Supplementary Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)Glossary
The following abbreviations and acronyms are used throughout this supplementary explanatory memorandum.
| Abbreviation | Definition |
| Bill | Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill 2017 |
General outline and financial impact
Amendments to the Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill 2017
The amendments to the Bill:
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- revise the period when minerals exploration companies can make an application to the Australian Taxation Office for an exploration credits allocation for the 2017-18 income year. This is necessary because the Bill was not passed by Parliament in 2017 and the 1 February 2018 start date provided in the Bill for making applications has already passed; and
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- clarify the definition of 'unused allocation of exploration credits' through a technical amendment to ensure the scheme operates as intended.
Date of effect: consistent with the Bill, the amendments apply to expenditure incurred in the 2017-18, 2018-19, 2019-20 and 2020-21 income years.
Proposal announced: The amendments have not previously been announced.
Financial impact: The amendments do not alter the financial impact outlined in the explanatory memorandum to the Bill.
Compliance cost impact: The amendments have no additional compliance cost impact.
Amendments to the Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill 2017
Outline of chapter
1.1 The amendments to the Bill:
- •
- revise the period when minerals exploration companies can make an application to the Australian Taxation Office for an exploration credits allocation for the 2017-18 income year. This is necessary because the Bill was not passed by Parliament in 2017 and the 1 February 2018 start date provided in the Bill for making applications has already passed; and
- •
- clarify the definition of 'unused allocation of exploration credits' through a technical amendment to ensure the scheme operates as intended.
Detailed explanation of new law
Amendments to the Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill 2017
Applications for the 2017-18 income year
1.2 The amendments alter the application period for the 2017-18 year so that it starts on the later of the commencement of the Bill, or the eleventh business day after the Bill receives the Royal Assent. Consistent with the current Bill, applications can be made to the Commissioner of Taxation for the period of one month from the date the application period begins. [Amendment 2]
Amendment to the definition of 'unused allocation of exploration credits'
1.3 The amendments clarify the definition of 'unused allocation of exploration credits', and how that definition is intended to be affected by other rules in the Bill. [Amendment 1]
1.4 The amount of 'unused allocation of exploration credits' is used to determine how many credits can be created and issued by a minerals explorer for the income year. Other provisions in the Bill restrict the amount of credits that may be issued to investors in relation to an exploration investment by the amount of paid up capital in the minerals explorer.
1.5 The amendments make it clear that the restriction on the amount of credits that can be issued is also intended to apply when determining how many credits may be created, and to whom credits may be issued. This is because a minerals explorer is not intended to have an unused allocation of exploration credits to the extent that it cannot ever use that allocation and issue credits to investors. This clarification is achieved by adding a new subsection, which defines the 'total credits issue for investment' as the amount that may be issued by the minerals explorer in compliance with the restriction on how many credits may be issued to an investor. [Amendment 1]
1.6 If credits cannot ever be issued by a minerals explorer, the corresponding amount of exploration credit allocation should not be included in calculations to determine the maximum amount of exploration credits that may be created, or the amount of exploration credits that are in the issue pool for investors. This prevents any unintended consequences that may arise. Other minor consequential changes are also made to the section as a result of this addition.