Tax Laws Amendment (2009 Measures No. 3) Act 2009 (47 of 2009)

Schedule 3   Petroleum resource rent tax

Part 1   Functional currency

Petroleum Resource Rent Tax Assessment Act 1987

17   Section 10

Repeal the section, substitute:

10 Translation of amounts into Australian currency

(1) For the purposes of this Act, an amount in a foreign currency is to be translated into Australian currency.

Examples of an amount

(2) The following are examples of an amount:

(a) an amount of an expense;

(b) an amount of an obligation;

(c) an amount of a liability;

(d) an amount of a receipt;

(e) an amount of a payment;

(f) an amount of consideration;

(g) a value.

Translation rule - assessable receipt

(3) If:

(a) a person derives an assessable receipt in relation to a petroleum project; and

(b) the receipt is in a foreign currency;

the receipt is to be translated into Australian currency at the exchange rate applicable at the time when the receipt is derived.

Translation rule - deductible expenditure

(4) If:

(a) a person incurs deductible expenditure in relation to a petroleum project; and

(b) the expenditure is in a foreign currency;

the expenditure is to be translated into Australian currency at the exchange rate applicable at the time when the expenditure is incurred.

Translation rule - transfer of entire entitlement to assessable receipts

(5) If:

(a) section 48 applies in relation to a transaction; and

(b) a person is a purchaser (within the meaning of section 48) in relation to the transaction; and

(c) the person is taken, under section 48, to have derived or incurred an amount; and

(d) the vendor (within the meaning of section 48) in relation to the transaction has made an election under section 58B (functional currency); and

(e) the election is in effect for the year of tax in which the transfer time (within the meaning of section 48) occurred; and

(f) the amount is in the vendor's applicable functional currency;

the amount is to be translated from the applicable functional currency into Australian currency at the exchange rate applicable at the transfer time (within the meaning of section 48).

Translation rule - transfer of part of entitlement to assessable receipts

(6) If:

(a) section 48A applies in relation to a transaction; and

(b) a person is a purchaser (within the meaning of section 48A) in relation to the transaction; and

(c) the person is taken, under section 48A, to have derived or incurred an amount; and

(d) the vendor (within the meaning of section 48A) in relation to the transaction has made an election under section 58B (functional currency); and

(e) the election is in effect for the year of tax in which the transfer time (within the meaning of section 48A) occurred; and

(f) the amount is in the vendor's applicable functional currency;

the amount is to be translated from the applicable functional currency into Australian currency at the exchange rate applicable at the transfer time (within the meaning of section 48A).

Operation of functional currency provisions unaffected

(7) This section does not affect the operation of Division 7 of Part V (functional currency).