Treasury Laws Amendment (Tax Accountability and Fairness) Act 2024 (37 of 2024)

Schedule 5   Petroleum resource rent tax deductions cap

Petroleum Resource Rent Tax Assessment Act 1987

5   After section 35E

Insert:

35F Augmented denied deductible expenditure

(1) For the purposes of this Act, a reference to the augmented denied deductible expenditure incurred by a person in a financial year in relation to a petroleum project is a reference to:

(a) if the petroleum project is not a combined project - any amount that is taken by subsection (2) or Division 5 to be augmented denied deductible expenditure incurred by the person in relation to the project in the financial year; or

(b) if the petroleum project is a combined project:

(i) any amount that is taken by subsection (2) or Division 5 to be augmented denied deductible expenditure incurred by the person in relation to the project in the financial year; or

(ii) if the financial yearis the year in which the project combination certificate in relation to the project came into force - each amount that is taken by subsection (2) or Division 5 to be augmented denied deductible expenditure incurred by the person in relation to the pre-combination projects in the financial year.

Amounts uplifted from previous financial year

(2) If:

(a) a person has a denied deduction amount worked out under subsection 22(3) or (4) in relation to a project and a financial year (the assessable year ); and

(b) the sum of:

(i) the deductible expenditure incurred by the person in relation to the project in the assessable year; and

(ii) the total of the amounts (if any) transferred by the person to the project in relation to the assessable year under section 45A; and

(iii) the total of the amounts (if any) transferred by another person to the person in relation to the project and the assessable year under section 45B;

equals or 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 augmented denied deductible expenditure worked out in accordance with the formula:

where:

available excess means the sum of:

(a) so much of the excess as does not exceed the amount (if any) of augmented denied deductible expenditure incurred by the person in relation to the project in the assessable year; and

(b) the denied deduction amount.

LTBR means the long-term bond rate in relation to the assessable year plus 1.