Petroleum Resource Rent Tax Assessment Act 1987

PART V - LIABILITY TO TAXATION  

Division 3 - Deductible expenditure  

SECTION 40   BAD DEBTS  

40(1)    
Where:

(a) a debt is a bad debt and is written off as such by a person during a financial year; and

(b) the debt has been brought to account by the person as a receipt of a kind referred to in section 24 , 25 , 27 , 28 or 29 derived by the person in any financial year in relation to a petroleum project;

then, at the time at which the debt is written off and in relation to:

(c) the petroleum project; or

(d) if, at that time, there is a combined project in relation to which the petroleum project is a pre-combination project - the combined project;

the person shall be taken for the purposes of this Act to have incurred an amount of:

(e) where at or before the time at which the debt is written off the person has not incurred any general project expenditure or closing-down expenditure in relation to the petroleum project or the combined project (including any pre-combination project in relation to the project) - exploration expenditure;

(f) where at or before the time at which the debt is written off the person has incurred general project expenditure, but has not incurred any closing-down expenditure, in relation to the petroleum project or the combined project (including any pre-combination project in relation to the project) - general project expenditure; or

(g) where at or before the time at which the debt is written off the person has incurred closing-down expenditure in relation to the petroleum project or the combined project - closing-down expenditure;

equal to the amount of the debt.

40(2)    

If a debtor, after incurring a debt that has been brought to account as mentioned in paragraph (1)(b), becomes bankrupt or executes a personal insolvency agreement for the benefit of creditors:

(a) where, in the opinion of the Commissioner, no amount will be paid on account of the debt - the debt; or

(b) where, in the opinion of the Commissioner, an amount less than the amount of the debt will be paid on account of the debt - so much of the debt as exceeds the amount that, in the opinion of the Commissioner, will be so paid;

shall be deemed to be a bad debt.

40(3)    
Where a person receives an amount in respect of a debt to which subsection (1) applies, that amount shall for the purposes of this Act be taken to be a receipt of the kind referred to in paragraph (1)(b) derived by the person in relation to:

(a) the petroleum project referred to in that paragraph; or

(b) if, at the time at which the amount is received, there is a combined project in relation to which the petroleum project referred to in that paragraph is a pre-combination project - the combined project.