Commonwealth Numbered Acts Commonwealth Numbered ActsIncome Tax Assessment Act 1997
1 Section 67-23 (after table item 23)
Insert:
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27 |
exploration development incentive |
the * tax offset available under Subdivision 418-B |
2 At the end of Part 3-45
Add:
Division 418 -- Exploration for minerals
Table of Subdivisions
Guide to Division 418
418-A Object of this Division
418-B Exploration development incentive tax offset
418-C Exploration development incentive franking credit
418-D Creating exploration credits
418-E Issuing exploration credits
418-F Excess exploration credits
418-1 What this Division is about
Generally speaking, you are entitled to a tax offset for exploration credits issued to you, but exploration credits issued to corporate tax entities instead give rise to franking credits.
For the 2015-16, 2016-17 or 2017-18 income year, a greenfields minerals explorer can create, and then issue, exploration credits for the explorer's greenfields minerals expenditure for the previous income year. However, the total amount of exploration credits for an income year is limited to the explorer's maximum exploration credit amount.
The explorer is liable to pay excess exploration credit tax if the explorer issues exploration credits in excess of that maximum exploration credit amount.
Note: Excess exploration credit tax is imposed by the Excess Exploration Credit Tax Act 2015 , and the amount of the tax is set out in that Act.
Subdivision 418-A -- Object of this Division
Table of sections
418-5 Object of this Division
The object of this Division is to encourage investment in minerals exploration in Australia by allowing the benefit of losses from minerals exploration to flow to shareholders who share in the risk of the exploration.
Subdivision 418-B -- Exploration development incentive tax offset
Table of sections
Entitlement to exploration development incentive tax offset
418-10 Who is entitled to the tax offset--ordinary case
418-15 Who is entitled to the tax offset--life insurance company
418-20 Entitlement of member of a trust or partnership to a share of exploration credits
Amount of exploration development incentive tax offset
418-25 The amount of the tax offset
418-30 Reduced amount of the tax offset for certain trusts
Entitlement to exploration development incentive tax offset
418-10 Who is entitled to the tax offset--ordinary case
You are entitled to a * tax offset for an income year if:
(a) an * exploration credit is issued to you under Subdivision 418-E for the income year; and
(b) you are not:
(i) a * corporate tax entity; or
(ii) a trust (other than a trust in relation to which some or all of the liability of the trustee to tax is provided under subsection 98(1) or (2) or 99(2) or (3) of the Income Tax Assessment Act 1936 ); or
(iii) a partnership; or
(iv) an * exempt entity (other than an * exempt institution that is eligible for a refund); and
(c) you are an Australian resident during the whole of that income year.
418-15 Who is entitled to the tax offset--life insurance company
(1) An entity is entitled to a * tax offset for an income year if:
(a) the entity is a * life insurance company; and
(b) an * exploration credit is issued to the entity under Subdivision 418-E for the income year; and
(c) the entity is an Australian resident during the whole of that income year; and
(d) were the exploration credit to be a * franked distribution made:
(i) by the same entity that issued the credit; and
(ii) in the same circumstances in which the credit was issued;
the exploration credit would be a distribution to which paragraph 207-110(1)(b) would apply.
(2) If:
(a) an * exploration credit is issued to a * life insurance company; and
(b) paragraph (1)(d) applies in relation to only part of the exploration credit;
this Division applies as if that part of the exploration credit, and the part of the exploration credit in relation to which that paragraph does not apply, were 2 separate exploration credits issued to the life insurance company.
418-20 Entitlement of member of a trust or partnership to a share of exploration credits
Members taken to be issued with exploration credits
(1) If:
(a) you are a * member of a trust or partnership during the income year; and
(b) an * exploration credit is issued to the trust or partnership under Subdivision 418-E for the income year; and
(c) the trust or partnership is not a * corporate tax entity; and
(d) the trustee of the trust, or the partnership, determines that you are entitled to a share of the exploration credits issued to the trust or partnership for the income year; and
(e) the trustee of the trust, or the partnership, gives you a statement, in accordance with subsection (4), informing you of that entitlement;
you are taken, for the purposes of this Subdivision, to have been issued with an exploration credit under Subdivision 418-E, for the income year, of an amount equal to your share of the exploration credits issued to the trust or partnership for the income year.
Effect of restrictions on distributions
(2) Despite subsection (1), you are not taken, under that subsection, to have been issued with an * exploration credit under Subdivision 418-E to the extent that, if the exploration credit referred to in paragraph (1)(b) were a * franked distribution of the same amount made:
(a) at the time of the determination referred to in paragraph (1)(d); and
(b) in relation to the interest, held by the trust or partnership, in relation to which the exploration credit referred to in paragraph (1)(b) is issued to the trust or partnership during the income year;
the terms and conditions under which the trust or partnership operates would not permit you to be paid the amount, or the proportion, of the franked distribution that would reflect your entitlement referred to in paragraph (1)(d).
Anti-avoidance
(3) Despite subsection (1), you are not taken, under that subsection, to have been issued with an * exploration credit under Subdivision 418-E to the extent that, if the exploration credit were a distribution to you, from the trust or partnership, of a * franked distribution that:
(a) was of the same amount as the amount of your share, referred to in paragraph (1)(d), of the exploration credit referred to in paragraph (1)(b); and
(b) was made:
(i) by the same entity that issued that exploration credit; and
(ii) in relation to the same interest in that entity; and
(iii) in the same circumstances in which that exploration credit was issued; and
(c) * flowed indirectly through one or more trusts or partnerships that were the same as the one or more trusts or partnerships that, apart from subparagraphs 418-10(b)(ii) and (iii), would have been entitled to a * tax offset under this Subdivision in relation to:
(i) that exploration credit; or
(ii) another exploration credit from which that exploration credit is directly or indirectly derived;
you would not be entitled to a tax offset under Division 207 in relation to the franked distribution.
Statements to members
(4) A statement referred to in paragraph (1)(e) must:
(a) be in the * approved form; and
(b) be given to you on or before the due date:
(i) if the trust or partnership is an * investment body for * Part VA investments--for giving to the Commissioner an * annual investment income report in respect of the * financial year corresponding to the income year; or
(ii) otherwise--for the trust or partnership to lodge its * income tax return for the income year.
Reports to the Commissioner
(5) A trust or partnership that has given one or more statements under paragraph (1)(e) relating to * exploration credits for an income year must give to the Commissioner, on or before the due date referred to in paragraph (4)(b) in relation to that income year, a report that:
(a) relates to all the statements that the trust or partnership has given under paragraph (1)(e) relating to exploration credits for that income year; and
(b) is in the * approved form.
Amount of exploration development incentive tax offset
418-25 The amount of the tax offset
The amount of your * tax offset under this Subdivision for an income year is the sum of:
(a) all the * exploration credits issued to you under Subdivision 418-E; and
(b) all the exploration credits taken under section 418-20 to have been issued to you;
for the income year.
418-30 Reduced amount of the tax offset for certain trusts
(1) If an entity is a trust in relation to which some, but not all, of the liability of the trustee to tax is provided under subsection 98(1) or (2) or 99(2) or (3) of the Income Tax Assessment Act 1936 , the amount of the entity's * tax offset under this Subdivision for an income year is:
where:
income taxed under subsection 98(1) or (2) or 99(2) or (3) is the amount of the * net income of the trust, for the income year, in relation to which the trustee is liable to tax under subsection 98(1) or (2) or 99(2) or (3) of the Income Tax Assessment Act 1936 .
(2) If:
(a) an entity is a trust; and
(b) one or more * members of the trust are taken under section 418-20 to have been issued with one or more * exploration credits for an income year;
the amount of the entity's * tax offset, under section 418-25 or subsection (1) of this section, for the income year is reduced by the sum of amounts of the exploration credits taken to be issued to those members.
Subdivision 418-C -- Exploration development incentive franking credit
Table of sections
418-50 Exploration development incentive franking credit--ordinary case
418-55 Exploration development incentive franking credit--life insurance company
418-50 Exploration development incentive franking credit--ordinary case
(1) A * franking credit arises in the * franking account of a * corporate tax entity (other than a * life insurance company) if:
(a) an * exploration credit is issued to the entity under Subdivision 418-E during an income year; and
(b) if the entity were not a corporate tax entity, the entity would be entitled to a * tax offset under Subdivision 418-B in relation to the exploration credit.
(2) The amount of the * franking credit is the amount of the * tax offset to which the entity would be entitled under Subdivision 418-B if:
(a) the entity were not a * corporate tax entity; and
(b) no other * exploration credits were issued to the entity during the income year.
(3) The * franking credit arises at the same time the * exploration credit is issued.
418-55 Exploration development incentive franking credit--life insurance company
(1) A * franking credit arises in the * franking account of a * life insurance company if:
(a) an * exploration credit is issued to the life insurance company under Subdivision 418-E during an income year; and
(b) paragraph 418-15(1)(d) does not apply in relation to the exploration credit; and
(c) if that paragraph were to apply in relation to the credit, the life insurance company would be entitled to a * tax offset under Subdivision 418-B in relation to the exploration credit.
(2) The amount of the * franking credit is the amount of the * tax offset to which the * life insurance company would be entitled under Subdivision 418-B if no other * exploration credits were issued to the life insurance company during the income year.
(3) The * franking credit arises at the same time the * exploration credit is issued.
Subdivision 418-D -- Creating exploration credits
Table of sections
418-70 Entities that may create exploration credits
418-75 Meaning of greenfields minerals explorer
418-80 Meaning of greenfields minerals expenditure
418-85 Exploration credits must not exceed maximum exploration credit amount
418-90 Modulation factors
418-95 Effect on tax losses of creating exploration credits
418-70 Entities that may create exploration credits
(1) An entity may create exploration credits for an income year if:
(a) the entity was a * greenfields minerals explorer in the previous income year; and
(b) on or before 30 September in the * financial year corresponding to the income year, the entity has given to the Commissioner, in the * approved form, a declaration stating:
(i) their estimated * tax loss for the previous income year; and
(ii) their estimated * greenfields minerals expenditure, for the previous income year.
(2) However, the entity cannot create the exploration credits:
(a) before the legislative instrument under section 418-90 declaring the modulation factor for the income year has been registered under Division 2 of Part 4 of the Legislative Instruments Act 2003 ; or
(b) for the 2018-19 income year or a later income year.
(3) A failure to comply with subsection (1) or paragraph (2)(a) does not invalidate the creation of an * exploration credit.
(4) An * exploration credit is to be expressed as a monetary amount.
(5) The entity cannot make more than one decision to create * exploration credits for an income year, and the decision is final and irrevocable.
418-75 Meaning of greenfields minerals explorer
(1) An entity is a greenfields minerals explorer in an income year if:
(a) the entity has * greenfields minerals expenditure for the income year; and
(b) during the income year, the entity is a disclosing entity (within the meaning of section 111AC of the Corporations Act 2001 ); and
(c) during the income year, the entity is a * constitutional corporation; and
(d) during the income year, and during the immediately preceding income year, neither:
(i) the entity; nor
(ii) any other entity that is * connected with or is an * affiliate of the entity;
carried on any mining operations on a mining property for extracting * minerals (except * petroleum) from their natural site, for the * purpose of producing assessable income.
(2) However, an entity is not a greenfields minerals explorer in an income year in which either or both of the following happens, or in any subsequent income year:
(a) the entity fails to comply with a request of the Commissioner under subsection 418-80(5);
(b) a determination under section 418-185 has effect.
Note 1: Under subsection 418-80(5), the Commissioner may request a report on an area in relation to which an entity has greenfields minerals expenditure.
Note 2: Under section 418-185, the Commissioner may determine that an entity that is, or has been, liable to excess exploration credit tax is not to be treated as a greenfields minerals explorer.
418-80 Meaning of greenfields minerals expenditure
(1) An entity's greenfields minerals expenditure for an income year is the sum of:
(a) the amounts of any deductions to which the entity is entitled under section 40-25 for that income year in relation to declines in value that:
(i) are declines in value of * depreciating assets used for * exploration or prospecting for * minerals in an area to which subsection (3) of this section applies; and
(ii) are worked out under subsection 40-80(1); and
(b) the amounts of any deductions for that income year to which the entity is entitled in relation to expenditure:
(i) that is of a kind referred to in subsection 40-730(1); and
(ii) in relation to which the entity satisfies one or more of paragraphs 40-730(1)(a) to (c); and
(iii) that is expenditure on exploration or prospecting for minerals in an area to which subsection (3) of this section applies.
(2) For the purposes of subsection (1), disregard a deduction to the extent that it relates to:
(a) matters other than:
(i) declines in value of * depreciating assets used for; or
(ii) expenditure on;
* exploration or prospecting for * minerals in an area to which subsection (3) of this section applies; or
(b) exploration or prospecting for * petroleum or oil shale; or
(c) activities (such as feasibility studies) undertaken to identify the viability of a mineral resource rather than its existence.
(3) This subsection applies to an area:
(a) that is in Australia; and
(b) in relation to which the entity * holds a * mining, quarrying or prospecting right at the time of incurring the expenditure; and
(c) that has not been identified as containing a mineral resource that is at least inferred in a report prepared in accordance with the requirements of:
(i) unless subparagraph (ii) applies--the document that is known as the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves and that took effect on 20 December 2012; or
Note: This document is commonly referred to as the JORC Code (2012 Edition).
(ii) such other document as the regulations prescribe; and
(d) that is not, and is not in, any of the following:
(i) the coastal sea of Australia (within the meaning of subsection 15B(4) of the Acts Interpretation Act 1901 );
(ii) an offshore area for the purpose of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 ;
(iii) the Joint Petroleum Development Area (within the meaning of the Petroleum (Timor Sea Treaty) Act 2003 ).
Note: An offshore area and the Joint Petroleum Development Area include the territorial sea, the exclusive economic zone and the continental shelf of Australia.
(4) For the purposes of paragraph (3)(c), disregard any mineral resource, identified in a report of a kind referred to in that paragraph, that does not include * minerals the exploration or prospecting for which involved:
(a) use of assets referred to in paragraph (1)(a); or
(b) expenditure referred to in paragraph (1)(b).
(5) The Commissioner may request an entity that is a * greenfields minerals explorer in an income year to prepare, within the period specified in the request, a report that:
(a) is of the kind referred to in paragraph (3)(c); and
(b) relates to an area in relation to which the entity has * greenfields minerals expenditure for the income year.
The request may specify the manner in which, and the form in which, the report is to be prepared.
418-85 Exploration credits must not exceed maximum exploration credit amount
(1) An entity must not create * exploration credits for an income year (the current income year ) of a total amount that exceeds the entity's * maximum exploration credit amount for the income year.
(2) The entity's maximum exploration credit amount for the current income year is worked out as follows:
Method statement
Step 1. Ascertain which of the following is the smallest amount:
(a) the entity's estimated * tax loss for the previous income year, as stated in the entity's declaration under paragraph 418-70(1)(b);
(b) the entity's actual tax loss for the previous income year;
(c) the entity's estimated * greenfields minerals expenditure for the previous income year, as stated in the entity's declaration under paragraph 418-70(1)(b);
(d) the entity's actual greenfields minerals expenditure for the previous income year.
Step 2. Multiply that smallest amount by the * corporate tax rate applying to the previous income year.
Step 3. Multiply the result of step 2 by the modulation factor declared under section 418-90 for the current income year. The result of this step is the entity's maximum exploration credit amount for the current income year.
(3) In working out the entity's actual * tax loss for the previous income year for the purposes of step 1 of the method statement in subsection (2), reduce that tax loss by the sum of:
(a) all * recoupments that the entity receives in relation to the entity's * greenfields minerals expenditure for the previous income year; and
(b) any part of the entity's tax loss for the previous income year that would not be deductible in the current income year; and
(c) if:
(i) an amount has been included in the entity's assessable income because a * balancing adjustment event occurs for a * depreciating asset; and
(ii) all or part of the amount of the deduction to which the entity is entitled under section 40-25 for the previous income year in relation to the decline in value of the asset is included in the entity's greenfields minerals expenditure for that income year;
so much of the amount of that deduction as was included in that greenfields minerals expenditure.
(4) For the purposes of paragraph (3)(b), assume that the entity's assessable income for the current income year is sufficient to allow the entity to utilise the whole of that tax loss in relation to the current income year.
(5) In working out the entity's actual * greenfields minerals expenditure for the previous income year for the purposes of step 1 of the method statement in subsection (2), reduce that greenfields minerals expenditure by the sum of:
(a) all * recoupments that the entity receives in relation to the entity's greenfields minerals expenditure for the previous income year; and
(b) if:
(i) an amount has been included in the entity's assessable income because a * balancing adjustment event occurs for a * depreciating asset; and
(ii) all or part of the amount of the deduction to which the entity is entitled under section 40-25 for the previous income year in relation to the decline in value of the asset is included in the entity's greenfields minerals expenditure for that income year;
so much of the amount of that deduction as was included in that greenfields minerals expenditure.
(6) A failure to comply with this section does not invalidate the creation of an * exploration credit.
(1) The Commissioner must, by legislative instrument, declare modulation factors in accordance with this section for each of the following:
(a) the 2015-16 income year;
(b) the 2016-17 income year;
(c) the 2017-18 income year.
(2) The modulation factor for an income year is to be one if the Commissioner is satisfied that the total amount of * exploration credits that could be created in respect of that income year will not exceed the following amount (the exploration credit cap ) for the income year:
(a) for the 2015-16 income year--$25 million;
(b) for the 2016-17 income year--$35 million;
(c) for the 2017-18 income year--$40 million.
(3) If subsection (2) does not apply, the modulation factor for the income year is to be such a number as the Commissioner is satisfied would reduce the total amount of * exploration credits that could be created in that income year to the exploration credit cap for the income year.
(4) In ascertaining for the purposes of subsection (2) or (3) the total amount of * exploration credits that could be created in an income year (the current income year ), the Commissioner is to:
(a) use the information provided in declarations under paragraph 418-70(1)(b) for the previous income year; and
(b) disregard the possible application of any modulation factor.
(5) A failure to comply with subsection (2), (3) or (4) does not invalidate the declaration of a modulation factor for an income year.
(6) A declaration made under subsection (1) is a legislative instrument, but section 42 (disallowance) of the Legislative Instruments Act 2003 does not apply to the declaration.
418-95 Effect on tax losses of creating exploration credits
(1) If an entity creates any * exploration credits in respect of a * loss year, the amount of the entity's * tax loss for the loss year is reduced by the amount worked out as follows:
(2) However, if the amount worked out under subsection (1) equals or exceeds what would (apart from this section) be the entity's * tax loss for the * loss year, that tax loss is taken to be nil.
Subdivision 418-E -- Issuing exploration credits
Table of sections
418-110 Issuing exploration credits
418-115 Restricting exploration credits to post 1 July 2014 shares
418-120 Exploration credits to be issued on a proportionate basis
418-125 Expiry of exploration credits
418-130 Notifying the Commissioner of issuing or expiry of exploration credits
418-110 Issuing exploration credits
(1) An entity that has created * exploration credits for an income year may issue any of those exploration credits to * members of the entity, in respect of * shares that:
(a) are * equity interests; and
(b) are held by the members.
(2) The * exploration credits are issued by giving each of the * members a statement in the * approved form.
(3) The issuing of * exploration credits is of no effect unless:
(a) the statements under subsection (2) are given to the * members on or before the first 30 June after the day on which the modulation factor in respect of the income year is declared under section 418-90; and
(b) the issuing of credits complies with section 418-120.
418-115 Restricting exploration credits to post 1 July 2014 shares
(1) An entity may, before it has issued any * exploration credits for any income year, choose to restrict the issuing of exploration credits to issuing exploration credits in relation to * shares that:
(a) are * equity interests; and
(b) have come into existence on or after 1 July 2014.
(2) A choice under this section is irrevocable.
418-120 Exploration credits to be issued on a proportionate basis
(1) An entity issuing * exploration credits for an income year must ensure that the total number of exploration credits issued to any * member of the entity for the year, expressed as a percentage of the total number of all exploration credits issued to the members of the entity for the year, is the same as:
(a) if the entity has made a choice under section 418-115--the total number of * shares in the entity that:
(i) are * equity interests held by the member; and
(ii) have come into existence on or after 1 July 2014;
expressed as a percentage of the total number of the shares in the entity that:
(iii) are equity interests held by any members of the entity; and
(iv) have come into existence on or after that day; or
(b) otherwise--the total number of shares in the entity that are equity interests held by the member, expressed as a percentage of the total number of the shares in the entity that are equity interests held by any members of the entity.
(2) For the purposes of this section, the number of * shares that a * member holds in the entity is taken to be the number that the member held on the day occurring 30 days before the * exploration credits were issued.
418-125 Expiry of exploration credits
An * exploration credit created by an entity for an income year expires if the entity does not issue the credit under this Subdivision on or before the first 30 June after the day on which the modulation factor in respect of the income year is declared under section 418-90.
418-130 Notifying the Commissioner of issuing or expiry of exploration credits
(1) An entity that has created * exploration credits for an income year must notify the Commissioner of the issuing or expiry of the credits.
(2) The notice must:
(a) be in the * approved form; and
(b) be given to the Commissioner on or before the due date:
(i) if the entity is an * investment body for * Part VA investments--for giving to the Commissioner an * annual investment income report in respect of the * financial year corresponding to the income year; or
(ii) otherwise--for the entity to lodge its * income tax return for the income year.
Subdivision 418-F -- Excess exploration credits
Table of sections
418-150 Excess exploration credit tax
418-155 Due date for payment of excess exploration credit tax
418-160 Returns
418-165 When shortfall interest charge is payable
418-170 General interest charge
418-175 Refunds of amounts overpaid
418-180 Record keeping
418-185 Determining an entity not to be a greenfields minerals explorer
418-150 Excess exploration credit tax
An entity is liable to pay * excess exploration credit tax for an income year if the sum of the * exploration credits it issues for the income year exceeds the entity's * maximum exploration credit amount for the income year.
Note: The tax is imposed by the Excess Exploration Credit Tax Act 2014 , and the amount of the tax is set out in that Act.
418-155 Due date for payment of excess exploration credit tax
An entity's * excess exploration credit tax for an income year, as assessed under Schedule 1 to the Taxation Administration Act 1953 , is due and payable at the end of the day by which the entity is required under section 418-160 to give the return relating to the income year.
Note: For assessments of excess exploration credit tax, see Division 155 in Schedule 1 to the Taxation Administration Act 1953 .
An entity that is liable to pay * excess exploration credit tax for an income year must give the Commissioner a return relating to excess exploration credit tax, in the * approved form, within 21 days after the end of the * financial year corresponding to the income year.
418-165 When shortfall interest charge is payable
An amount of * shortfall interest charge that an entity is liable to pay is due and payable 21 days after the day on which the Commissioner gives the entity notice of the charge.
Note: Shortfall interest charge is imposed if the Commissioner amends an assessment and the amended assessment results in an increase in some tax payable. For provisions about liability for shortfall interest charge, see Division 280 in Schedule 1 to the Taxation Administration Act 1953 .
418-170 General interest charge
If:
(a) * excess exploration credit tax or * shortfall interest charge payable by an entity remains unpaid after the time by which it is due and payable; and
(b) the Commissioner has not allocated the unpaid amount to an * RBA;
the entity is liable to pay the * general interest charge on the unpaid amount for each day in the period that:
(c) starts at the beginning of the day on which the excess exploration credit tax or shortfall interest charge was due to be paid; and
(d) ends at the end of the last day on which, at the end of the day, any of the following remains unpaid:
(i) the excess exploration credit tax or shortfall interest charge;
(ii) general interest charge on any of the excess exploration credit tax or shortfall interest charge.
Note: The general interest charge is worked out under Part IIA of the Taxation Administration Act 1953 .
418-175 Refunds of amounts overpaid
Section 172 of the Income Tax Assessment Act 1936 applies for the purposes of this Division as if references in that section to tax included references to * excess exploration credit tax.
Section 262A of the Income Tax Assessment Act 1936 applies for the purposes of this Division as if:
(a) the reference in that section to a person carrying on a business were a reference to a * corporate tax entity; and
(b) the reference in paragraph (2)(a) of that section to the person's income and expenditure were a reference to the entity's liability to pay * excess exploration credit tax; and
(c) paragraph (5)(a) of that section were omitted.
418-185 Determining an entity not to be a greenfields minerals explorer
(1) The Commissioner may determine, by written notice given to an entity that is, or has been, liable to pay * excess exploration credit tax for an income year, that the entity is no longer to be treated as a * greenfields minerals explorer.
(2) The determination takes effect from:
(a) if, at the time the notice is given, the entity has not issued any * exploration credits for the income year in which the notice is given--that income year; or
(b) otherwise--the next income year.
(3) If the entity or a * member of the entity is dissatisfied with a determination under subsection (1), the entity or member may object to it in the manner set out in Part IVC of the Taxation Administration Act 1953 .
Income Tax Assessment Act 1936
3 Subsection 6(1)
Insert:
"exploration credit " has the same meaning as in the Income Tax Assessment Act 1997 .
"exploration development incentive tax offset " means a tax offset under Subdivision 418-B of the Income Tax Assessment Act 1997 .
4 After paragraph 177C(1)(bb)
Insert:
(bba) an exploration credit being issued to the taxpayer where the whole or a part of that exploration credit would not have been issued, or might reasonably be expected not to have been issued, to the taxpayer if the scheme had not been entered into or carried out; or
5 After paragraph 177C(1)(f)
Insert:
(fa) in a case where paragraph (bba) applies--the amount of the whole of the exploration credit or of the part of the exploration credit, as the case may be, referred to in that paragraph; and
6 At the end of subsection 177C(2A)
Add:
; or (c) an exploration credit being issued to the taxpayer the whole or a part of which would not have been, or might reasonably be expected not to have been, issued to the taxpayer if the scheme had not been entered into or carried out, where:
(i) the issuing of the exploration credit to the taxpayer is attributable to the making of a choice under Division 418 of the Income Tax Assessment Act 1997 ; and
(ii) the scheme consisted solely of the making of the choice.
7 Subsection 177C(3)
Omit "or (b)(i):", substitute ", (b)(i) or (c)(i):".
8 At the end of paragraph 177C(3)(ca)
Add "or".
9 After paragraph 177C(3)(ca)
Insert:
(cb) the issuing of an exploration credit to a taxpayer;
10 At the end of subsection 177C(3)
Add:
; or (h) the exploration credit would not have been issued.
11 After paragraph 177CB(1)(d)
Insert:
(da) the whole or a part of an exploration credit not being issued to the taxpayer;
12 At the end of paragraph 177F(1)(d)
Add "or".
13 After paragraph 177F(1)(d)
Insert:
(e) in the case of a tax benefit that is referable to an exploration credit, or a part of an exploration credit, being issued to the taxpayer--determine that:
(i) the whole or a part of an exploration development incentive tax offset that would otherwise be allowable to the taxpayer in relation to the exploration credit, or the part of the exploration credit, as the case may be, is not to be allowable to the taxpayer; or
(ii) the whole or a part of a franking credit that would otherwise arise in the franking account of the taxpayer in relation to the exploration credit, or the part of the exploration credit, as the case may be, is not to arise in the franking account of the taxpayer;
14 At the end of paragraph 177F(3)(d)
Add "or".
15 After paragraph 177F(3)(d)
Insert:
(e) if, in the opinion of the Commissioner:
(i) an amount would have been allowed, or would be allowable, to the relevant taxpayer as an exploration development incentive tax offset if the scheme had not been entered into or carried out, being an amount that was not allowed or would not, apart from this subsection, be allowable, as the case may be, as an exploration development incentive tax offset to the relevant taxpayer; and
(ii) it is fair and reasonable that the amount, or a part of the amount, should be allowable as an exploration development incentive tax offset to the relevant taxpayer;
determine that that amount or that part, as the case may be, should have been allowed or is allowable, as the case may be, as an exploration development incentive tax offset to the relevant taxpayer; or
(f) if, in the opinion of the Commissioner:
(i) an amount of a franking credit would have arisen, or would arise, in the franking account of the relevant taxpayer in relation to an exploration credit, being an amount that did not arise, or would not, apart from this subsection, have arisen, as the case may be, in the franking account of the relevant taxpayer in relation to the exploration credit; and
(ii) it is fair and reasonable that the amount, or a part of the amount, should arise, in the franking account of the relevant taxpayer in relation to the exploration credit;
determine that that amount or that part, as the case may be, should have arisen, or arises, as the case may be, in the franking account of the relevant taxpayer in relation to the exploration credit;
Income Tax Assessment Act 1997
16 Section 13-1 (after table item headed "Equine Workers Hardship Wage Supplement Payment")
Insert:
|
exploration for minerals |
|
|
exploration development incentive .................................. |
Subdivision 418-B |
17 At the end of section 36-25
Add:
Tax losses of greenfields minerals explorers
|
Item |
For the special rules about this situation... |
See: |
|
1. |
A greenfields minerals explorer creates exploration credits. |
Section 418-95 |
18 At the end of Subdivision 197-A
Add:
197-42 Exclusion for exploration credits
This Division does not apply to the transferred amount if:
(a) the company transferring the amount is a * greenfields minerals explorer; and
(b) the amount is transferred in connection with the creation of * exploration credits.
19 Subsection 205-15(1) (at the end of the table)
Add:
|
7 |
a * franking credit arises under subsection 418-50(1) in relation to an * exploration credit |
the amount of the * franking credit specified in subsection 418-50(2) |
at the time provided by subsection 418-50(3) |
20 Subsection 219-15(2) (at the end of the table)
Add:
|
8 |
a * franking credit arises under subsection 418-55(1) in relation to an * exploration credit |
the amount of the * franking credit specified in subsection 418-55(2) |
at the time provided by subsection 418-55(3) |
21 Subparagraphs 418-80(2)(b)(ii) and (iii)
Repeal the subparagraphs, substitute:
(ii) an area referred to in subsection 960-505(2); and
22 Subsection 995-1(1)
Insert:
"annual investment income report " means a report, relating to * Part VA investments, that an entity is required to give to the Commissioner, in respect of a * financial year, under the regulations made under the Income Tax Assessment Act 1936 .
23 Subsection 995-1(1) (definition of annual investment income report )
Omit "the regulations made under the Income Tax Assessment Act 1936 ", substitute "section 393-10 in Schedule 1 to the Taxation Administration Act 1953 ".
24 Subsection 995-1(1)
Insert:
"excess exploration credit tax " means tax imposed by the Excess Exploration Credit Tax Act 2015 .
"exploration credit " means an exploration credit created under Subdivision 418-D.
"greenfields minerals expenditure " has the meaning given by section 418-80.
"greenfields minerals explorer " has the meaning given by section 418-75.
"maximum exploration credit amount " has the meaning given by subsection 418-85(2).
25 Subsection 995-1(1) (paragraph (a) of the definition of tax loss )
After "section 415-15", insert "or reduced under section 418-95".
Taxation Administration Act 1953
26 Subsection 8AAB(4) (after table item 16)
Insert:
|
16A |
418-170 |
payment of excess exploration credit tax or shortfall interest charge |
27 Section 45-340 in Schedule 1 (at the end of paragraph (g) of step 1 of the method statement)
Add "; or".
28 Section 45-340 in Schedule 1 (at the end of step 1 of the method statement)
Add:
(h) Subdivision 418-B of the Income Tax Assessment Act 1997 (the exploration development incentive tax offset).
29 Section 45-375 in Schedule 1 (at the end of paragraph (f) of step 1 of the method statement)
Add "; or".
30 Section 45-375 in Schedule 1 (at the end of step 1 of the method statement)
Add:
(g) Subdivision 418-B of the Income Tax Assessment Act 1997 (the exploration development incentive tax offset).
31 At the end of subsection 155-5(2) in Schedule 1
Add:
; (g) an amount of * excess exploration credit tax for an income year.
32 Subsection 155-15(1) in Schedule 1 (at the end of the table)
Add:
|
4 |
an amount of * excess exploration credit tax for an income year |
the Commissioner |
return given under section 418-160 for the income year |
33 Subsection 250-10(2) in Schedule 1 (after table item 38C)
Insert:
|
38D |
excess exploration credit tax |
418-155 |
34 After section 280-100 in Schedule 1
Insert:
280-101 Liability to shortfall interest charge--excess exploration credit tax
(1) You are liable to pay * shortfall interest charge on an additional amount of * excess exploration credit tax that you are liable to pay because the Commissioner amends your assessment for an income year.
(2) The liability is for each day in the period:
(a) beginning at the start of the day on which * excess exploration credit tax under your first assessment for that income year was due to be paid, or would have been due to be paid if there had been any; and
(b) ending at the end of the day before the day on which the Commissioner gave you notice of the amended assessment.
(3) However, if an amended assessment reinstates all or part of a liability in relation to a particular that had been reduced by an earlier amended assessment, the period for the reinstated liability begins at the start of the day on which * excess exploration credit tax under the earlier amended assessment was due to be paid, or would have been due to be paid if there had been any.
Note: See Subdivision 418-F of the Income Tax Assessment Act 1997 for when the amount of excess exploration credit tax and shortfall interest charge becomes due and payable. That Subdivision also provides for general interest charge on any part of the additional amount (plus any shortfall interest charge) that remains unpaid after the additional amount is due and payable.
35 Paragraph 280-105(1)(a) in Schedule 1
After "income tax,", insert " * excess exploration credit tax,".
36 Subsection 280-110(1) in Schedule 1
After "280-100,", insert "280-101,".
37 Subsection 284-80(1) in Schedule 1 (at the end of the table)
Add:
|
5 |
You are liable to pay to the Commissioner an amount of * excess exploration credit tax |
Part 3 -- Repeal of Division 418
Income Tax Assessment Act 1936
38 Subsection 6(1)
Repeal the following definitions:
(a) definition of exploration credit ;
(b) definition of exploration development incentive tax offset .
39 Paragraphs 177C(1)(bba) and (fa)
Repeal the paragraphs.
40 Subparagraph 177C(2A)(b)(ii)
Omit "election; or", substitute "election.".
41 Paragraph 177C(2A)(c)
Repeal the paragraph.
42 Subsection 177C(3)
Omit ", (b)(i) or (c)(i)", substitute "or (b)(i)".
43 Paragraph 177C(3)(ca)
Omit "or".
44 Paragraph 177C(3)(cb)
Repeal the paragraph.
45 Paragraph 177C(3)(g)
Omit "allowable; or", substitute "allowable.".
46 Paragraphs 177C(3)(h) and 177CB(1)(da)
Repeal the paragraphs.
47 Paragraph 177F(1)(d)
Omit "taxpayer; or", substitute "taxpayer.".
48 Paragraph 177F(1)(e)
Repeal the paragraph.
49 Paragraph 177F(3)(d)
Omit "taxpayer; or", substitute "taxpayer.".
50 Paragraphs 177F(3)(e) and (f)
Repeal the paragraphs.
Income Tax Assessment Act 1997
51 Section 13-1 (table item headed "exploration for minerals")
Repeal the item.
52 Section 36-25 (table dealing with tax losses of greenfields minerals explorers)
Repeal the table.
53 Section 67-23 (table item 27)
Repeal the item.
54 Section 197-42
Repeal the section.
55 Subsection 205-15(1) (table item 7)
Repeal the item.
56 Subsection 219-15(2) (table item 8)
Repeal the item.
57 Division 418
Repeal the Division.
58 Subsection 995-1(1)
Repeal the following definitions:
(a) definition of annual investment income report ;
(b) definition of excess exploration credit tax ;
(c) definition of exploration credit ;
(d) definition of greenfields minerals expenditure ;
(e) definition of greenfields minerals explorer ;
(f) definition of maximum exploration credit amount .
59 Subsection 995-1(1) (paragraph (a) of the definition of tax loss )
Omit "or reduced under section 418-95".
Taxation Administration Act 1953
60 Subsection 8AAB(4) (table item 16A)
Repeal the item.
61 Section 45-340 in Schedule 1 (paragraph (g) of step 1 of the method statement)
Omit "spouse); or", substitute "spouse).".
62 Section 45-340 in Schedule 1 (paragraph (h) of step 1 of the method statement)
Repeal the paragraph.
63 Section 45-375 in Schedule 1 (paragraph (f) of step 1 of the method statement)
Omit "spouse); or", substitute "spouse).".
64 Section 45-375 in Schedule 1 (paragraph (g) of step 1 of the method statement)
Repeal the paragraph.
65 Paragraph 155-5(2)(f) in Schedule 1
Omit "year;", substitute "year.".
66 Paragraph 155-5(2)(g) in Schedule 1
Repeal the paragraph.
67 Subsection 155-15(1) in Schedule 1 (table item 4)
Repeal the item.
68 Subsection 250-10(2) in Schedule 1 (table item 38D)
Repeal the item.
69 Section 280-101 in Schedule 1
Repeal the section.
70 Paragraph 280-105(1)(a) in Schedule 1
Omit " * excess exploration credit tax,".
71 Subsection 280-110(1) in Schedule 1
Omit "280-101,".
72 Subsection 284-80(1) in Schedule 1 (table item 5)
Repeal the item.
Part 4 -- Application and saving provisions
Division 1--Application of amendments
73 Application of amendments
(1) The amendments made by Parts 1 and 2 of this Schedule apply in relation to the 2015-16, 2016-17 and 2017-18 income years, but not in relation to any later income years.
(2) Despite subitem (1), item 23 of this Schedule does not apply in relation to an income year commencing before 1 July 2015.
Note: Subitem (2) will apply in relation to early balance substituted accounting periods for the 2015-16 income year.
Division 2--Savings provisions relating to repeal of Division 418
74 Object
The object of this Division is to ensure that, despite the repeals and amendments made by Part 3 of this Schedule, the full legal and administrative consequences of:
(a) any act done or omitted to be done; or
(b) any state of affairs existing; or
(c) any period ending;
before such a repeal or amendment commences, can continue to arise and be carried out, directly or indirectly through an indefinite number of steps, even if some or all of those steps are taken after the repeal or amendment commences.
75 Making and amending assessments, and doing other things, in relation to past matters
Even though an Act is amended by Part 3 of this Schedule, the amendment is disregarded for the purpose of doing any of the following under any Act or legislative instrument:
(a) making or amending an assessment (including under a provision that is itself repealed or amended);
(b) exercising any right or power, performing any obligation or duty or doing any other thing (including under a provision that is itself repealed or amended);
in relation to any act done or omitted to be done, any state of affairs existing, or any period ending, before the amendment commences.
76 Saving of provisions about effect of assessments
If a provision or part of a provision that is repealed or amended by Part 3 of this Schedule deals with the effect of an assessment, the repeal or amendment is disregarded in relation to assessments made, before or after the repeal or amendment commences, in relation to any act done or omitted to be done, any state of affairs existing, or any period ending, before the repeal or amendment commences.
77 Saving of provisions about general interest charge or shortfall interest charge
If:
(a) a provision or part of a provision that is repealed or amended by Part 3 of this Schedule provides for the payment of:
(i) general interest charge or shortfall interest charge (within the meaning of the Income Tax Assessment Act 1997 ); or
(ii) interest under the Taxation (Interest on Overpayments and Early Payments) Act 1983 ; and
(b) in a particular case, the period in respect of which the charge or interest is payable (whether under the provision or under the Taxation Administration Act 1953 ) has not begun, or has begun but not ended, when the provision is repealed or amended;
then, despite the repeal or amendment, the provision or part continues to apply in the particular case until the end of the period.
78 Repeals disregarded for the purposes of dependent provisions
If the operation of a provision (the subject provision ) of any Act or legislative instrument depends to any extent on a provision of an Act, and that provision is repealed by Part 3 of this Schedule, the repeal is disregarded so far as it affects the operation of the subject provision.
79 Division does not limit operation of section 7 of the Acts Interpretation Act 1901
This Division does not limit the operation of section 7 of the Acts Interpretation Act 1901 .
