Commonwealth Numbered Acts Commonwealth Numbered ActsPetroleum Resource Rent Tax Assessment Act 1987
1 Section 2
Insert:
"annual transfer" has the meaning given by subsection 45E(4).
2 Section 2
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"instalment transfer" has the meaning given by subsection 45E(5).
3 Section 2
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"instalment transfer charge" period has the meaning given by subsection 98A(4).
4 Section 2
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"instalment transfer excess" has the meaning given by subsection 98A(1).
5 Section 2
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"instalment transfer interest charge" has the meaning given by subsection 98A(4).
6 Section 2
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"liable person" has the meaning given by subsection 98A(1).
7 At the end of Division 3A of Part V
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45E Instalment transfers and annual transfers
(1) Subject to this section, the following provisions apply in relation to instalment periods in the same way as they apply in relation to financial years:
(a) this Division;
(b) the Schedule;
(c) definitions or other provisions of this Act as they apply for the purpose of this Division or the Schedule.
Note: A person who contravenes section 45A or 45B as the section applies in relation to an instalment period commits an offence: see subsections 45A(5) and 45B(5).
(2) The provisions mentioned in subsection (1) apply under that subsection only to the extent necessary to require or permit the making of transfers of expenditure in relation to instalment periods.
(3) For the purpose of subsection (1), the following assumptions apply in relation to any petroleum project and an instalment period in a financial year:
(a) the instalment period is taken to be a financial year;
(b) the amounts taken by subsections 33(3), 34(3), 34A(4), 35(3) and 36(1) (including because of section 48) to be incurred by any person in relation to any project on the first day of the financial year are instead taken to be only the instalment percentages of those amounts;
(c) the amounts that would, for the purposes of the Schedule, be the incurred exploration expenditure amounts in relation to financial years before that financial year are instead taken to be only the instalment percentages of those amounts.
(4) In this Act, an annual transfer is a transfer of an amount of expenditure in accordance with this Division in its application to a financial year.
(5) In this Act, an instalment transfer is a transfer of an amount of expenditure in accordance with this Division in its application under this section to an instalment period.
(6) Despite subsection 45D(3), if an instalment transfer of an amount of expenditure is made in relation to an instalment period in a financial year, the instalment transfer does not prevent the transfer of all (or a part) of that expenditure being made again:
(a) in relation to a later instalment period; or
(b) in relation to the financial year or a later financial year (as an annual transfer).
Note: In some circumstances, interest may be charged in relation to an instalment transfer if the expenditure cannot be transferred again under this Division as an annual transfer: see section 98A.
(7) In this section:
"instalment period" includes a period in a financial year that would be an instalment period if the financial year were a year of tax.
8 After paragraph 97(1A)(a)
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(aa) without limiting paragraph (a)—any instalment transfers in relation to the instalment period were annual transfers in relation to the year of tax; and
9 At the end of subsection 97(1A)
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Note: Division 3A of Part V may require or permit the transfer (by instalment transfer ) of transferable exploration expenditure in relation to instalment periods: see section 45E.
10 After section 98
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98A Instalment transfer interest charge—liability
Situation in which charge applies
(1) Subject to subsections (2) and (3), this section applies to a person (the liable person ) in relation to an amount of expenditure (the instalment transfer excess ) if:
(a) an instalment transfer of the amount in relation to an instalment period in a year of tax is made:
(i) by the liable person to a petroleum project under section 45A (as the section applies because of section 45E); or
(ii) to the liable person in relation to a petroleum project under section 45B (as the section applies because of section 45E); and
(b) an annual transfer, in relation to the year of tax, of the amount to the same project, or to the liable person in relation to the same project, cannot be made because of the application of clause 22 or 31 of the Schedule (whether or not there is any other reason preventing such an annual transfer).
Note 1: This section may apply separately to a person in relation to 2 or more instalment transfers in the same year of tax, even if the same instalment transfer amount is transferred between the same projects or companies by each instalment transfer (as allowed under subsection 45E(6)).
Note 2: If a transfer is made by the Commissioner under section 45C because of a failure of a person to make a transfer as required by section 45A or 45B, the transfer is taken to be a transfer by the person under section 45A or 45B (as the case requires): see subsection 45C(4).
Instalment transfer excess—offsets
(2) The amount of the instalment transfer excess (as it would be apart from this subsection), in relation to a petroleum project, is reduced by:
(a) an amount equal to so much of the excess as must be applied or transferred to reduce or eliminate any person’s taxable profit in relation to any petroleum project and the year of tax; and
(b) any amount of expenditure that must be transferred, by annual transfer in relation to the year of tax, to the project, or to the liable person in relation to the project, because the excess cannot be transferred as mentioned in paragraph (1)(b).
(3) This section does not apply if the instalment transfer excess is reduced to zero (or a negative amount) by the operation of subsection (2).
Liability to pay charge
(4) The liable person is liable to pay a charge (the instalment transfer interest charge ) on the instalment transfer excess for each day in the following period (the instalment transfer charge period ) in the year of tax:
(a) if the instalment period to which the excess relates is the first instalment period in the year—the period:
(i) starting at the start of the day on which instalments of tax are due and payable for the first instalment period in the year; and
(ii) ending immediately before the day on which instalments of tax are due and payable in relation to the second instalment period in the year;
(b) if the instalment period to which the excess relates is the second instalment period in the year—the period:
(i) starting at the start of the day on which instalments of tax are due and payable for the second instalment period in the year; and
(ii) ending immediately before the day on which instalments of tax are due and payable in relation to the third instalment period in the year;
(c) if the instalment period to which the excess relates is the third instalment period in the year—the period:
(i) starting at the start of the day on which instalments of tax are due and payable for the third instalment period in the year; and
(ii) ending immediately before the day on which tax is due and payable in relation to the year of tax.
Note 1: For when instalments of tax are payable, see section 95. For when tax is payable in relation to the year of tax, see section 82.
Note 2: For the amount of the charge, see section 98B. For when the charge is payable, see section 98C. For remission of the charge, see section 98D.
Charge payable even if person has transferred interest in project
(5) Despite sections 48 and 48A, the liable person remains liable for the full amount of the instalment transfer interest charge even if the liable person enters into a transaction that has the effect, after the end of the instalment period, of transferring part or all of the liable person’s entitlement to derive assessable receipts in relation to the project.
Statement about charge
(6) The liable person must, on or before the 60th day after the end of the year of tax, give the Commissioner information, in the approved form, for use in working out the instalment transfer interest charge.
Note: Subdivision 388‑B in Schedule 1 to the Taxation Administration Act 1953 applies to approved forms under this section.
(7) In this section:
"first instalment period" , in a year of tax, means the instalment period ending at the end of September in that year.
"second instalment period" , in a year of tax, means the instalment period ending at the end of December in that year.
"third instalment period" , in a year of tax, means the instalment period ending at the end of March in that year.
98B Instalment transfer interest charge—amount
(1) The instalment transfer interest charge on an amount of instalment transfer excess, for a day in an instalment transfer charge period, is worked out by multiplying the rate worked out under subsection (2) by the sum of the following amounts:
(a) the instalment transfer tax; and
(b) the instalment transfer interest charge payable on the excess for the previous days in the instalment transfer charge period.
(2) The rate is:
(3) In this section:
"base interest rate" , for a day, has the meaning given by section 8AAD of the Taxation Administration Act 1953 .
"instalment transfer tax" is the amount worked out by multiplying the instalment transfer excess by the rate at which tax is imposed by the Petroleum Resource Rent Tax Act 1987 in relation to the year of tax in which the instalment period to which the excess relates occurred.
98C Instalment transfer interest charge—notification and payment
Notice of charge payable
(1) The Commissioner must give a liable person a notice stating the amount of instalment transfer interest charge that the liable person is liable to pay for an instalment transfer charge period.
(2) The notice may be included in any other notice given to the liable person by the Commissioner.
(3) A notice given by the Commissioner under this section is prima facie evidence of the matters stated in the notice.
Note: See also section 106.
When payment is due
(4) An amount of instalment transfer interest charge that the liable person is liable to pay is due and payable on the 21st day after the day on which the Commissioner gives the liable person notice of the amount of the charge under this section.
Note: The Commissioner may defer the time at which the charge is, or would become, due and payable: see section 255‑10 in Schedule 1 to the Taxation Administration Act 1953 .
98D Instalment transfer interest charge—remission
Remitting the charge
(1) The Commissioner may remit the whole or a part of an amount of instalment transfer interest charge that a liable person is liable to pay if the Commissioner considers it fair and reasonable to do so.
Reasons for not remitting
(2) The Commissioner must give the liable person a written statement of the reasons for a decision not to remit an amount of instalment transfer interest charge that the liable person is liable to pay, if the liable person requests the Commissioner, in the approved form, to remit the amount.
Note 1: Section 25D of the Acts Interpretation Act 1901 sets out rules about the contents of a statement of reasons.
Note 2: Subdivision 388‑B in Schedule 1 to the Taxation Administration Act 1953 applies to approved forms under this section.
Objecting against remission decision
(3) The liable person may object, in the manner set out in Part IVC of the Taxation Administration Act 1953 , against a decision of the Commissioner not to remit an amount of instalment transfer interest charge that the liable person is liable to pay.
Taxation Administration Act 1953
11 Subsection 250‑10(2) in Schedule 1 (after table item 45)
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| 45A | instalment transfer interest charge | 98C(4) |
Part 2 — Application of amendments
12 Application
The amendments made by Part 1 of this Schedule apply only in relation to instalment transfers under the Petroleum Resource Rent Tax Assessment Act 1987 for financial years that start on or after 1 July 2006.