INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 418 - Exploration for minerals  

Subdivision 418-D - Creating exploration credits  

SECTION 418-85   Exploration credits must not exceed maximum exploration credit amount  

418-85(1)  
An entity must not create *exploration credits for an income year of a total amount that exceeds the entity ' s *maximum exploration credit amount for the income year.

418-85(2)  
An entity ' s maximum exploration credit amount for an income year (the credit year ) is the smallest of the following amounts:


(a) the entity ' s *greenfields minerals expenditure for the credit year multiplied by the entity ' s *corporate tax rate for the credit year;


(b) the entity ' s *tax loss for the credit year multiplied by the entity ' s corporate tax rate for the credit year;


(c) the sum of:


(i) the entity ' s *exploration credits allocation for the credit year; and

(ii) the entity ' s *unused allocation of exploration credits from the income year immediately preceding the credit year.

418-85(3)  
In working out the entity ' s *greenfields minerals expenditure for the credit year for the purposes of paragraph (2)(a), reduce that greenfields minerals expenditure by the sum of:


(a) all *recoupments that the entity receives in relation to the entity ' s greenfields minerals expenditure for the credit year; and


(b) if:


(i) an amount has been included in the entity ' s assessable income because a *balancing adjustment event occurs for a *depreciating asset; and

(ii) all or part of the amount of the deduction to which the entity is entitled under section 40-25 for the credit year in relation to the decline in value of the asset is included in the entity ' s greenfields minerals expenditure for that year;
so much of the amount of that deduction as was included in that greenfields minerals expenditure.

418-85(4)  
In working out the entity ' s *tax loss for the credit year for the purposes of paragraph (2)(b), reduce that tax loss by the sum of:


(a) all *recoupments that the entity receives in relation to the entity ' s *greenfields minerals expenditure for the credit year; and


(b) any part of the entity ' s tax loss for the credit year that would not be deductible in the income year immediately following the credit year; and


(c) if:


(i) an amount has been included in the entity ' s assessable income because a *balancing adjustment event occurs for a *depreciating asset; and

(ii) all or part of the amount of the deduction to which the entity is entitled under section 40-25 for the credit year in relation to the decline in value of the asset is included in the entity ' s greenfields minerals expenditure for that year;
so much of the amount of that deduction as was included in that greenfields minerals expenditure.

418-85(5)  
For the purposes of paragraph (4)(b), assume that the entity ' s assessable income for the income year immediately following the credit year is sufficient to allow the entity to utilise the whole of that *tax loss in relation to the credit year.

418-85(6)  
A failure to comply with this section does not invalidate the creation of an *exploration credit.


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