Designated infrastructure project entities
Companies and fixed trusts that carry on part or all of a designated infrastructure project (DIP) can, subject to certain conditions:
- uplift their tax losses by the long-term bond rate (LTBR) as defined in section 995-1 of the Income Tax Assessment Act 1997 (see Long-term bond rate)
- use those losses without applying the company continuity of ownership and same business tests or the equivalent trust loss rules.
Before you can uplift losses:
- your project must be designated by the Chief Executive Officer of Infrastructure Australia
- you must notify the Commissioner that you are a DIP entity
Designation as a DIP
The Chief Executive Officer of Infrastructure Australia is responsible for approving requests for designation.
DIP entity notification
To access a tax loss uplift, you must notify the Commissioner that you are a DIP entity. You can do this by completing a notification form, attaching it to a secure email and lodging this through the Tax Agent or Business Portal.
Normally, you must submit the DIP entity notification form before you lodge a tax return seeking to uplift a loss. If you are not required to lodge a tax return then you must submit the form by the time you would have otherwise been required to lodge your tax return.
If your notification of DIP status arrives after you have lodged your tax return, you have 28 days from the date of notification to submit the form.
If there is a gap between when you start incurring costs in relation to applying for DIP status and when you start on the project, you have until 28 days after you start carrying on the project to submit the form.
The Commissioner may allow the notice to be lodged at a later time.
Long-term bond rate
The rate you are required to use will depend on whether you are a 30 June balancer or have a substituted accounting period (the uplift factor needs to reflect the length of your accounting period):
Companies and fixed trusts carrying out part or all of a designated infrastructure project can, under certain conditions, uplift their tax losses by the long-term bond rate. These entities are also exempt from the company continuity of ownership and same business tests and the equivalent tests that apply to claiming trust losses.Last modified: 18 Nov 2014QC 37775