• Minerals resource rent tax (MRRT)

    Danger

    Administrative treatment

    The Minerals Resource Rent Tax Repeal and Other Measures Act 2014 received royal assent on 5 September 2014. However, Schedule 1 to this Act, which repeals the Minerals Resource Rent Tax (MRRT) law is expected to commence on 30 September 2014. Entities will not accrue further MRRT liabilities from 1 October 2014.

    Entities will need to consider their circumstances to ensure that their MRRT obligations accruing up to and including 30 September 2014 are met. These MRRT obligations include:

    • Lodging MRRT instalment liability notices and paying MRRT instalments for instalment quarters (including those commencing on and after 1 July 2014)
    • Lodging MRRT returns

    Lodging MRRT instalment liability notices

    Entities have to lodge MRRT instalment liability notices for the 2014-2015 MRRT year, including for the period from 1 July 2014 through to 30 September 2014, unless they are exempted from this lodgment obligation.

    Entities covered by legislative instrument MRRT 2014/1 Taxation Administration Act 1953 - Nil rate determination and exemption from lodging Minerals Resource Rent Tax (MRRT) Instalment Liability Notices - Instrument (No. 1) 2014 are exempt from having to lodge MRRT instalment liability notices for the 2014-15 MRRT year.

    Entities should review their circumstances to determine whether they are covered by a 2014-15 MRRT year ‘nil rate determination’ (either on a class basis through the above legislative instrument or an individual basis). If entities are not covered by such a determination but they are unlikely to be liable to pay MRRT then they may apply to the Commissioner for one and for an exemption from having to lodge MRRT instalment liability notices on an individual basis.

    For more information refer to Administrative approach to MRRT nil rate determinations.

    Lodging MRRT returns

    Entities will need to lodge MRRT returns for the 2014-15 MRRT year (ending 30 September 2014) on or before 1 March 2015 unless they are exempted from having to lodge an MRRT return.

    We have exempted entities in the following classes of entities from having to lodge MRRT returns:

    • Low volume non-paying entities (for their 2012-13, 2013-14 and 2014-15 MRRT years)
    • Large volume non-paying entities (for their 2013-14 and 2014-15 MRRT years)

    An entity is a low volume non-paying entity for an MRRT year (and will not have to lodge an MRRT return for that MRRT year) if the entity did not pay an MRRT instalment in respect of any instalment quarter during that MRRT year and was not a major producer (as defined) in that MRRT year. An entity is a major producer for an MRRT year if it is a miner that would have a group production of taxable resources of more than 20 million tonnes for that MRRT year.

    An entity is a large volume non-paying entity for an MRRT year (and will not have to lodge an MRRT return for that year) if:

    • the entity did not pay an MRRT instalment in respect of any instalment quarter during that MRRT year, and
    • the Commissioner has determined in writing that the entity is a large volume non-paying entity for that MRRT year. The Commissioner will make such a determination following an application by the entity if the Commissioner is satisfied that the entity is unlikely to be liable to pay MRRT for that MRRT year. Details of how entities can apply will be provided once the legislative instrument is made.

    For more information refer to:

    End of danger

    The minerals resource rent tax (MRRT) is a tax on certain profits generated from the extraction of coal and iron ore. Entities that have an entitlement to, or explore for, coal or iron ore that is extracted in Australia, may be affected by MRRT.

    MRRT applies to the following taxable resources:

    • iron ore
    • coal
    • anything produced by the in situ consumption of coal or iron ore
    • coal seam gas extracted as a necessary incident of coal mining or from a proposed coal mine.

    MRRT applies from 1 July 2012 to all new and existing coal or iron ore mining ventures in Australia.

    MRRT entities

    Broadly, MRRT affects entities that are entitled to a share in an extracted taxable resource from a mining venture or that have an interest in an exploration permit or retention lease.

    Even if an entity is not liable to pay MRRT, it may still have obligations under MRRT, including lodging forms, making choices and keeping records. Registering for MRRT ensures prompt processing of forms and payments (including refunds) and allows us to provide MRRT entities with timely information.

    Register for MRRT

    All entities should consider registering for MRRT.

    Changing ownership or winding down of interests

    Mining project interests (MPIs) and pre-mining project interests (PMPIs) may be transferred or split. MPIs may also be combined for MRRT purposes. Special rules apply towards the end of the life of an MPI and PMPI.

    MRRT liabilities

    Generally, MRRT is a project-based tax which means that an entity calculates its MRRT liability separately for each MPI and PMPI.

    Starting base considerations

    All entities should consider getting a starting base.

    MRRT concepts

    Definitions of key MRRT concepts.

    Background to MRRT

    Following the government's announcement of new taxation arrangements for the resource sector in July 2010, there was extensive consultation with industry and stakeholders. Legislation came into effect on 1 July 2012.

  • Last modified: 24 Sep 2014QC 33604