MINERALS RESOURCE RENT TAX ACT 2012 [ REPEALED]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:

Royalty credit

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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