Repeal of the deductibility of geothermal energy exploration expenditure

On 24 October 2013, the government announced that it will repeal the Minerals Resource Rent Tax and other related measures. The repeal of the immediate deductibility of geothermal exploration expenditure is one of the other related measures. The repealing legislation received royal assent on 5 September 2014.

In detail:

  • geothermal energy exploration and prospecting expenditure will no longer be immediately deductible
  • if a geothermal exploration right is exchanged for a geothermal energy extraction right relating to the same, or a similar area, then a capital gains tax roll-over applies to defer the liability until the sale of the extraction right.

These changes do not affect deductions or balancing adjustments for geothermal exploration rights or geothermal exploration information that started to be held before the income year in which the amendments commence. The amendments commence on 30 September 2014. For companies that balance on 30 June, this means the amendments apply from 1 July 2014.

Legislation and supporting material

On 5 September 2014, the Minerals Resource Rent Tax Repeal and Other Measures Act 2014External Link received Royal Assent.

Media release

For more information, refer to:

    Last modified: 08 Oct 2014QC 25211