner in a
17
*
partnership is taken:
18
(a) to be an act or omission of the partnership; and
19
(b) not to be an act or omission of the partner or any other
20
partner of the partnership.
21
Note:
Section 444-30 in Schedule 1 to the Taxation Administration Act 1953
22
deals with the liability of partners for the obligations imposed on a
23
partnership under the MRRT law.
24
Specialist liability rules Chapter 4
Entities Part 4-7
Partnerships and unincorporated associations and bodies Division 220
Section 220-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 243
220-10 Unincorporated associations and bodies
1
(1) For the avoidance of doubt, for the purposes of the
*
MRRT law,
2
any act, or any omission, of an
*
entity (including any
*
supply,
3
exportation or use by the entity) in the capacity of a member of the
4
committee of management of an unincorporated association or
5
body of entities is taken:
6
(a) to be an act or omission of the association or body; and
7
(b) not to be an act or omission of any members of the
8
association or body.
9
Note:
Subdivision 444-A in Schedule 1 to the Taxation Administration Act
10
1953 deals with the liability of members for the obligations imposed
11
on an unincorporated association under the MRRT law.
12
(2)
However,
the
*
MRRT law:
13
(a) does not apply in relation to an unincorporated association, or
14
body of entities, that is a joint venture; and
15
(b) applies instead in relation to each
*
entity that is a participant
16
in that venture.
17
18
Chapter 4
Specialist liability rules
Part 4-8
Miscellaneous
Division 225
Rehabilitation tax offsets
Section 225-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
244 Minerals Resource Rent Tax Bill 2011 No. , 2011
Part 4-8--Miscellaneous
1
Division 225--Rehabilitation tax offsets
2
Guide to Division 225
3
225-1 What this Division is about
4
A rehabilitation tax offset can arise if upstream rehabilitation
5
expenditure would not otherwise be taken into account in working
6
out a liability for MRRT (because a mining project interest or
7
pre-mining project interest is winding down or has ended).
8
Table of sections
9
Operative provisions
10
225-5
Object of this Division
11
225-10
Entitlement to rehabilitation tax offsets
12
225-15
Rehabilitation tax offset amounts relating to mining project interests
13
225-20
Rehabilitation tax offset amounts relating to pre-mining project interests
14
225-25
Application of rehabilitation tax offsets
15
Operative provisions
16
225-5 Object of this Division
17
The object of this Division is to provide, in appropriate cases, for
18
offsetting of upstream rehabilitation expenditure that cannot
19
otherwise be applied against a
*
mining profit or
*
pre-mining profit.
20
225-10 Entitlement to rehabilitation tax offsets
21
(1)
An
*
entity has a rehabilitation tax offset for an
*
MRRT year if the
22
entity has a
*
rehabilitation tax offset amount, for the MRRT year,
23
in relation to:
24
Specialist liability rules Chapter 4
Miscellaneous Part 4-8
Rehabilitation tax offsets Division 225
Section 225-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 245
(a) any mining project interest that the entity has at the end of
1
the MRRT year; or
2
(b)
any
*
pre-mining project interest that the entity
*
holds at the
3
end of the MRRT year.
4
(2) However, subsection (1) does not apply if the
*
entity is not, and
5
has never been, liable to pay MRRT, for the
*
MRRT year or any
6
earlier MRRT year.
7
(3) The amount of the rehabilitation tax offset for the
*
MRRT year is
8
the lesser of:
9
(a) the sum of all the rehabilitation tax offset amounts that the
10
*
entity has for the year; and
11
(b) the sum of:
12
(i) all the amounts of MRRT that the entity is or has been
13
liable to pay for all earlier MRRT years, less all the
14
amounts that became payable to the miner under
15
paragraph 225-25(2)(b) for all earlier MRRT years; and
16
(ii) all the entity's
*
MRRT liabilities for the MRRT year,
17
less any offset that the entity has under section 45-5 or
18
45-10 (low profit offsets) for the MRRT year.
19
(4) For the purposes of subsection (2) or paragraph (3)(b), disregard an
20
*
entity's liability to pay MRRT if one or more of the following
21
applies:
22
(a) the liability arose, under Division 721 of the Income Tax
23
Assessment Act 1997, in the entity's capacity as a
*
subsidiary
24
member of a
*
consolidated group or a
*
MEC group;
25
(b) the liability arose, under section 444-5 in Schedule 1 to the
26
Taxation Administration Act 1953, in the entity's capacity as
27
a member of the committee of management of an
28
unincorporated association or body;
29
(c) the liability arose, under section 444-30 in Schedule 1 to the
30
Taxation Administration Act 1953, in the entity's capacity as
31
a partner of a
*
partnership;
32
Chapter 4
Specialist liability rules
Part 4-8
Miscellaneous
Division 225
Rehabilitation tax offsets
Section 225-15
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
246 Minerals Resource Rent Tax Bill 2011 No. , 2011
(d) the liability arose, under section 444-120 in Schedule 1 to the
1
Taxation Administration Act 1953, in the entity's capacity as
2
a
*
trustee of a trust.
3
225-15 Rehabilitation tax offset amounts relating to mining project
4
interests
5
(1) A miner has a rehabilitation tax offset amount, for an
*
MRRT
6
year (the current year), in relation to a mining project interest that
7
the miner has, if:
8
(a)
the
*
suspension day for the mining project interest happened
9
in an earlier MRRT year or the current year; and
10
(b) in the current year, an amount of expenditure (upstream
11
rehabilitation expenditure) was incurred that:
12
(i) is included in
*
mining expenditure for the mining
13
project interest for the current year; and
14
(ii) is necessarily incurred in carrying on
*
mining operations
15
of a kind mentioned in paragraph 35-20(2)(f), or in
16
carrying on activities done in furtherance of mining
17
operations of that kind; and
18
(c)
a
*
mining loss relating to the mining project interest for the
19
current year is extinguished under section 130-15.
20
(2) However, subsection (1) does not apply if neither the miner nor
21
any other
*
entity has, or has ever had, an
*
MRRT liability, for the
22
*
MRRT year or any earlier MRRT year, in relation to the mining
23
project interest.
24
(3)
The
rehabilitation tax offset amount relating to the mining project
25
interest is:
26
Allowable rehabilitation expenditure
*MRRT rate
×
27
where:
28
allowable rehabilitation expenditure is the lesser of:
29
(a) the sum of all the amounts of upstream rehabilitation
30
expenditure that were incurred in the current year in relation
31
to the mining project interest; and
32
Specialist liability rules Chapter 4
Miscellaneous Part 4-8
Rehabilitation tax offsets Division 225
Section 225-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 247
(b) the amount of the
*
mining loss, mentioned in
1
paragraph (1)(c), extinguished under section 130-15.
2
(4)
However,
the
*
rehabilitation tax offset amount cannot exceed the
3
sum of all the
*
MRRT liabilities, of the miner or any other miner,
4
for the mining project interest for the
*
MRRT year and all earlier
5
MRRT years.
6
225-20 Rehabilitation tax offset amounts relating to pre-mining
7
project interests
8
(1)
An
*
entity has a rehabilitation tax offset amount, for an
*
MRRT
9
year (the current year), in relation to a
*
pre-mining project interest
10
that the entity
*
holds if:
11
(a)
the
*
termination day for the pre-mining project interest
12
happened in an earlier MRRT year or the current year; and
13
(b) in the current year, an amount of expenditure (upstream
14
rehabilitation expenditure) was incurred that:
15
(i) is included in
*
pre-mining expenditure for the
16
pre-mining project interest for the current year; and
17
(ii) is necessarily incurred in carrying on
*
pre-mining
18
project operations that would be of a kind mentioned in
19
paragraph 35-20(2)(f) if they related to a mining project
20
interest, or in carrying on activities done in furtherance
21
of mining operations of that kind; and
22
(c)
a
*
pre-mining loss relating to the pre-mining project interest
23
for the current year is extinguished under section 155-25.
24
(2) However, subsection (1) does not apply if neither the
*
entity nor
25
any other entity has, or has ever had, an
*
MRRT liability, for the
26
*
MRRT year or any earlier MRRT year, in relation to the
27
*
pre-mining project interest.
28
(3)
The
rehabilitation tax offset amount relating to the
*
pre-mining
29
project interest is:
30
Allowable rehabilitation expenditure
*MRRT rate
×
31
where:
32
Chapter 4
Specialist liability rules
Part 4-8
Miscellaneous
Division 225
Rehabilitation tax offsets
Section 225-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
248 Minerals Resource Rent Tax Bill 2011 No. , 2011
allowable rehabilitation expenditure is the lesser of:
1
(a) the sum of all the amounts of upstream rehabilitation
2
expenditure that were incurred in the current year in relation
3
to the pre-mining project interest; and
4
(b) the amount of the
*
pre-mining loss, mentioned in
5
paragraph (1)(c),extinguished under section 155-25.
6
(4)
However,
the
*
rehabilitation tax offset amount cannot exceed the
7
sum of all the
*
MRRT liabilities, of the
*
entity or any other entity,
8
for the
*
pre-mining project interest for the
*
MRRT year and all
9
earlier MRRT years.
10
225-25 Application of rehabilitation tax offsets
11
(1)
If
an
*
entity has a
*
rehabilitation tax offset for an
*
MRRT year, the
12
amount of MRRT that (apart from this section) the entity must pay
13
for the MRRT year is reduced by the amount of the offset.
14
Note:
The amount to be reduced is the amount payable under section 10-1
15
(which relates to all of the entity's mining project interests and
16
pre-mining project interests), as reduced by any low profit offset under
17
section 10-15.
18
(2) However, if the amount of the offset exceeds the amount of MRRT
19
that (apart from this section) the
*
entity must pay for the
*
MRRT
20
year:
21
(a) the entity is not required to pay MRRT for the MRRT year;
22
and
23
(b) the Commissioner must, on behalf of the Commonwealth,
24
pay to the entity the amount of the excess.
25
Note 1:
See Division 3A of Part IIB of the Taxation Administration Act 1953
26
for the rules about how the Commissioner must pay the entity.
27
Division 3 of Part IIB of that Act allows the Commissioner to apply
28
the amount owing as a credit against tax debts that the entity owes to
29
the Commonwealth.
30
Note 2:
Interest is payable under the Taxation (Interest on Overpayments and
31
Early Payments) Act 1983 if the Commissioner is late in refunding the
32
amount.
33
Specialist liability rules Chapter 4
Miscellaneous Part 4-8
Rehabilitation tax offsets Division 225
Section 225-25
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 249
(3) If the amount paid under paragraph (2)(b), or applied under the
1
Taxation Administration Act 1953, exceeds the
*
entity's proper
2
entitlement under that paragraph, that excess is to be treated as if it
3
were MRRT that became payable, and due for payment, by the
4
entity at the time when the amount was so paid or applied.
5
Note:
The main effect of treating the amount as if it were MRRT is to apply
6
the collection and recovery rules in Part 3-10 in Schedule 1 to the
7
Taxation Administration Act 1953, such as a liability to pay the
8
general interest charge under section 105-80 in that Schedule.
9
10
Chapter 5
Miscellaneous
Division 235
Miscellaneous
Section 235-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
250 Minerals Resource Rent Tax Bill 2011 No. , 2011
Chapter 5--Miscellaneous
1
2
Division 235--Miscellaneous
3
235-1 Regulations
4
The Governor-General may make regulations prescribing matters:
5
(a) required or permitted by this Act to be prescribed; or
6
(b) necessary or convenient to be prescribed for carrying out or
7
giving effect to this Act.
8
9
Interpreting this Act Chapter 6
Rules for interpreting this Act Part 6-1
Rules for interpreting this Act Division 245
Section 245-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 251
Chapter 6--Interpreting this Act
1
Part 6-1--Rules for interpreting this Act
2
Division 245--Rules for interpreting this Act
3
245-1 What forms part of this Act
4
(1) The following all form part of this Act:
5
(a) the headings of the Chapters, Parts, Divisions and
6
Subdivisions of this Act;
7
(b) a provision covered by section 245-10 (non-operative
8
provisions);
9
(c) the headings of the sections and subsections of this Act;
10
(d) the headings for groups of sections of this Act (group
11
headings);
12
(e) the notes and examples (however described) that follow
13
provisions of this Act.
14
(2) The asterisks used to identify defined terms form part of this Act.
15
However, if a term is not identified by an asterisk, disregard that
16
fact in deciding whether or not to apply to that term a definition or
17
other interpretation provision.
18
245-5 What does not form part of this Act
19
The following do not form part of this Act:
20
(a) footnotes and endnotes;
21
(b) tables of Subdivisions;
22
(c) tables of sections.
23
245-10 Guides and other non-operative provisions, and their role in
24
interpreting this Act
25
(1) The provisions covered by this section are:
26
Chapter 6
Interpreting this Act
Part 6-1
Rules for interpreting this Act
Division 245
Rules for interpreting this Act
Section 245-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
252 Minerals Resource Rent Tax Bill 2011 No. , 2011
(a) any section in Division 2, 3 or 4; or
1
(b) any section that has as its heading "What this Division is
2
about".
3
(2) These provisions form part of this Act, but they are not operative
4
provisions. In interpreting another provision in this Act (an
5
operative provision), non-operative provisions may only be
6
considered:
7
(a) in determining the purpose or object underlying the operative
8
provision; or
9
(b) to confirm that the operative provision's meaning is the
10
ordinary meaning conveyed by its text, taking into account its
11
context in the Act and the purpose or object underlying the
12
provision; or
13
(c) in determining the operative provision's meaning if the
14
provision is ambiguous or obscure; or
15
(d) in determining the operative provision's meaning if the
16
ordinary meaning conveyed by its text, taking into account its
17
context in the Act and the purpose or object underlying the
18
provision, leads to a result that is manifestly absurd or is
19
unreasonable.
20
21
Interpreting this Act Chapter 6
Meaning of some important concepts Part 6-2
Meaning of hold Division 250
Section 250-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 253
Part 6-2--Meaning of some important concepts
1
Division 250--Meaning of hold
2
Guide to Division 250
3
250-1 What this Division is about
4
The concept of hold is relevant to:
5
(a)
determining who is entitled to a starting base loss
6
for an asset; and
7
(b)
determining depreciation amounts relevant for the
8
alternative valuation method; and
9
(c)
entitlement to pre-mining project interests.
10
Table of sections
11
Operative provisions
12
250-5 Meaning
of
hold
13
250-10
When certain starting base assets are held
14
250-15
Things that are jointly held
15
Operative provisions
16
250-5 Meaning of hold
17
(1)
An
*
entity holds a thing referred to in subsection (2) if:
18
(a) the thing is a
*
depreciating asset that the entity holds (within
19
the meaning of section 40-40 of the Income Tax Assessment
20
Act 1997); or
21
(b) the entity would hold the thing (within the meaning of that
22
section) if it were a depreciating asset.
23
Chapter 6
Interpreting this Act
Part 6-2
Meaning of some important concepts
Division 250
Meaning of hold
Section 250-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
254 Minerals Resource Rent Tax Bill 2011 No. , 2011
(2) The things are as follows:
1
(a)
a
*
starting base asset relating to a mining project interest (or
2
any property or right that is expected to be a starting base
3
asset after the time mentioned in subsection 80-25(2));
4
(b) an asset to which section 175-40 applies;
5
(c)
a
*
pre-mining project interest.
6
(3)
However,
the
*
entity that has a mining project interest is taken to
7
hold the
*
starting base asset that is or includes the rights and
8
interests constituting the mining project interest.
9
250-10 When certain starting base assets are held
10
Assets treated as a single starting base asset
11
(1) Despite section 250-5, a miner holds a single
*
starting base asset to
12
which subsection 80-30(2) applies for the period during which the
13
miner would be taken, under section 250-5, to hold the
*
constituent
14
assets of the single starting base asset.
15
Mine development expenditure
16
(2) Despite section 250-5, a miner holds a
*
starting base asset that is
17
*
mine development expenditure relating to a mining project
18
interest from the day the expenditure was incurred until the day on
19
which the miner ceases to have the mining project interest.
20
250-15 Things that are jointly held
21
The
*
MRRT law applies to a thing referred to in subsection
22
250-5(2) (the underlying thing) that an
*
entity
*
holds, and that is
23
also held by one or more other entities, as if each entity's interest
24
in the thing were itself the underlying thing.
25
Note:
Partners do not hold partnership assets: see subsection 250-5(1) and
26
table item 7 in section 40-40 of the Income Tax Assessment Act 1997.
27
28
Interpreting this Act Chapter 6
Meaning of some important concepts Part 6-2
Integrated mining project interests Division 255
Section 255-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 255
Division 255--Integrated mining project interests
1
Guide to Division 255
2
255-1 What this Division is about
3
The concept of integration of mining project interests is relevant to:
4
(a)
whether a royalty credit for a mining project
5
interest can be applied in working out a transferred
6
royalty allowance for another mining project
7
interest; and
8
(b)
whether mining project interests are combined in a
9
single mining project interest.
10
Note 1:
For availability of royalty credits in working out transferred royalty
11
allowances, see section 65-20.
12
Note 2:
For when mining project interests are combined, see
13
Subdivision 115-B.
14
Table of sections
15
Operative provisions
16
255-5
Upstream integration of mining project interests
17
255-10
Downstream integration of mining project interests
18
255-15 Meaning
of
downstream mining operations
19
255-20 Choice
to
integrate
20
Operative provisions
21
255-5 Upstream integration of mining project interests
22
A mining project interest is integrated with another mining project
23
interest at a time if:
24
(a) the same miner has both of the interests; and
25
(b)
either:
26
Chapter 6
Interpreting this Act
Part 6-2
Meaning of some important concepts
Division 255
Integrated mining project interests
Section 255-10
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
256 Minerals Resource Rent Tax Bill 2011 No. , 2011
(i) both the interests relate to iron ore; or
1
(ii) both the interests do not relate to iron ore; and
2
(c) each of those interests relate to the same mine or proposed
3
mine.
4
Note:
Multiple mining project interests that are managed as a single
5
operation and covered by a single mine plan would usually relate to
6
the same mine.
7
255-10 Downstream integration of mining project interests
8
A mining project interest is also integrated with another mining
9
project interest at a time if:
10
(a) the same miner has both of the interests; and
11
(b)
either:
12
(i) both the interests relate to iron ore; or
13
(ii) both the interests do not relate to iron ore; and
14
(c)
either
the
*
downstream
mining operations for each of the
15
interests, or the
*
mining operations as a whole for each of the
16
interests, are, taking account of the following matters,
17
integrated:
18
(i) the manner in which those operations are carried on;
19
(ii) the extent of integration of the use or operation of
20
infrastructure or equipment in carrying on those
21
operations; and
22
(d) the miner has made a valid choice under section 255-20.
23
255-15 Meaning of downstream mining operations
24
(1)
*
Mining operations for a mining project interest are downstream
25
mining operations for the mining project interest to the extent the
26
operations are not
*
upstream mining operations.
27
Note: For
upstream mining operations, see section 35-15.
28
Examples: The following are some examples of operations or activities that might
29
be downstream mining operations:
30
(a) treating taxable resources by crushing, weighing, sampling,
31
assaying and refining them after extraction (if this is after the
32
valuation point for the resources);
33
Interpreting this Act Chapter 6
Meaning of some important concepts Part 6-2
Integrated mining project interests Division 255
Section 255-20
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 257
(b) training, engaging, employing, paying, accommodating and
1
ensuring the safety of personnel, and other supportive head office
2
activities, to the extent they are involved in operations or
3
activities relating to getting the taxable resources from the
4
valuation point into the form they are in when the mining
5
revenue event happens;
6
(c) developing plans and engineering specifications for, and
7
constructing, facilities (whether in the project area or not) to be
8
used in recovering, transporting and storing taxable resources
9
after they reach their valuation point but before they are in the
10
form they are in when the mining revenue event happens;
11
(d) acquiring and maintaining plant or equipment for use in
12
recovering, transporting or storing taxable resources after they
13
reach their valuation point but before they are in the form they
14
are in when the mining revenue event happens;
15
(e) upgrading computer software used to control inventory (like
16
consumables and spare parts) used for recovering, transporting or
17
storing taxable resources after they reach their valuation point but
18
before they are in the form they are in when the mining revenue
19
event happens.
20
(2) It does not matter where, or when, the operations are carried out.
21
255-20 Choice to integrate
22
(1) A choice under this section is to treat all mining project interests of
23
the miner that satisfy paragraphs 255-10(1)(a) to (d) at any time as
24
*
integrated, including interests the miner starts to have after
25
making the choice.
26
(2) The choice does not cease to have effect even if there are no
27
mining project interests that satisfy paragraphs 255-10(1)(a) to (d)
28
at a time.
29
(3) However, the choice ceases to have effect in relation to a particular
30
mining project interest after the miner that made the choice stops
31
having the interest.
32
Note:
Division 119 in Schedule 1 to the Taxation Administration Act 1953 is
33
about choices under the MRRT law.
34
Chapter 6
Interpreting this Act
Part 6-3
Dictionary
Division 300
Dictionary
Section 300-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
258 Minerals Resource Rent Tax Bill 2011 No. , 2011
Part 6-3--Dictionary
1
Division 300--Dictionary
2
300-1 Dictionary
3
In this Act:
4
Aboriginal person has the meaning given by subsection 4(1) of the
5
Aboriginal and Torres Strait Islander Act 2005.
6
accounting principles has the meaning given by subsection
7
995-1(1) of the Income Tax Assessment Act 1997.
8
accounting standard has the same meaning as in the Corporations
9
Act 2001.
10
adjustable value:
11
(a)
of
a
*
starting base asset, has the meaning given by subsection
12
165-10(7); and
13
(b) of a disposed asset (within the meaning of section 165-35),
14
has the meaning given by subsection 165-35(2).
15
affiliate has the meaning given by subsection 995-1(1) of the
16
Income Tax Assessment Act 1997.
17
allowance component means any of the following:
18
(a)
a
*
royalty credit;
19
(b)
a
*
pre-mining loss;
20
(c)
a
*
mining loss;
21
(d)
a
*
starting base loss.
22
approved form has the meaning given by subsection 995-1(1) of
23
the Income Tax Assessment Act 1997.
24
arm's length has the meaning given by subsection 995-1(1) of the
25
Income Tax Assessment Act 1997.
26
Interpreting this Act Chapter 6
Dictionary Part 6-3
Dictionary Division 300
Section 300-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 259
arm's length consideration has the meaning given by
1
section 30-30.
2
arrangement has the meaning given by subsection 995-1(1) of the
3
Income Tax Assessment Act 1997.
4
assessed MRRT means MRRT, as assessed under Schedule 1 to
5
the Taxation Administration Act 1953.
6
assessment has the meaning given by subsection 995-1(1) of the
7
Income Tax Assessment Act 1997.
8
auditing standard has the same meaning as in the Corporations
9
Act 2001.
10
Australia, when used in a geographical sense, includes:
11
(a) all the external Territories other than the Australian Antarctic
12
Territory; and
13
(b) an area that is an offshore area for the purposes of the
14
Offshore Petroleum and Greenhouse Gas Storage Act 2006.
15
Australian law has the meaning given by subsection 995-1(1) of
16
the Income Tax Assessment Act 1997.
17
Australian permanent establishment has the meaning given by
18
subsection 995-1(1) of the Income Tax Assessment Act 1997.
19
base value has the meaning given by subsection 90-5(1).
20
cessation event has the meaning given by subsection 995-1(1) of
21
the Income Tax Assessment Act 1997.
22
CGT asset has the meaning given by subsection 995-1(1) of the
23
Income Tax Assessment Act 1997.
24
closely associated has the meaning given by subsection 95-20(5).
25
Commissioner means the Commissioner of Taxation.
26
Commonwealth law has the meaning given by subsection 995-1(1)
27
of the Income Tax Assessment Act 1997.
28
Chapter 6
Interpreting this Act
Part 6-3
Dictionary
Division 300
Dictionary
Section 300-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
260 Minerals Resource Rent Tax Bill 2011 No. , 2011
connected with has the meaning given by subsection 995-1(1) of
1
the Income Tax Assessment Act 1997.
2
consolidatable group has the meaning given by subsection
3
995-1(1) of the Income Tax Assessment Act 1997.
4
consolidated group has the meaning given by subsection 995-1(1)
5
of the Income Tax Assessment Act 1997.
6
constituent asset:
7
(a)
of
a
*
starting base asset that is treated as a single starting base
8
asset because of section 80-30, means any of the things
9
mentioned in paragraphs 80-30(1)(a) to (d) that are treated as
10
the single starting base asset; or
11
(b) of a starting base asset that is treated as a single starting base
12
asset because of subsection 180-10(3), means any of the
13
starting base assets that are, under that subsection, treated as
14
the single starting base asset.
15
cost base has the meaning given by subsection 995-1(1) of the
16
Income Tax Assessment Act 1997.
17
created: in relation to a
*
consolidated group or
*
MEC group, has
18
the meaning given by subsection 995-1(1) of the Income Tax
19
Assessment Act 1997.
20
decreasing adjustment has the meaning given by section 195-1 of
21
the
*
GST Act.
22
depreciating asset has the meaning given by subsection 995-1(1)
23
of the Income Tax Assessment Act 1997.
24
derivative financial arrangement has the meaning given by
25
subsection 995-1(1) of the Income Tax Assessment Act 1997.
26
diminishing value method has the meaning given by subsection
27
995-1(1) of the Income Tax Assessment Act 1997.
28
downstream mining operations has the meaning given by
29
section 255-15.
30
Interpreting this Act Chapter 6
Dictionary Part 6-3
Dictionary Division 300
Section 300-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 261
effective life has the meaning given by subsection 995-1(1) of the
1
Income Tax Assessment Act 1997.
2
entity has the meaning given by subsection 995-1(1) of the Income
3
Tax Assessment Act 1997.
4
equity interest has the meaning given by subsection 995-1(1) of the
5
Income Tax Assessment Act 1997.
6
excluded expenditure has the meaning given by Subdivision 35-B.
7
excluded STB has the meaning given by subsection 995-1(1) of the
8
Income Tax Assessment Act 1997.
9
exploration or prospecting has the meaning given by subsection
10
995-1(1) of the Income Tax Assessment Act 1997.
11
exploration right has the meaning given by subsection 70-25(3).
12
extract, in relation to a
*
taxable resource, means extract the taxable
13
resource in any way, and includes recovering the taxable resource
14
from the place where it occurs.
15
financial arrangement has the meaning given by subsection
16
995-1(1) of the Income Tax Assessment Act 1997.
17
financial year has the meaning given by subsection 995-1(1) of the
18
Income Tax Assessment Act 1997.
19
foreign currency has the meaning given by subsection 995-1(1) of
20
the Income Tax Assessment Act 1997.
21
foreign currency hedge has the meaning given by subsection
22
995-1(1) of the Income Tax Assessment Act 1997.
23
foreign law has the meaning given by subsection 995-1(1) of the
24
Income Tax Assessment Act 1997.
25
general interest charge has the meaning given by subsection
26
995-1(1) of the Income Tax Assessment Act 1997.
27
GST has the meaning given by section 195-1 of the
*
GST Act.
28
Chapter 6
Interpreting this Act
Part 6-3
Dictionary
Division 300
Dictionary
Section 300-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
262 Minerals Resource Rent Tax Bill 2011 No. , 2011
GST Act has the meaning given by subsection 995-1(1) of the
1
Income Tax Assessment Act 1997.
2
head company has the meaning given by subsection 995-1(1) of
3
the Income Tax Assessment Act 1997.
4
higher ranking allowance, in relation to an
*
MRRT allowance,
5
means any other MRRT allowance that, under section 10-10, is
6
applied earlier than that allowance in working out a miner's
7
*
MRRT liability.
8
hire purchase agreement has the meaning given by subsection
9
995-1(1) of the Income Tax Assessment Act 1997.
10
hold a thing mentioned in subsection 250-5(2) has the meaning
11
given by Division 250.
12
income tax law has the meaning given by subsection 995-1(1) of
13
the Income Tax Assessment Act 1997.
14
income year has the meaning given by subsection 995-1(1) of the
15
Income Tax Assessment Act 1997.
16
increasing adjustment has the meaning given by section 195-1 of
17
the
*
GST Act.
18
index number has the meaning given by subsection 995-1(1) of the
19
Income Tax Assessment Act 1997.
20
initial supply has the meaning given by section 30-20.
21
input tax credit has the meaning given by section 195-1 of the
22
*
GST Act.
23
installed ready for use has the meaning given by subsection
24
995-1(1) of the Income Tax Assessment Act 1997.
25
instalment income has the meaning given by subsection 995-1(1)
26
of the Income Tax Assessment Act 1997.
27
instalment quarter has the meaning given by subsection 995-1(1)
28
of the Income Tax Assessment Act 1997.
29
Interpreting this Act Chapter 6
Dictionary Part 6-3
Dictionary Division 300
Section 300-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 263
integrated, in relation to mining project interests, has the meaning
1
given by Division 255.
2
interim expenditure, in relation to a
*
starting base asset relating to
3
a mining project interest, has the meaning given by section 90-55.
4
long term bond rate, for a period, has the meaning given by
5
subsection 995-1(1) of the Income Tax Assessment Act 1997.
6
market value has a meaning affected by Subdivision 960-S of the
7
Income Tax Assessment Act 1997.
8
MEC group has the meaning given by subsection 995-1(1) of the
9
Income Tax Assessment Act 1997.
10
member has the meaning given by subsection 995-1(1) of the
11
Income Tax Assessment Act 1997.
12
mine development expenditure has the meaning given by
13
subsection 80-35(3).
14
miner means an
*
entity that has a
*
mining project interest.
15
mining expenditure has the meaning given by Division 35.
16
mining loss has the meaning given by section 75-20.
17
mining loss allowance has the meaning given by section 75-10.
18
mining operations has the meaning given by section 35-20.
19
mining profit has the meaning given by Division 25.
20
mining project interest has the meaning given by section 15-5.
21
mining project split has the meaning given by subsection
22
125-10(3).
23
mining project transfer has the meaning given by subsection
24
120-10(3).
25
Chapter 6
Interpreting this Act
Part 6-3
Dictionary
Division 300
Dictionary
Section 300-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
264 Minerals Resource Rent Tax Bill 2011 No. , 2011
mining, quarrying or prospecting information has the meaning
1
given by subsection 995-1(1) of the Income Tax Assessment Act
2
1997.
3
mining revenue has the meaning given by Division 30.
4
mining revenue event has the meaning given by section 30-15.
5
mining royalty has the meaning given by subsection 35-45(1).
6
mining venture has the meaning given by subsection 15-5(3).
7
MRRT means minerals resource rent tax imposed by any of the
8
following:
9
(a)
the
Minerals Resource Rent Tax (Imposition--General) Act
10
2011;
11
(b)
the
Minerals Resource Rent Tax (Imposition--Customs) Act
12
2011;
13
(c)
the
Minerals Resource Rent Tax (Imposition--Excise) Act
14
2011.
15
MRRT allowance has the meaning given by section 10-10.
16
MRRT benefit has the meaning given by section 210-15.
17
MRRT disadvantage has the meaning given by subsection
18
210-30(2).
19
MRRT law means:
20
(a) this Act; and
21
(b) any Act that imposes MRRT; and
22
(c)
the
Taxation Administration Act 1953, so far as it relates to
23
any Act covered by paragraphs (a) and (b); and
24
(d) any other Act, so far as it relates to any Act covered by
25
paragraphs (a) to (c) (or to so much of that Act as is covered);
26
and
27
(e) regulations under an Act, so far as they relate to any Act
28
covered by paragraphs (a) to (d) (or to so much of that Act as
29
is covered).
30
Interpreting this Act Chapter 6
Dictionary Part 6-3
Dictionary Division 300
Section 300-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 265
MRRT liability has the meaning given by section 10-5.
1
MRRT rate has the meaning given by the following:
2
(a) section 4 of the Minerals Resource Rent Tax (Imposition--
3
General) Act 2011;
4
(b) section 4 of the Minerals Resource Rent Tax (Imposition--
5
Customs) Act 2011;
6
(c) section 4 of the Minerals Resource Rent Tax (Imposition--
7
Excise) Act 2011.
8
MRRT year has the meaning given by section 10-25.
9
non-cash benefit has the meaning given by subsection 995-1(1) of
10
the Income Tax Assessment Act 1997.
11
opening adjustable value has the meaning given by subsection
12
995-1(1) of the Income Tax Assessment Act 1997.
13
originates, in relation to a mining project interest and a
14
*
pre-mining project interest, has the meaning given by subsection
15
70-20(2).
16
partnership has the meaning given by subsection 995-1(1) of the
17
Income Tax Assessment Act 1997.
18
pre-mining expenditure has the meaning given by section 70-35.
19
pre-mining loss has the meaning given by section 70-30.
20
pre-mining loss allowance has the meaning given by
21
section 70-10.
22
pre-mining loss cap has the meaning given by section 95-30.
23
pre-mining profit has the meaning given by section 140-5.
24
pre-mining project interest has the meaning given by
25
section 70-25.
26
pre-mining project operations has the meaning given by
27
subsection 70-35(5).
28
Chapter 6
Interpreting this Act
Part 6-3
Dictionary
Division 300
Dictionary
Section 300-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
266 Minerals Resource Rent Tax Bill 2011 No. , 2011
pre-mining project split has the meaning given by subsection
1
150-10(2).
2
pre-mining project transfer has the meaning given by subsection
3
145-10(2).
4
pre-mining revenue has the meaning given by section 70-40.
5
prime cost method has the meaning given by subsection 995-1(1)
6
of the Income Tax Assessment Act 1997.
7
private mining royalty has the meaning given by subsection
8
35-45(2).
9
production right has the meaning given by section 15-15.
10
project area has the meaning given by section 15-20 or subsection
11
70-25(4).
12
provisional head company of a
*
MEC group has the meaning
13
given by subsection 995-1(1) of the Income Tax Assessment Act
14
1997.
15
recoupment has the meaning given by subsection 995-1(1) of the
16
Income Tax Assessment Act 1997.
17
rehabilitation tax offset has the meaning given by section 225-10.
18
rehabilitation tax offset amount:
19
(a) in relation to a mining project interest--has the meaning
20
given by section 225-15; and
21
(b) in relation to a
*
pre-mining project interest--has the meaning
22
given by section 225-20.
23
resource marketing operations has the meaning given by
24
subsection 30-25(7).
25
royalty includes the meaning given by subsection 995-1(1) of the
26
Income Tax Assessment Act 1997.
27
royalty allowance has the meaning given by section 60-10.
28
Interpreting this Act Chapter 6
Dictionary Part 6-3
Dictionary Division 300
Section 300-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 267
royalty credit has the meaning given by section 60-20.
1
scheme has the meaning given by subsection 995-1(1) of the
2
Income Tax Assessment Act 1997.
3
shortfall interest charge has the meaning given by subsection
4
995-1(1) of the Income Tax Assessment Act 1997.
5
split percentage:
6
(a) for a new interest a miner has just after a
*
mining project
7
split--has the meaning given by section 125-15; and
8
(b) for a new interest an
*
entity has just after a
*
pre-mining
9
project split--has the meaning given by subsections
10
150-15(5) and (6).
11
starting base adjustment for a
*
starting base asset, has the meaning
12
given by section 165-20.
13
starting base adjustment amount for a
*
starting base asset, has the
14
meaning given by section 165-10.
15
starting base adjustment event, for a
*
starting base asset, has the
16
meaning given by section 165-5.
17
starting base allowance has the meaning given by section 80-10.
18
starting base asset relating to a mining project interest has the
19
meaning given by section 80-25 and subsection 80-35(1).
20
starting base days has the meaning given by subsections 80-40(6)
21
and (7).
22
starting base loss, for a mining project interest, has the meaning
23
given by section 80-20.
24
starting base return means a return of the kind referred to in
25
section 117-20 in Schedule 1 to the Taxation Administration Act
26
1953, that complies with all the requirements of that section and
27
section 117-25 (if applicable) in that Schedule and section 388-75
28
in that Schedule.
29
Chapter 6
Interpreting this Act
Part 6-3
Dictionary
Division 300
Dictionary
Section 300-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
268 Minerals Resource Rent Tax Bill 2011 No. , 2011
start time, for a
*
starting base asset relating to a mining project
1
interest, has the meaning given by subsection 80-25(2).
2
State law has the meaning given by subsection 995-1(1) of the
3
Income Tax Assessment Act 1997.
4
subsidiary member has the meaning given by subsection 995-1(1)
5
of the Income Tax Assessment Act 1997.
6
supply has the meaning given by section 195-1 of the
*
GST Act.
7
suspension day has the meaning given by section 130-10.
8
taxable resource has the meaning given by Division 20.
9
taxation law has the meaning given by subsection 995-1(1) of the
10
Income Tax Assessment Act 1997.
11
termination day:
12
(a) for a mining project interest, has the meaning given by
13
section 135-5; or
14
(b)
for
a
*
pre-mining project interest, has the meaning given by
15
section 155-5.
16
termination value, of a
*
starting base asset, has the meaning given
17
by subsection 165-10(3) and (4).
18
Territory law has the meaning given by subsection 995-1(1) of the
19
Income Tax Assessment Act 1997.
20
Torres Strait Islander has the meaning given by subsection 4(1) of
21
the Aboriginal and Torres Strait Islander Act 2005.
22
transfer pricing guidelines has the meaning given by subsection
23
205-15(2).
24
transferred mining loss allowance has the meaning given by
25
section 100-10.
26
transferred pre-mining loss allowance has the meaning given by
27
section 95-10.
28
Interpreting this Act Chapter 6
Dictionary Part 6-3
Dictionary Division 300
Section 300-1
_____________________________________
*To find definitions of asterisked terms, see the Dictionary, starting at section 300-1.
Minerals Resource Rent Tax Bill 2011 No. , 2011 269
transferred royalty allowance has the meaning given by
1
section 65-10.
2
transformative operations has the meaning given by subsection
3
30-25(6).
4
trustee has the meaning given by subsection 995-1(1) of the
5
Income Tax Assessment Act 1997.
6
upstream mining operations has the meaning given by
7
section 35-15.
8
valuation point for a
*
taxable resource has the meaning given by
9
Division 40.
10