MINERALS RESOURCE RENT TAX ACT 2012 [ REPEALED]

CHAPTER 4 - SPECIALIST LIABILITY RULES  

PART 4-5 - ACCOUNTING FOR MRRT  

Division 200 - Simplified MRRT method  

Operative provisions  

SECTION 200-15   WORKING OUT AN ENTITY ' S PROFIT FOR SIMPLIFIED MRRT METHOD PURPOSES  

200-15(1)  
To work out an * entity ' s profit under this section for an * MRRT year , work out the entity ' s profit in accordance with * accounting principles .

Note:

If the MRRT year is not a 12-month period, the entity ' s profit is affected by section 190-20 (substituted accounting periods).

200-15(1A)  
For the purposes of subsection (1), assume that, during the whole of the * MRRT year, the entity has a particular mining project interest to the extent (if any) that the entity has the interest immediately before the end of the year.

Example:

If, during the MRRT year, a mining project interest that the entity had at the start of the year was subject to a mining project split with another entity (and they retained their new interests for the rest of the year), the entity ' s profit under subsection (1) is worked out as if the entity ' s split percentage applied for the whole year.

If the other entity ' s profit under subsection (1) is relevant, it is worked out as if the other entity ' s split percentage applied for the whole year.

200-15(2)  
However, disregard an amount that would otherwise form part of the * entity ' s profit under subsection (1) to the extent that it is one or more of the following:


(a) any interest expenses;


(b) any taxation expenses;


(c) any earnings or expenses that do not relate, directly or indirectly, to a * mining revenue event ;


(d) any expenses that give rise to a * royalty credit the entity has for the year;


(e) any expenses that give rise to a * private mining royalty the entity has for the year;


(f) any exceptional earnings or expenses.

Example:

For the 2014-15 MRRT year, MinerCo has earnings of $ 200 million and expenses of $ 150 million, giving a profit of $ 50 million. However, MinerCo has earnings of $ 51 million that do not relate to a mining revenue event and the following expenses:

  • (a) interest expenses of $ 20 million;
  • (b) taxation expenses of $ 20 million;
  • (c) expenses that do not relate to a mining revenue event of $ 10 million;
  • (d) mining royalties of $ 20 million;
  • (e) private mining royalties of $ 10 million.
  • Disregarding these earnings and expenses for the purposes of subsection (2), MinerCo ' s adjusted earnings are $ 149 million ( $ 200 million - $ 51 million) and its adjusted expenses are $ 70 million ( $ 150 million - sum of the expenses in paragraphs (a) to (e)). MinerCo ' s profit under this section for the year is $ 79 million ( $ 149 million - $ 70 million).

    200-15(3)  
    The amount of profit that relates to a mining project interest the * entity has for the year is so much of the entity ' s profit for the year as is reasonably attributable to that interest.




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