• Legal database
Legal database

ZZGN v Commissioner of Taxation

[2013] AATA 351

ZZGN
v.Commissioner of Taxation

Tribunal:
Administrative Appeals Tribunal

President D Kerr
Senior Member C R Walsh

Subject References:
Petroleum Resource Rent Tax
exploration expenditure
exploration expenditure incurred in relation to a petroleum project
payments liable to be made in carrying on or providing 'operations and facilities involved in or in connection with exploration for petroleum'
exploration for petroleum in the eligible exploration or recovery area in relation to the project
permit derived production licence
production licence
general project expenditure
operations and facilities preparatory to the activities
feasibility or environmental study
operations, facilities and other things comprising a petroleum project
petroleum project
carrying forward of undeducted expenditure
excluded expenditure
transferrable expenditure
transfer of unused exploration expenditure between group companies
procuring the carrying on of operations by others
Commissioner's objection decision affirmed in part and set aside in part and remitted to Commissioner for reconsideration in accordance with the Tribunal's reasons for decision and directions

Legislative References:
Customs Act 1901 (Cth) - s 164
Environment Protection and Biodiversity Conservation Act 1999 (Cth) - The Act
Excise Act 1901 (Cth) - s 78A
Excise Tariff Act 1921 (Cth) - The Act
Heritage Conservation Act 1991 (NT) - The Act
Income Tax Assessment Act 1936 (Cth) - s 83; s 122; s 123AA; s 124AH; Division 10; Division 10AA
Income Tax Assessment Act 1946 (Cth) - The Act
Income Tax Assessment Act 1997 (Cth) - s 330-20; Division 330; s 40-730(4); Division 40
Northern Territory Environmental Assessment Act 1982 (NT) - The Act
Petroleum (Submerged Lands) Act 1967 (Cth) - s 5; s 19; s 28; s 33; s 39A; s 40
Petroleum (Submerged Lands) Royalty Act 1967 (Cth) - The Act
Petroleum Resource Rent Tax Assessment Act 1987 (Cth) - s 2; s 2B; s 4; s 5; s 19(1); s 19(4); s 21; s 22; s 23; s 33; s 34; s 34A; s 35; s 35A; s 37(1); s 38(a); s 38(b); s 41; s 44; s 45A; s 45B; Schedule, Part 4
Petroleum Resource Rent Tax Assessment Bill 1986 (Cth) -
Petroleum Resource Rent Tax Assessment Bill 1987 (Cth) -
Petroleum Resource Rent Tax Legislation Amendment Act 1991 (Cth) - The Act
Taxation Administration Act 1953 (Cth) - s 14ZZK
Taxation Laws Amendment Act (No 3) 2003 (Cth) - Schedule 5

Case References:
Federal Commissioner of Taxation v. Australia and New Zealand Savings Bank Ltd - (1994) 94 ATC 4844
Berry v. Federal Commissioner of Taxation - (1953) 89 CLR 653
Burswood Management Limited and Others v. Attorney-General (Cth) and Another - (1990) 23 FCR 144
Claremont Petroleum NL v. Cummings & Another - (1992) 110 ALR 239
Collector of Customs v. Cliffs Robe River Iron Associates - (1985) 7 FCR 271
Collector of Customs v. Pozzolanic Enterprises Pty Ltd - (1993) 43 FCR 280
Commissioner of Taxation v. Ampol Exploration Ltd - (1986) 13 FCR 545
Customs and Excise Commissioners v. Top Ten Promotions - [1969] 1 WLR 1163
Esso Australia Resources Ltd v. Federal Commissioner of Taxation - (1997) 144 ALR 458
Esso Australia Resources Ltd v. Federal Commissioner of Taxation - (1998) 84 FCR 541
Esso Australia Resources Pty Ltd v. Federal Commissioner of Taxation - (2012) 200 FCR 100
Federal Commissioner of Taxation v. Broken Hill Pty Co Ltd - (1969) 120 CLR 240
Federal Commissioner of Taxation v. Dalco - (1990) 90 ATC 4088
Federal Commissioner of Taxation v. Greenhatch - (2012) 203 FCR 134
Hatfield v. Health Insurance Commission - (1987) 15 FCR 487
HP Mercantile Pty Ltd v. Commissioner of Taxation - (2005) 143 FCR 553
Minister for Immigration and Ethnic Affairs v. Pochi - (1980) 4 ALD 139
Mitsui & Co (Australia) Ltd v. Commissioner of Taxation - [2012] FCAFC 109
Mount Isa Mines Limited v. Federal Commissioner of Taxation - (1954) 92 CLR 483
Nanaimo Community Hotel Ltd v. British Columbia - [1944] 4 DLR 638
NSW Associated Blue-Metal Quarries Limited v. Federal Commissioner of Taxation - (1956) 94 CLR 509
Project Blue Sky Inc v. Australian Broadcasting Authority - (1998) 194 CLR 355
Re BHP Petroleum Pty Ltd and Collector of Customs - (1987) 11 ALD 413
Re Heaney SM Ex Parte Flint v. Nexus Minerals NL - (unreported, Supreme Court, FC, WA, Malcolm CJ, Kennedy and Pidgeon JJ, No 1652 of 1996, 26 February 1997)
Re His Honour Warden Calder SM ex parte Lee - (2007) 34 WAR 289
Re Kirby and Collector of Customs - (1989) 20 ALD 369
Robe River Mining Co Pty Ltd v. Commissioner of Taxation - (1989) 21 FCR 1
Stevens v. Kabushiki Kaisha Sony Computer Entertainment and Others - (2005) 224 CLR 193
Transfield ER Futures Ltd v. The Ship "Giovanna Iulianao" - [2012] FCA 548
Travelex Ltd v. Federal Commissioner of Taxation - (2010) 241 CLR 510
Tweddle v. Federal Commissioner of Taxation - (1942) 180 CLR 1
Visy Packaging Holdings Pty Ltd v. Commissioner of Taxation - [2012] FCA 1195
Woodside Energy Ltd v. Federal Commissioner of Taxation (No 1) - (2006) 155 FCR 357
Woodside Energy Ltd v. Federal Commissioner of Taxation (No 2) - [2007] FCA 1961

Other References:
ABARE Research Report No 96.4, Net Economic Benefits from Australia's Oil and Gas Resources, Australian Bureau of Agricultural and Resource Economics, 1996
Commonwealth Government, Discussion Paper on Resource Rent Tax in the Petroleum Sector, December 1983
Commonwealth Government, Effects on Exploration of Resource Rent Tax with Full Exploration Loss Offsets, February 1984
Explanatory Memorandum to the Petroleum Resource Rent Legislation Amendment Bill 1991
Explanatory Memorandum to the Petroleum Resource Rent Tax Assessment Bill 1987
Joint Press Release of the Federal Treasurer and the Minister for Resources and Energy, Future Taxation Arrangements for the Petroleum Sector, 18 April 1984
Joint Statement of the Federal Treasurer and the Minister for Resources and Energy, Resource Rent Tax on "Greenfields" Offshore Petroleum Projects, 27 June 1984
Kemp, A (1997) Petroleum Rent Collection Around the World, The Institute for Research on Public Policy
Mining Industry Advisory Panel of the Secondary Industries Commission Department of Post-war Reconstruction, Second Report (Mining Taxation), 1945
Second Reading of the Petroleum Resource Rent Tax Assessment Bill 1987, Minister for Primary Industries and Energy, 21 October 1987 (House of Representatives, Debates (1987) Vol HR157, pp 1215-1217)
Second Reading Speech of the Petroleum Resource Rent Legislation Amendment Bill 1991, Treasurer, 9 May 1991 (House of Representatives, Debates (1991) Vol HR177, pp 3435-3438)
Taxation Ruling IT 2642 , 27 June 1991
Taxation Ruling TR 98/23 , 16 December 1998

Hearing date: 5-9 November 2012
Decision date: 5 April 2013

Perth

DECISION

473. In accordance with s 43(1)(a) of the Administrative Appeals Tribunal Act 1975 (Cth), the Tribunal affirms the Commissioner's objection decision (dated 9 August 2010) in part, namely to the extent that the Commissioner allowed the Applicant a deduction for the Company C Billed Expenditure, Company A Direct Expenditure and the Allocated Expenditure objected to by the Applicant in its objection (dated 16 June 2008).

474. In accordance with s 43(1)(c)(ii) of the Administrative Appeals Tribunal Act 1975 (Cth), the Tribunal sets aside the Commissioner's objection decision (dated 9 August 2010) in part, namely to the extent that the Commissioner did not allow the Applicant a deduction for the Company C Billed Expenditure, Company A Direct Expenditure and the Allocated Expenditure objected to by the Applicant in its objection (dated 16 June 2008), and remits the matter to the Commissioner for reconsideration in accordance with the following Reasons for Decision and subject to the following directions:

(i)
In the month following this decision, only the parties to the application (including their instructing solicitors and counsel) are to be provided with a copy of these Reasons;
(ii)
The parties have one month to reach written agreement (and file a copy of that agreement with the Tribunal) concerning any issues of confidentiality that the parties submit ought to be reflected in its published form of the Reasons for Decision. If the parties fail to reach an agreement on this issue within the specified time, the matter is to be listed for directions before the Tribunal; and
(iii)
The parties have one month to reach a written agreement (and file a copy of that agreement with the Tribunal) concerning the quantum of each of the amounts of disputed expenditure. If the parties fail to reach an agreement on this issue within the specified time, the matter is to be listed for directions before the Tribunal.

Counsel for the Applicant
Mr J W de Wijn QC
Mr A T Broadfoot

Solicitors for the Applicant
Ms S Blakelock, Ashurst

Counsel for the Respondent
Mr S Steward SC
Mr A D Pound
Ms C Pierce

Solicitors for the Respondent
Mr T Burrows, Australian Government Solicitor


Back to top