Petroleum Resource Rent Tax Assessment Act 1987

PART V - LIABILITY TO TAXATION

Division 3 - Deductible expenditure

SECTION 41 EFFECT OF PROCURING THE CARRYING ON OF OPERATIONS ETC. BY OTHERS

41(1)

If a person (the eligible person ) makes or made a payment wholly or partly to procure the carrying on or providing of operations, facilities or other things of a kind referred to in section 37 , 38 or 39 by another person, then:

(a) for the purposes of this Act:

(i) the operations, facilities or other things are taken to have been carried on or provided by the eligible person and not by the other person; and

(ii) to the extent that the payment is to procure the carrying on or providing of the operations, facilities or other things - it is taken to have been made by the eligible person in carrying on or providing the operations, facilities or other things; and

(b) if subsection (1A) does not apply to the other person in relation to the payment - to the extent that the payment is to procure the carrying on or providing of the operations, facilities or other things, the payment is taken, for the purposes of sections 37 , 38 , 39 and 44 , to have the same character and nature as the operations, facilities or other things procured; and

(c) if subsection (1A) applies to the other person in relation to the payment - to the extent that:

(i) the payment is to procure the carrying on or providing of the operations, facilities or other things; and

(ii) the payment relates to use of property on which the other person has incurred capital expenditure;
the payment is taken, for the purposes of those sections, to have the same character and nature as the operations, facilities or other things procured; and

(d) if subsection (1A) applies to the other person in relation to the payment - to the extent that:

(i) the payment is to procure the carrying on or providing of the operations, facilities or other things; and

(ii) the payment does not relate to use of property on which the other person has incurred capital expenditure;
the payment is taken, for the purposes of those sections, to be of the same amount, and to have the same character and nature, as the expenditure the other person incurred in carrying on or providing the operations, facilities or other things procured.

Note:

If the payment is excluded expenditure, it will not be exploration expenditure under section 37 , general project expenditure under section 38 or closing-down expenditure under section 39 . However, if paragraph (1)(d) applies to the payment, the amount taken to be excluded expenditure may be reduced under subsection (1D) of this section.

View history note

History

S 41(1) substituted by No 124 of 2013, s 3 and Sch 6 item 9, effective 29 June 2013. No 124 of 2013, s 3 and Sch 6 item 11 contains the following application provision:

11 Application of amendments
(1)
The amendments made by this Schedule apply, in relation to a petroleum project, to any payment made by a person on or after:

(a) the applicable commencement date in relation to the project, unless paragraph (b) or (c) applies; or

(b) the starting base day for the person ' s interest in the project under subsection 45(5) of the Petroleum Resource Rent Tax Assessment Act 1987 , if:

(i) the project is an onshore petroleum project or the North West Shelf project, or an onshore petroleum project is a pre-combination project in relation to the project; and

(ii) item 2 or 3 of the table in that subsection sets out that starting base day; or

(c) the day provided under subclause 15(3) or (4) of Schedule 2 to that Act, in relation to the asset to which the payment relates, if:

(i) the project is an onshore petroleum project or the North West Shelf project, or an onshore petroleum project is a pre-combination project in relation to the project; and

(ii) the person chose, under Part 2 of that Schedule, the book value approach or the market value approach for the person ' s interest in the project; and

(iii) the payment is interim expenditure, within the meaning of clause 15 of that Schedule, in relation to that asset.

(2)
Despite subitem (1), the amendments made by items 9 and 10 do not apply in relation to a payment by a person that was made:

(a) before 1 July 2012; and

(b) in relation to a petroleum project for which the person has been required under section 59 of the Petroleum Resource Rent Tax Assessment Act 1987 to furnish a return before 14 December 2012.

(3)
Despite subitem (1), the amendments made by items 9 and 10 apply in relation to a payment by a person that was made:

(a) before 1 July 2013; and

(b) in relation to a petroleum project for which the person has not been required under section 59 of the Petroleum Resource Rent Tax Assessment Act 1987 to furnish a return before 14 December 2012;
as if subsection 41(1A) of that Act as amended by this Schedule did not apply, in relation to the payment, to the other person referred to in subsection 41(1) of that Act as so amended.

(4)
For the purposes of this item, a person is taken to make a payment when the person becomes liable to make the payment.

S 41(1) formerly read:

41(1)
Where a person (in this section referred to as the eligible person ) incurs or incurred a liability to make a payment to procure the carrying on or providing of operations, facilities or other things of a kind referred to in section 37 , 38 or 39 by another person, then, for the purposes of this Act:

(a) the operations, facilities or other things shall be taken to have been carried on or provided by the eligible person and not by the other person; and

(b) the liability shall be taken to have been incurred by the eligible person in carrying on or providing the operations, facilities or other things.

41(1A)

View history reference

This subsection applies to the other person in relation to a payment if, at the time the payment is made, the other person:

(a) holds an interest in the petroleum project to which the operations, facilities or other things relate; or

(b) is connected (within the meaning of section 328-125 of the Income Tax Assessment Act 1997 ) with the eligible person.

View history note

41(1B)

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The amount of the other person ' s expenditure referred to in paragraph (1)(d) is taken not to exceed so much of the amount of the eligible person ' s payment as:

(a) is a payment to procure the carrying on or providing of the operations, facilities or other things; and

(b) does not relate to use of property on which the other person has incurred capital expenditure.

View history note

41(1C)

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If:

(a) subsection (1A) applies to the other person in relation to the payment; and

(b) the other person, to any extent, procures for:

(i) the eligible person; or

(ii) the eligible person and one or more persons who hold an interest in the project;
the operations, facilities or other things from a third person who is connected (within the meaning of section 328-125 of the Income Tax Assessment Act 1997 ) with the other person;

the references in paragraph (1)(d) and subsection (1B) to the other person ' s expenditure are taken (to the extent that carrying on or providing the operations, facilities or other things was procured from the third person) to be references to the third person ' s expenditure.

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41(1D)

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If the other person ' s expenditure is reduced because of subsection (1B), sections 37 , 38 , 39 and 44 apply in relation to that expenditure as if it were reduced to the same extent.

View history note

41(2)

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This section does not apply if the other person carries on or provides the operations, facilities or other things as part of the processing of:

(a) internal petroleum in relation to the petroleum project; or

(b) external petroleum in relation to a petroleum project other than the project to which the operations, facilities or other things referred to in subsection (1) relate.

View history note

41(3)

View history reference

For the purposes of this section, a person is taken to make a payment when the person becomes liable to make the payment.

View history note

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