MINERALS RESOURCE RENT TAX ACT 2012 (REPEALED)

CHAPTER 4 - SPECIALIST LIABILITY RULES  

PART 4-2 - PRE-MINING PROJECT INTERESTS  

Division 140 - Pre-mining profits and royalty credits  

Subdivision 140-A - Pre-mining profits  

SECTION 140-10   TREATMENT OF PRE-MINING PROFITS - GENERAL RULE  

140-10(1)    
The * entity may be liable, under this section, to pay MRRT, for the * MRRT year , in relation to the * pre-mining profit .

140-10(2)    
For the purpose only of working out the amount (if any) of that MRRT, the * MRRT law has effect as if:

(a) the * pre-mining project interest were, in the * MRRT year and any earlier MRRT years, a mining project interest that the * entity has; and

(b) the * pre-mining profit were a * mining profit for that mining project interest for the MRRT year; and

(c) subsection 70-20(1) is taken to be satisfied for the purpose of determining whether a * pre-mining loss can be applied in working out a * pre-mining loss allowance for that mining project interest for the MRRT year or any earlier MRRT year; and

(d) no * mining loss or * starting base loss arises, or has arisen for that mining project interest for the MRRT year or any earlier MRRT year; and

(e) that mining project interest were not * integrated with any other mining project interest; and

(f) the * exploration right to which the pre-mining project interest relates were a * production right ; and

(g) in a case where the entity is not a miner - the entity were, in the MRRT year and any earlier MRRT years, a miner.

Note 1:

The following MRRT allowances could be available for the pre-mining project interest:

(a) royalty allowances;

(b) pre-mining loss allowances (but not for the current year, because the pre-mining profit precludes a pre-mining loss for the current MRRT year);

(c) transferred pre-mining loss allowances;

(d) transferred mining loss allowances.

Note 2:

Paragraph (2)(e) precludes the entity from having any transferred royalty allowances, and also precludes the pre-mining project interest from being treated as combined with any mining project interest.

Example:

An entity holds a pre-mining project interest that, in the 2015-16 MRRT year has a pre-mining profit of $ 50 million. It also has a royalty credit for the MRRT year of $ 5 million, based on royalties paid for resources the entity sold. The entity also holds another pre-mining project interest that, in the MRRT year has a pre-mining loss of $ 20 million.

The pre-mining profit is taken to be a mining profit of $ 50 million, but the entity has a royalty allowance of $ 5 million and a transferred pre-mining loss allowance of $ 20 million. Under section 10-5 , the entity ' s MRRT liability is:

22.5 % × ( $ 50 million − $ 25 million) = $ 5.625 million

However, the amount the entity must pay is reduced to zero by the low profit offset under section 45-5 .