Income Tax Assessment Act 1997



Division 420 - Registered emissions units  

Subdivision 420-C - Disposing of registered emissions units etc.  

SECTION 420-35  

420-35   Outgoing international transfers of emissions units  


(a) you stop *holding a *registered emissions unit; and

(b) you do so as a result of the transfer of the unit to:

(i) (Repealed by No 83 of 2014)

(ii) if the unit is a *Kyoto unit - your foreign account (within the meaning of the Australian National Registry of Emissions Units Act 2011 ) or your nominee ' s foreign account (within the meaning of that Act); or

(iii) if the unit is an *Australian carbon credit unit - your foreign account (within the meaning of the Carbon Credits (Carbon Farming Initiative) Act 2011 ) or your nominee ' s foreign account (within the meaning of that Act);

you are treated as if:

(c) just before the transfer, you had sold the unit to someone else for its *market value just before the transfer; and

(d) you had, immediately after the sale, bought it back for the same amount.


An Australian resident company carries on a business of trading in emission units. The company owns 10,000 emission reduction units (a type of Kyoto unit) that are registered in Australia. 5,000 of those units are transferred from the company ' s Australian registry account to the company ' s New Zealand registry account.

The company is treated as having sold each unit to someone else at its market value just before it stopped being a registered emissions unit. As the unit was a registered emissions unit, the market value is included in the company ' s assessable income (section 420-25 ).

The company is also treated as having bought 5,000 emission reduction units for the same amount. As those units are trading stock, the company may be able to deduct that amount under section 8-1 .

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