Petroleum Resource Rent Tax Assessment Act 1987
This Subdivision applies to any arrangement that has been or is entered into on or after 1 July 1984, and to any arrangement that has been or is carried out or commenced to be carried out on or after that date (other than an arrangement that was entered into before that date), where: (a) a person (in this section referred to as the eligible person ) has obtained, or would but for section 53 obtain, a tax benefit in connection with the arrangement; and (b) having regard to:
(i) the manner in which the arrangement was entered into or carried out;
(ii) the form and substance of the arrangement;
(iii) the time at which the arrangement was entered into and the length of the period during which the arrangement was carried out;
(iv) the result in relation to the operation of this Act that, but for this Subdivision, would be achieved by the arrangement;
(v) any change in the financial position of the eligible person that has resulted, will result, or may reasonably be expected to result, from the arrangement;
(vi) any change in the financial position of any person who has, or has had, any connection (whether of a business, family or other nature) with the eligible person, being a change that has resulted, will result or may reasonably be expected to result, from the arrangement;
(vii) any other consequence for the eligible person, or for any person referred to in subparagraph (vi) , of the arrangement having been entered into or carried out; and
(viii) the nature of any connection (whether of a business, family, or other nature) between the eligible person and any person referred to in subparagraph (vi) ;
it would be concluded that the person, or one of the persons, who entered into or carried out the arrangement or any part of the arrangement did so for the sole or dominant purpose of enabling the eligible person to obtain a tax benefit or tax benefits in connection with the arrangement or of enabling the eligible person and another person or other persons each to obtain a tax benefit or tax benefits in connection with the arrangement (whether or not that person who entered into or carried out the arrangement or any part of the arrangement is the eligible person or is the other person or one of the other persons).
[
CCH Note:
S 51A will be inserted by No 67 of 2024, s 3 and Sch 2 item 1, effective 1 October 2024 and applicable in relation to an arrangement that: (a) has been or is entered into on or after 1 July 2023; or (b) has been or is carried out or commenced to be carried out on or after that date (other than an arrangement that was entered into before that date). S 51A will read:
SECTION 51A THE BASES FOR IDENTIFYING TAX BENEFITS
]
51A(1)
This section applies to deciding, under section
51
, whether any of the following (
tax effects
) would have occurred, or might reasonably be expected to have occurred, if an arrangement had not been entered into or carried out:
(a)
an amount of assessable receipts being derived by the person in relation to a petroleum project;
(b)
an amount of deductible expenditure not being incurred by the person in relation to a petroleum project.
51A(2)
A decision that a tax effect would have occurred if the arrangement had not been entered into or carried out must be based on a postulate that comprises only the events or circumstances that actually happened or existed (other than those that form part of the arrangement).
51A(3)
A decision that a tax effect might reasonably be expected to have occurred if the arrangement had not been entered into or carried out must be based on a postulate that is a reasonable alternative to entering into or carrying out the arrangement.
51A(4)
In determining for the purposes of subsection
(3)
whether a postulate is such a reasonable alternative:
(a)
have particular regard to:
(i)
the substance of the arrangement; and
(ii)
any result or consequence for the person that is or would be achieved by the arrangement (other than a result in relation to the operation of this Act); but
(b)
disregard any result in relation to the operation of this Act that would be achieved by the postulate for any person (whether or not a party to the arrangement).
[
CCH Note:
S 52 will be substituted by No 67 of 2024, s 3 and Sch 2 item 1, effective 1 October 2024 and applicable in relation to an arrangement that: (a) has been or is entered into on or after 1 July 2023; or (b) has been or is carried out or commenced to be carried out on or after that date (other than an arrangement that was entered into before that date). S 52 will read:
whether or not that person who entered into or carried out the arrangement or any part of the arrangement is the eligible person or is the other person or one of the other persons.
SECTION 52 ARRANGEMENTS TO WHICH THIS SUBDIVISION APPLIES
]
Arrangement for purpose of obtaining a tax benefit
52(1)
This Subdivision applies to an arrangement if it would be concluded (having regard to the matters in subsection
(2)
) that the person, or one of the persons, who entered into or carried out the arrangement or any part of the arrangement did so for the sole or dominant purpose of:
(a)
enabling a person (an
eligible person
) to obtain a tax benefit or tax benefits in connection with the arrangement; or
(b)
enabling the eligible person and another person or other persons each to obtain a tax benefit or tax benefits in connection with the arrangement;
Have regard to certain matters
52(2)
For the purposes of subsection
(1)
, have regard to the following matters:
(a)
the manner in which the arrangement was entered into or carried out;
(b)
the form and substance of the arrangement;
(c)
the time at which the arrangement was entered into and the length of the period during which the arrangement was carried out;
(d)
the result in relation to the operation of this Act that, but for this Subdivision, would be achieved by the arrangement;
(e)
any change in the financial position of the eligible person that has resulted, will result, or may reasonably be expected to result, from the arrangement;
(f)
any change in the financial position of any person who has, or has had, any connection (whether of a business, family or other nature) with the eligible person, being a change that has resulted, will result or may reasonably be expected to result, from the arrangement;
(g)
any other consequence for the eligible person, or for any person referred to in paragraph
(f)
, of the arrangement having been entered into or carried out;
(h)
the nature of any connection (whether of a business, family, or other nature) between the eligible person and any person referred to in paragraph
(f)
.
Tax benefit
52(3)
Despite subsection
(1)
, this Subdivision applies to the arrangement only if the eligible person has obtained, or would but for section 53 obtain, a tax benefit in connection with the arrangement.
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