Petroleum Resource Rent Tax Assessment Amendment Act 2012 (18 of 2012)

Schedule 4   Starting base for onshore petroleum projects and the North West Shelf project

Part 1   Main amendments

Petroleum Resource Rent Tax Assessment Act 1987

10   Before section 36

Insert:

35D Acquired exploration expenditure

(1) For the purposes of this Act, a reference to the acquired exploration expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project) is a reference to:

(a) in relation to the financial year commencing on 1 July 2009 - the person's acquired exploration expenditure amount in relation to the project, under clause 19 of Schedule 2; or

(b) in relation to any subsequent financial year - any amount that is taken by subsection (3) or (4) or Division 5 to be acquired exploration expenditure incurred by the person in relation to the project in the financial year.

(2) For the purposes of this Act, a reference to the acquired exploration expenditure incurred by a person in a financial year in relation to a combined project is a reference to:

(a) any amount that is taken by subsection (3) or (4) or Division 5 to be acquired exploration expenditure incurred by the person in relation to the project in the financial year; or

(b) if the project combination certificate in relation to the project came into force in the financial year:

(i) any amount of acquired exploration expenditure; or

(ii) any amount that is taken by subsection (3) or (4) or Division 5 to be acquired exploration expenditure;

incurred by the person in relation to the pre-combination projects in relation to the project in the financial year.

(3) For the purposes of subsection (1) or (2), if:

(a) the sum of:

(i) the class 1 augmented bond rate general expenditure; and

(ii) the class 1 augmented bond rate exploration expenditure; and

(iii) the class 2 augmented bond rate general expenditure; and

(iv) the class 1 GDP factor expenditure; and

(v) the class 2 augmented bond rate exploration expenditure; and

(vi) the class 2 GDP factor expenditure; and

(vii) the resource tax expenditure; and

(viii) the acquired exploration expenditure;

incurred by a person in a financial year (the assessable year ) in relation to the petroleum project exceeds the assessable receipts derived by the person in the assessable year in relation to the project; and

(b) the next financial year starts not later than 5 years after 2 May 2010;

the person is taken to incur, in relation to the project and on the first day of the next financial year, an amount of acquired exploration expenditure worked out in accordance with the formula:

Available excess x Augmented bond rate

where:

augmented bond rate means the long term bond rate in relation to the assessable year plus 1.15.

available excess means so much of the excess as does not exceed the acquired exploration expenditure incurred in the assessable year.

(4) For the purposes of subsection (1) or (2), if:

(a) the sum of:

(i) the class 1 augmented bond rate general expenditure; and

(ii) the class 1 augmented bond rate exploration expenditure; and

(iii) the class 2 augmented bond rate general expenditure; and

(iv) the class 1 GDP factor expenditure; and

(v) the class 2 augmented bond rate exploration expenditure; and

(vi) the class 2 GDP factor expenditure; and

(vii) the resource tax expenditure; and

(viii) the acquired exploration expenditure;

incurred by a person in a financial year (the assessable year ) in relation to the petroleum project exceeds the assessable receipts derived by the person in the assessable year in relation to the project; and

(b) the next financial year starts later than 5 years after 2 May 2010;

the person is taken to incur, in relation to the project and on the first day of the next financial year, an amount of acquired exploration expenditure worked out in accordance with the formula:

Available excess x Augmented bond rate

where:

augmented bond rate means the long term bond rate in relation to the assessable year plus 1.05.

available excess means so much of the excess as does not exceed the acquired exploration expenditure incurred in the assessable year.

35E Starting base expenditure

(1) For the purposes of this Act, a reference to the starting base expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project) is a reference to:

(a) in relation to the starting base financial year for the project:

(i) if the look-back approach is not the valuation approach for the person's interest in the project under Part 2 of Schedule 2 - the person's starting base amount in relation to the interest; or

(ii) if subparagraph (i) does not apply - an amount included in the person's starting base expenditure in relation to the project under clause 18 of Schedule 2; or

(b) in relation to any subsequent financial year - any amount that is taken by subsection (3) or Division 5 to be starting base expenditure incurred by the person in relation to the project in the financial year.

Note: For starting base amounts , see Division 1 of Part 3 of Schedule 2.

(2) For the purposes of this Act, a reference to the starting base expenditure incurred by a person in a financial year in relation to a combined project is a reference to:

(a) any amount that is taken by subsection (3) or Division 5 to be starting base expenditure incurred by the person in relation to the project in the financial year; or

(b) if the project combination certificate in relation to the project came into force in the financial year:

(i) any amount of starting base expenditure; or

(ii) any amount that is taken by subsection (3) or Division 5 to be starting base expenditure;

incurred by the person in relation to the pre-combination projects in relation to the project in the financial year.

(3) For the purposes of subsection (1) or (2), if the sum of:

(a) the class 1 augmented bond rate general expenditure; and

(b) the class 1 augmented bond rate exploration expenditure; and

(c) the class 2 augmented bond rate general expenditure; and

(d) the class 1 GDP factor expenditure; and

(e) the class 2 augmented bond rate exploration expenditure; and

(f) the class 2 GDP factor expenditure; and

(g) the resource tax expenditure; and

(h) the acquired exploration expenditure; and

(i) the starting base expenditure;

incurred by a person in a financial year (the assessable year ) in relation to the petroleum project exceeds the assessable receipts derived by the person in the assessable year in relation to the project, the person is taken to incur, in relation to the project and on the first day of the next financial year, an amount of starting base expenditure worked out in accordance with the formula:

Available excess x Augmented bond rate

where:

augmented bond rate means the long term bond rate in relation to the assessable year plus 1.05.

available excess means so much of the excess as does not exceed the starting base expenditure incurred in the assessable year.

(4) The reference in paragraph (1)(a) to the starting base financial year for a petroleum project is a reference to:

(a) if the look-back approach is not the valuation approach for the person's interest in the project under Part 2 of Schedule 2 - the earliest financial year, after 30 June 2012, in which a production licence relating to the project is in existence; or

(b) if paragraph (a) of this subsection does not apply - the financial year commencing on 1 July 2009.