Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 417 - Timor Sea petroleum  

Subdivision 417-D - Transferring or applying tax losses  

SECTION 417-90   Tax losses from transitioned petroleum activities  
Transferring tax losses attributable to activities undertaken before the Timor Sea Maritime Boundaries Treaty entered into force

417-90(1)    
If:

(a) you have a *tax loss for the income year in which the *Timor Sea Maritime Boundaries Treaty entered into force, or for an earlier income year; and

(b) some or all of the tax loss is attributable to you undertaking *transitioned petroleum activities before that treaty entered into force;

you may, for that income year or a later income year, choose to transfer all or any part of the amount of the tax loss that is so attributable to a *corporate tax entity (the transferee ) that is your *associate and either is an Australian resident or has a *permanent establishment in Australia.

Transferring or applying other tax losses

417-90(2)    
If:

(a) you have a *tax loss for an income year (the loss year ); and

(b) some or all of the tax loss is attributable to you undertaking *transitioned petroleum activities; and

(c) paragraph (1)(b) does not apply to those activities;

you may, for that income year or a later income year:

(d) choose to transfer all or any part of the amount of the tax loss that is so attributable to a *corporate tax entity (the transferee ) that either is an Australian resident or has a *permanent establishment in Australia; or

(e) choose to apply all or any part of the amount of the tax loss that is so attributable as a deduction from your assessable income for any of the 4 income years preceding the income year for which you make the choice.

417-90(3)    
However:

(a) the total amount chosen to be transferred or applied under subsection (2) for an income year must not exceed 10% of the total amount:

(i) on which your liability for *foreign income tax under the law of Timor-Leste is required to be worked out; and

(ii) that relates to undertaking those *transitioned petroleum activities during that year; and

(b) you cannot make a choice under paragraph (2)(e) for an income year if you do not have a *franking surplus at the end of that year; and

(c) the total amount chosen to be applied under paragraph (2)(e) for an income year must not exceed the sum of:

(i) the amount of your franking surplus at the end of that year; and

(ii) the product of the amount of that surplus and the *corporate tax gross-up rate.

417-90(4)    
In working out for the purposes of paragraph (3)(a) the total amount chosen to be transferred or applied under subsection (2) for an income year, disregard:

(a) any part of the *tax loss attributable to deductions for assets allocated to a project pool under section 417-35 ; and

(b) any part of the *tax loss attributable to deductions for assets allocated to a project pool under Subdivision 40-I , to the extent that the deductions relate to *project amounts to which subsection 417-45(1) or (2) applies.

417-90(5)    
In working out for the purposes of paragraph (3)(a) the total amount on which your liability for *foreign income tax under the law of Timor-Leste is required to be worked out, disregard the amounts of any deductions for tax paid under the law of Timor-Leste.

417-90(6)    
Paragraphs (3)(b) and (c) do not apply if you were a foreign resident (other than a *NZ franking company) for more than half of the income year for which the choice was made.