Taxation Determination

TD 2019/1W

Income tax: what constitutes 'use' (and potentially first use) of a mining, quarrying or prospecting right, that is a depreciating asset, for the purposes of subsection 40-80(1) of the Income Tax Assessment Act 1997?

• Please note that the PDF version is the authorised version of this withdrawal notice.
  There is a Compendium for this document: TD 2019/1EC .
  This document has changed over time. View its history.

Notice of Withdrawal

Taxation Determination TD 2019/1 is withdrawn with effect from 2 February 2023.

1. TD 2019/1 explains what constitutes 'use' of a mining, quarrying or prospecting right (MQPR), that is a depreciating asset, for the purposes of subsection 40-80(1) of the Income Tax Assessment Act 1997. The Commissioner ruled that you 'first use' an MQPR when you do something that the MQPR permits or authorises and that merely holding an MQPR does not constitute a 'use' of it.

2. This Determination is inconsistent with the decision by the Full Federal Court in Commissioner of Taxation v Shell Energy Holdings Australia Limited [2022] FCAFC 2, where it was held that the 'first use' of an MQPR corresponded with when the MQPR was taken to be held by the taxpayer.

3. The Commissioner considers that the decision of the Full Federal Court provides certainty in relation to what constitutes 'use' of an MQPR and no new ruling is required.

4. The Determination does not apply to schemes entered into after its withdrawal.

Commissioner of Taxation
1 February 2023

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

References

ATO references:
NO 1-SORG8GN