Australian carbon credit units (ACCUs) may be issued to primary producers under the Carbon Credits (Carbon Farming Initiative) Act 2011 for eligible offsets projects. They may also be acquired from a third party such as a carbon credit service provider that holds such units.
If you're an eligible individual primary producer, you may have an entitlement to concessional tax treatment for any:
- eligible ACCUs you start to hold on or after 1 July 2022 as a result of an eligible offsets project associated with your primary production business
- income attributable to eligible ACCUs you receive from a partnership or trust that carries on a primary production business
- eligible ACCUs or eligible income you received from an eligible arrangement with a carbon service provider.
The concessions are available only to eligible individuals, and the conditions you need to meet, depend on if:
- you're carrying on a primary production business as a sole trader, or as a partnership
- you're the beneficiary of a trust that is carrying on a primary production business
- an arrangement with a carbon service provider is involved.
If you're an eligible primary producer, the concessions you may be entitled to are that:
- For the purposes of the Farm Management Deposit (FMD) Scheme and accessing the income tax averaging rules
- the proceeds from the sale of eligible ACCUs will be treated as primary production income
- related deductions will be treated as primary production deductions.
- You won't be assessed on the change in value of eligible ACCUs you started to hold on or after 1 July 2022 each year. You will only be assessed on the proceeds from the sale of eligible ACCUs first held on or after 1 July 2022.
For information on the tax treatment for ACCUs held before 1 July 2022, see Registered emissions units.
For more information including eligibility, see Taxation of Australian carbon credit units for primary producers.
Continue to: Primary production worksheet
Return to: Farm management deposits scheme