MINERALS RESOURCE RENT TAX ACT 2012 (REPEALED)

CHAPTER 3 - MRRT ALLOWANCES

PART 3-1 - ROYALTY ALLOWANCES

Division 60 - Royalty allowances

Operative provisions

SECTION 60-25   AMOUNT OF A ROYALTY CREDIT

60-25(1)
To work out the amount of the * royalty credit in the * MRRT year in which the royalty credit arises in relation to a liability of a miner:

(a) work out how much of the liability gives rise to a royalty credit under section 60-20 ; and

(b) divide the result by the * MRRT rate .

Note:

Paragraph (b) grosses-up the royalty payment to an amount that will reduce the ultimate MRRT liability by the amount of the royalty payment.

Example:

A miner pays a State royalty of \$ 22.5 million in an MRRT year. The royalty credit in that year is:

 \$ 22.5 million MRRT rate = \$ 100 million

60-25(2)
In a later * MRRT year , the amount of the * royalty credit is:

where:

previous amount of the royalty credit
is the amount of the * royalty credit for the preceding * MRRT year .

previous application of the royalty credit
is the sum of the amounts of those parts (if any) of the * royalty credit that have been applied in working out, for the preceding * MRRT year , any of the following:

(a) a * royalty allowance for the mining project interest;

(b) one or more * transferred royalty allowances for other mining project interests.

uplift factor
is:

* Long term bond rate for the preceding * MRRT year + 1.07

Example:

A royalty credit of \$ 100 million arises in an MRRT year. \$ 30 million is applied to the royalty allowance in the year the credit arises. In the same year, \$ 30 million is applied to a transferred royalty allowance under Division 65. Assume the long term bond rate for that year is 5.5 % . In the next year, the amount of the royalty credit is: ( \$ 100 million − ( \$ 30 million + \$ 30 million)) × (0.055 + 1.07) = \$ 45 million.

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