PETROLEUM RESOURCE RENT TAX ASSESSMENT ACT 1987

PART I - PRELIMINARY  

SECTION 1   1   SHORT TITLE  


This Act may be cited as the Petroleum Resource Rent Tax Assessment Act 1987.

SECTION 1A   1A   APPLICATION OF THE CRIMINAL CODE  


Chapter 2 of the Criminal Code applies to all offences against this Act.

Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

PART II - INTERPRETATION  

SECTION 2   2   DEFINED TERMS  


In this Act, unless the contrary intention appears:

Aboriginal person
has the meaning given by subsection 4(1) of the Aboriginal and Torres Strait Islander Act 2005.

access authority
means a petroleum access authority within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

accounts
includes:


(a) ledgers; and


(b) journals; and


(c) statements of financial performance; and


(d) profit and loss accounts; and


(e) balance-sheets; and


(f) statements of financial position;

and also includes statements, reports and notes attached to, or intended to be read with, anything covered by any of the above paragraphs.

acquisition
has the meaning given by section 195-1 of the GST Act.

agent
includes:


(a) a person who, for and on behalf of a person out of Australia, has the management or control in Australia of the whole or a part of a business of the second-mentioned person; and


(b) a person declared by the Commissioner, by notice in writing served on the person, to be an agent or the sole agent of a person for the purposes of this Act.

annual transfer
has the meaning given by subsection 45E(4).

applicable commencement date
, in relation to a petroleum project, means:


(a) unless paragraph (b) or (c) applies - 1 July 1986; or


(b) if the project is the Bass Strait project, or if the Bass Strait project is a pre-combination project in relation to the project - 1 July 1990; or


(c) if the project is the North West Shelf project - 1 July 2012.

applicable foreign currency
has the meaning given by section 58C.

apportionment percentage figure
has the meaning given by subsection 2C(2).

approved form
has the meaning given by section 388-50 in Schedule 1 to the Taxation Administration Act 1953.

Note:

Forms previously approved by the Commissioner under this Act continue in effect: see item 230 of Schedule 10 to the Tax Laws Amendment (2004 Measures No. 7) Act 2005.

assessment
means the ascertainment of the amount of a person's taxable profit (or that a person has no taxable profit) in relation to a year of tax and a petroleum project, and of the tax payable on that amount (or that no tax is payable).

Australia
, when used in a geographical sense, has the same meaning as in the Income Tax Assessment Act 1997.

Australian law
has the meaning given by subsection 995-1(1) of the Income Tax Assessment Act 1997.

basic company group
has the meaning given by section 2B.

Bass Strait exploration permit
means the exploration permit known as VIC/P1.

Bass Strait project
means the petroleum project referred to in subsection 19(1A).

block
has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

certifying Minister
(Repealed by No 88 of 2009)

combined project
means a petroleum project to which subsection 19(2) applies.

Commissioner
means the Commissioner of Taxation.

company
means a body corporate that has a share capital.

condensate
means a mixture that includes pentane and hexane, where the pentane and hexane comprise more than 50% by weight of the mixture.

consolidated group
(Repealed by No 43 of 2019)

created
(Repealed by No 43 of 2019)

creditable purpose
has the meaning given by section 195-1 of the GST Act.

current apportionment percentage
has the meaning given by subsection 2C(1).

decreasing adjustment
has the meaning given by section 195-1 of the GST Act.

Deputy Commissioner
means a Deputy Commissioner of Taxation.

designated company group
has the meaning given by section 2BA.

designated frontier area
means that block or those blocks that constitute both:


(a) an area or part of an area:


(i) specified in section 36A; or

(ii) specified in an instrument made under subsection 36B(1); and


(b) an exploration permit area.

designated frontier expenditure
, in relation to a petroleum project and a financial year, means exploration expenditure that is actually incurred:


(a) by a person in that year where the eligible exploration or recovery area in relation to the project is a designated frontier area; and


(b) during the original period of the exploration permit concerned (before the permit is first renewed or ceases to be in force);

other than exploration expenditure that is incurred in evaluating or delineating a petroleum pool (within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006) that has been discovered in a designated frontier area.

eligible production licence
(Repealed by No 18 of 2012)

eligible real expenditure
means exploration expenditure, general project expenditure, resource tax expenditure, starting base expenditure or closing-down expenditure.

employee amenities
means housing, health, educational, recreational, welfare or other similar facilities and services for, or facilities and services involved in the supply of meals to, employees or dependants of employees, not being facilities and services conducted for the purpose of profit-making.

excess closing-down expenditure
has the meaning given by paragraph 46(1)(a).

excluded commodity
means a marketable petroleum commodity that:


(a) has been sold;


(b) after being produced, has been further processed or treated;


(c) has been moved away from the place of its production other than to a storage site adjacent to that place; or


(d) has been moved away from a storage site adjacent to the place of its production.

excluded fee
means an amount of a kind referred to in paragraph 113(1)(c), subsection 115(5), paragraph 118(1)(c), subsection 178(4) or paragraph 181(1)(c) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

exploration permit
means a petroleum exploration permit within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

exploration permit area
means a petroleum exploration permit area within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

external petroleum
, in relation to a petroleum project, means petroleum, or constituents of petroleum, recovered from an area or areas other than the production licence area or production licence areas in relation to the project.

facilities
means land, buildings, plant, equipment and other facilities.

financial year
means any financial year that commenced or commences on or after 1 July 1979.

foreign currency
means a currency other than Australian currency.

future closing-down expenditure
has the meaning given by section 2D.

GDP factor
, in relation to a financial year, means the GDP factor for the financial year worked out in accordance with section 2A.

general interest charge
means the charge worked out under Part IIA of the Taxation Administration Act 1953.

Greater Sunrise project
means a petroleum project for the recovery of petroleum from one or more of the Greater Sunrise unit reservoirs.

Greater Sunrise unit area
has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

Greater Sunrise unit reservoirs
has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

group company
has the meaning given by section 2B.

GST
has the meaning given by section 195-1 of the GST Act.

GST Act
means the A New Tax System (Goods and Services Tax) Act 1999.

head company
, of a designated company group, has the meaning given by section 2BA.

holder of a registered interest
, in relation to a production licence, means a person holding an interest in the production licence, being an interest created by a dealing in relation to which an entry has been made under subsection 494(3) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

increasing adjustment
has the meaning given by section 195-1 of the GST Act.

ineligible project
, in relation to a financial year, means a petroleum project that is a pre-combination project by virtue of the issue of a project combination certificate during the financial year.

infrastructure licence
has the meaning given by section 7 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

input tax credit
has the meaning given by section 195-1 of the GST Act.

instalment of tax
means an instalment of tax payable under Division 2 of Part VIII.

instalment percentage
, in relation to an instalment period in a year of tax, means:


(a) in the case of the first instalment period in the year of tax - 25%;


(b) in the case of the second instalment period in the year of tax - 50%; and


(c) in the case of the third instalment period in the year of tax - 75%.

instalment period
, in relation to an instalment of tax in a year of tax, means the period commencing at the beginning of the year of tax and ending at the end of the month preceding that in which the instalment is due and payable.

instalment transfer
has the meaning given by subsection 45E(5).

instalment transfer charge period
has the meaning given by subsection 98A(4).

instalment transfer excess
has the meaning given by subsection 98A(1).

instalment transfer interest charge
has the meaning given by subsection 98A(4).

internal petroleum
, in relation to a petroleum project, means petroleum, or constituents of petroleum, recovered from the production licence area or production licence areas in relation to the project, where:


(a) the petroleum, or the constituents of petroleum, is, or is to be, recovered or processed:


(i) by a person entitled to derive assessable receipts in relation to the project; and

(ii) for or on behalf of another person who is entitled to derive assessable receipts in relation to the project; or


(b) the petroleum, or the constituents of petroleum, is, or is to be, sold:


(i) by a person entitled to derive assessable receipts in relation to the project; and

(ii) to another person who is entitled to derive assessable receipts in relation to the project.

lease derived production licence
means a production licence that is derived from a retention lease.

liable person
has the meaning given by subsection 98A(1).

licensed property
, in relation to a petroleum project, has the meaning given by paragraph 2D(1)(b).

liquefied petroleum gas
means a mixture that includes propane and butane, where the propane and butane comprise more than 50% by weight of the mixture.

long-term bond rate
means:


(a) in relation to the financial year commencing on 1 July 1979 - 0.1066; and


(b) in relation to the financial year commencing on 1 July 1980 - 0.1258; and


(c) in relation to the financial year commencing on 1 July 1981 - 0.1548; and


(d) in relation to the financial year commencing on 1 July 1982 - 0.1443; and


(e) in relation to the financial year commencing on 1 July 1983 - 0.1272; and


(f) in relation to the financial year commencing on 1 July 1984 - 0.1341; and


(g) in relation to the financial year commencing on 1 July 1985 - 0.1365; and


(h) in relation to any subsequent financial year that is earlier than the financial year commencing on 1 July 2012 - the average, expressed as a decimal fraction, of the assessed secondary market yields in respect of 10-year non-rebate Treasury bonds published by the Reserve Bank during that year or, if no assessed secondary market yield in respect of bonds of that kind was published by the Reserve Bank during the year, the decimal fraction determined by the Treasurer by notice in writing published in the Gazette for the purposes of this definition in relation to the financial year; and


(i) in relation to the financial year commencing on 1 July 2012 and any subsequent financial year - has the same meaning as in subsection 995-1(1) of the Income Tax Assessment Act 1997; and


(j) in relation to a period that is not a financial year - has the same meaning as in subsection 995-1(1) of the Income Tax Assessment Act 1997.

marketable petroleum commodity
has the meaning given by section 2E.

market value
, of a commodity, at a particular time, is its market value reduced by an amount equal to the amount of the input tax credit (if any) to which a person would be entitled if:


(a) the person had acquired the commodity at that time; and


(b) the acquisition had been solely for a creditable purpose.

MEC group
(Repealed by No 43 of 2019)

member
(Repealed by No 43 of 2019)

North West Shelf exploration permits
means the exploration permits known as WA-1-P and WA-28-P.

North West Shelf project
means the petroleum project referred to in subsection 19(1B).

notional tax amount
has the meaning given by section 97.

offence against this Act
includes an offence against:


(a) the Crimes Act 1914; or


(b) the Taxation Administration Act 1953;

relating to this Act.

officer
means a person appointed or engaged under the Public Service Act 1999.

oil shale
means any shale or other rock (other than coal) from which a fluid consisting of or including hydrocarbons may be extracted or produced.

onshore area
(Repealed by No 43 of 2019)

onshore petroleum project
(Repealed by No 43 of 2019)

overall company group
has the meaning given by section 2B.

permit derived production licence
means a production licence that is derived from an exploration permit.

petroleum
means:


(a) petroleum within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006; or


(b) oil shale.

petroleum project
or project means a petroleum project within the meaning of subsection 19(1) or (2), and includes the extended meaning given by subsection 19(2B) or (2C).

pipeline licence
has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

post-30 June 2008 petroleum project
means a petroleum project, where the production licence, or each production licence, in relation to the project came into force after 30 June 2008, and includes the North-West shelf project.

pre-1 July 2008 petroleum project
means a petroleum project other than a post-30 June 2008 petroleum project.

pre-combination project
, in relation to a combined project, means:


(a) any petroleum project that, immediately before the project combination certificate that gave rise to the combined project came into force, was a petroleum project in relation to any one or more of the production licences specified in the certificate; and


(b) any petroleum project that is a pre-combination project in relation to another petroleum project that is a pre-combination project in relation to the combined project under paragraph (a) or this paragraph.

pre-licence area
, in relation to a production licence, means:


(a) if the production licence was derived from an exploration permit - the exploration permit area of the exploration permit; or


(b) if the production licence was derived from a retention lease - either:


(i) the retention lease area of the retention lease; or

(ii) the exploration permit area of the exploration permit to which the retention lease is related.

processing of external petroleum
, in relation to a petroleum project, includes the stabilisation, transportation, storage or recovery of external petroleum in relation to the project.

processing of internal petroleum
, in relation to a petroleum project, includes the stabilisation, transportation, storage or recovery of internal petroleum in relation to the project.

production licence
means:


(a) a petroleum production licence within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006; or


(b) a lawful authority or right (however described) to undertake activities in the Western Greater Sunrise area for the recovery of petroleum from one or more of the Greater Sunrise unit reservoirs.


(c) (Repealed by No 43 of 2019)

production licence area
means a petroleum production licence area within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and, in relation to a Greater Sunrise project, includes the Western Greater Sunrise area.

production licence notice
, in relation to a petroleum project, means a notice issued under subsection 258(7) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 in relation to the project.

project combination certificate
means a certificate under section 20.

provisional head company
(Repealed by No 43 of 2019)

registered holder
has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

re-inject
, in relation to a marketable petroleum commodity produced from petroleum recovered from the eligible exploration or recovery area in relation to a petroleum project, means return the commodity to a natural reservoir in:


(a) where the return takes place before any production licence in relation to the project comes into force - any area from which the recovery of petroleum would, at the time of the return, constitute recovery of petroleum from the eligible exploration or recovery area in relation to the project; and


(b) in any other case - the production licence area or any of the production licence areas in relation to the project.

related charge
means:


(a) shortfall interest charge, or general interest charge, in relation to tax; or


(b) instalment transfer interest charge in relation to an instalment of tax.

Resources Department
means the Department that:


(a) deals with matters arising under section 1 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006; and


(b) is administered by the Resources Minister.

Resources Minister
means the Minister administering section 1 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

retention lease
means a petroleum retention lease within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

retention lease area
means a petroleum retention lease area within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

sales gas
means a substance:


(a) which is in a gaseous state when at the temperature of 15°C and a pressure of one atmosphere; and


(b) which consists of naturally occurring hydrocarbons, or a naturally occurring mixture of hydrocarbons and non-hydrocarbons; and


(c) the principal constituent of which is methane; and


(d) which:


(i) if it is to be used as a feedstock for conversion to another product - has been processed so that it is suitable for that use; or

(ii) in any other case - has been processed so that it is suitable for direct consumption as energy.

Second Commissioner
means a Second Commissioner of Taxation.

services
means water, light, power, access, communications or other services.

shortfall interest charge
means the charge worked out under Division 280 in Schedule 1 to the Taxation Administration Act 1953.

starting base amount
, in relation to a person's interest in a petroleum project, means the amount (if any) assessed as the starting base amount in relation to the person's interest under clause 23 of Schedule 2 as in force before 1 July 2019.

starting base asset
(Repealed by No 43 of 2019)

subsidiary
has the meaning given by section 2B.

subsidiary member
(Repealed by No 43 of 2019)

tax
means tax imposed by any of the following:


(a) the Petroleum Resource Rent Tax (Imposition - General) Act 2012;


(b) the Petroleum Resource Rent Tax (Imposition - Customs) Act 2012;


(c) the Petroleum Resource Rent Tax (Imposition - Excise) Act 2012.

this Act
includes:


(a) the regulations; and


(b) Part IVC of the Taxation Administration Act 1953, insofar as that Part relates to this Act.

Torres Strait Islander
has the meaning given by subsection 4(1) of the Aboriginal and Torres Strait Islander Act 2005.

transferable exploration expenditure
in relation to a person and a financial year, means expenditure that is, according to Schedule 1, transferable by the person in relation to the financial year.

Note 1:

The following provisions of Schedule 1 provide for expenditure to be transferable:

  • paragraph 7(b)
  • paragraph 8(5)(c)
  • paragraph 11(b)
  • paragraph 12(4)(c)
  • subclause 18(1)
  • subclause 18(2)
  • paragraph 18(3)(e).
  • Note 2:

    Special rules apply in relation to the transfer of Greater Sunrise exploration expenditure: see Part 1A of Schedule 1.

    Tribunal
    means the Administrative Appeals Tribunal.

    trustee
    includes:


    (a) a person appointed or constituted trustee by act of parties, by order or declaration of a court, or by operation of law; or


    (b) an executor, administrator or other personal representative of a deceased person; or


    (c) a guardian or committee; or


    (d) a receiver or receiver and manager; or


    (e) a liquidator of a company; or


    (ea) an administrator, within the meaning of the Corporations Act 2001, of a company; or


    (eb) an administrator of a deed of company arrangement executed by a company under Part 5.3A of that Act; or


    (f) a person:


    (i) having or taking upon himself or herself the administration or control of any real or personal property affected by any express or implied trust;

    (ii) acting in any fiduciary capacity; or

    (iii) having the possession, control or management of any real or personal property of a person under any legal or other disability.

    unincorporated association
    does not include a joint venture.

    uplifted frontier expenditure
    has the meaning given by section 36C.

    value
    (Repealed by No 43 of 2019)

    Western Greater Sunrise area
    has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

    year of tax
    , in relation to a person in relation to a petroleum project, means a financial year commencing on or after the applicable commencement date, being:


    (a) except in a case to which paragraph (b) applies - the first financial year in which assessable petroleum receipts are derived by the person in relation to the project or a subsequent financial year; or


    (b) if the project is a combined project and the person has, in a financial year before the financial year in which the project combination certificate in relation to the project comes into force, derived assessable petroleum receipts in relation to any of the pre-combination projects in relation to the combined project - the financial year in which the project combination certificate comes into force or a subsequent financial year.

    SECTION 2AA   2AA   DETERMINATIONS RELATING TO CERTAIN DEFINED TERMS  
    (Repealed by No 43 of 2019)

    SECTION 2AB   2AB   EXCLUSION OF INCIDENTAL RECOVERY OF COAL SEAM GAS  
    (Repealed by No 43 of 2019)

    SECTION 2AC   2AC   EXCLUSION OF INCIDENTAL EXPLORATION ETC. FOR PETROLEUM  
    (Repealed by No 43 of 2019)

    SECTION 2A   GDP FACTOR  

    2A(1)  
    For the purposes of this Act, the GDP factor for a financial year is the number (calculated to 3 decimal places) worked out by dividing the GDP deflator for the financial year by the GDP deflator for the immediately preceding financial year.

    2A(2)  
    For the purposes of subsection (1), the GDP deflator for a financial year is the Implicit Price Deflator for Expenditure on Gross Domestic Product first published by the Australian Statistician in respect of the financial year.

    2A(3)  


    If the Australian Statistician changes the index reference period for the GDP deflator, then, for the purposes of the application of subsection (1) after the change takes place, regard must be had only to the GDP deflator in terms of the new index reference period.

    2A(4)  
    Where the GDP factor worked out under subsection (1) for a financial year would, if it were calculated to 4 decimal places, end with a number greater than 4, the GDP factor worked out under that subsection for that financial year is taken to be the GDP factor calculated to 3 decimal places under that subsection and increased by 0.001.

    SECTION 2B   GROUP COMPANIES, SUBSIDIARIES, BASIC COMPANY GROUPS AND OVERALL COMPANY GROUPS   Group company - period

    2B(1)  
    For the purposes of this Act, a company is a group company in relation to another company and a period if:


    (a) one of the companies was a subsidiary of the other company; or


    (b) each of the companies was a subsidiary of the same company;

    at all times during so much of the period during which both companies were in existence.

    Group company - time

    2B(1A)  
    For the purposes of this Act, a company is a group company in relation to another company at a particular time if, at that time:


    (a) one of the companies was a subsidiary of the other company; or


    (b) each of the companies was a subsidiary of the same company.

    Subsidiary

    2B(2)  
    For the purposes of this Act, a company (in this subsection called the subsidiary company ) is a subsidiary of another company (in this subsection called the holding company ) at a particular time if, at that time:


    (a) all the shares in the subsidiary company are beneficially owned by:


    (i) the holding company; or

    (ii) a company that is, or 2 or more companies each of which is, a subsidiary of the holding company; or

    (iii) the holding company and a company that is, or 2 or more companies each of which is, a subsidiary of the holding company; and


    (b) there is no agreement, arrangement or understanding in force under which any person is able, or would be able after that time, to affect rights of the holding company or of a subsidiary of the holding company in relation to the subsidiary company.

    2B(3)  
    For the purposes of this Act, where a company is a subsidiary of another company (including a company that is such a subsidiary by virtue of another application or other applications of this subsection), every company that is a subsidiary of the first-mentioned company is also a subsidiary of the other company.

    2B(4)  
    For the purposes of subsection (2), a person is taken to be able to affect rights of a company in relation to another company if the person has a right, power or option (whether because of any provision in the constituent document of either of those companies or because of any agreement or instrument or otherwise) to acquire those rights or do an act or thing that would prevent the first-mentioned company from exercising those rights for its own benefit or receiving any benefits occurring because of those rights. Basic company group

    2B(4A)  
    For the purposes of this Act, a basic company group is a group of companies, where each company in the group is a group company in relation to each other company in the group.

    Overall company group

    2B(4B)  
    For the purposes of this Act, an overall company group is a basic company group that is not a subset of any other basic company group.

    When company in existence

    2B(5)  


    For the purposes of this section, a company is taken to be in existence if it has been incorporated and has not been dissolved.

    2B(6)  
    (Repealed by No 78 of 2006)

    2B(7)  
    (Repealed by No 78 of 2006)

    SECTION 2BA   DESIGNATED COMPANY GROUPS  

    2BA(1)  
    This section sets out the method for identifying a designated company group for the purposes of this Act.

    2BA(2)  
    First, identify a particular overall company group.

    2BA(3)  
    Second, identify all of the members of the overall company group that are entitled to derive assessable receipts in relation to a petroleum project (whether or not the same petroleum project). These members constitute a provisional designated company group .

    2BA(4)  
    Third, if the following conditions are satisfied in relation to a company (the key company ):


    (a) the key company is a member of the provisional designated company group;


    (b) the key company is not a subsidiary of any other company in the provisional designated company group;


    (c) each other company in the provisional designated company group is a subsidiary of the key company;

    then:


    (d) the provisional designated company group is a designated company group ; and


    (e) the key company is the head company of that designated company group.

    2BA(5)  
    Fourth, if:


    (a) subsection (4) does not apply; and


    (b) each company in the provisional designated company group is a subsidiary of another company (the key company ) that:


    (i) is a member of the overall company group; and

    (ii) is not a member of the provisional designated company group;

    then:


    (c) both:


    (i) the key company; and

    (ii) the members of the provisional designated company group;

    constitute a designated company group ; and


    (d) the key company is the head company of that designated company group.

    2BA(6)  
    Subsection (5) has effect subject to subsection (7).

    2BA(7)  
    If:


    (a) a designated company group is covered by subsection (5); and


    (b) the head company of the designated company group is a subsidiary of another company (the higher-tier company ); and


    (c) the higher-tier company is a member of the overall company group; and


    (d) the higher-tier company is not a member of the provisional designated company group;

    there is taken not to be a designated company group of which:


    (e) the higher-tier company is the head company; and


    (f) any member of the provisional designated company group is a member.

    SECTION 2C   GREATER SUNRISE APPORTIONMENTS  

    2C(1)  


    For the purposes of this Act, current apportionment percentage means the percentage applying from time to time under the definition of current apportionment percentage in subsection 286(4) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

    2C(2)  
    For the purposes of this Act, apportionment percentage figure , in relation to a year of tax, means:


    (a) if the current apportionment percentage did not change during the year of tax - the numerator of the fraction with a denominator of 100 that represents the current apportionment percentage that applied during that year; or


    (b) if the current apportionment percentage changed during the year of tax - means the amount worked out using the following formula:


    (First % figure x Prior days) + (Second % figure x Subsequent days)
    Days in tax year

    where:

    days in tax year
    means the number of days in the year of tax.

    first % figure
    , in relation to a year of tax in which the current apportionment percentage changed, means the numerator of the fraction with a denominator of 100 that represents the current apportionment percentage applying before the change.

    prior days
    , in relation to a year of tax in which the current apportionment percentage changed, means the number of days in that year before the current apportionment percentage changed.

    second % figure
    , in relation to a year of tax in which the current apportionment percentage changed, means the numerator of the fraction with a denominator of 100 that represents the current apportionment percentage applying after the change.

    subsequent days
    , in relation to a year of tax in which the current apportionment percentage changed, means the number of days in that year from and including the day on which the current apportionment percentage changed.

    SECTION 2D   FUTURE CLOSING-DOWN EXPENDITURE  

    2D(1)  
    A person has future closing-down expenditure in relation to a petroleum project if:


    (a) the project terminates on the cessation of one or more production licences; and


    (b) on that termination, an infrastructure licence comes into force, or continues in force, permitting the use of any part (the licensed property ) of the operation, facilities and other things that comprised the project immediately before the termination; and


    (c) but for the continued use of the licensed property (as permitted by the infrastructure licence) after that termination, the person would have incurred closing-down expenditure in relation to the project, with respect to the licensed property.

    2D(2)  
    the amount of the person's future closing-down expenditure is worked out as follows:


    Future closing down costs
    (1.02 + Bond rate)Years of operation

    where:

    bond rate
    is the long-term bond rate in relation to the financial year during which the project terminates.

    future closing-down costs
    is the payments (not being excluded expenditure), whether of a capital or revenue nature, that the person would expect:


    (a) the person; or


    (b) another person who becomes responsible for carrying on operations involved in closing down the licensed property;

    to be liable to make in carrying on operations involved in closing down the licensed property. It includes any environmental restoration as a consequence of closing down the licensed property.

    years of operation
    is the number of years after the termination of the project over which the licensed property is expected to be used as permitted by the infrastructure licence.

    2D(3)  
    For the purposes of the definition of future closing-down costs in subsection (2), if the person intends to make alterations or additions to the licensed property after the termination of the project, the payments referred to in that definition are to be disregarded to the extent that they relate to the alterations or additions.

    2D(4)  


    In subsection (2):

    year
    means a period of 12 months.

    Example:

    On the termination of a petroleum project and the coming into force of an infrastructure licence, a person has future closing-down costs of $1 million. The licensed property is expected to be used as permitted by the infrastructure licence for 10 years, and the bond rate in relation to the financial year in question is 5%.

    The amount of the person's future closing-down expenditure is:


    $1,000,000 = $508,349
    (1.02 + 0.05)10

    SECTION 2E   MARKETABLE PETROLEUM COMMODITY  

    2E(1)  
    A marketable petroleum commodity is a product listed in subsection (2) that:


    (a) is produced from petroleum for the purpose of:


    (i) sale; or

    (ii) use as a feedstock for conversion to another product (whether a product listed in subsection (2) or not); or

    (iii) direct consumption as energy; and


    (b) is in its final form for that purpose.

    2E(2)  
    The products are as follows:


    (a) stabilised crude oil;


    (b) sales gas;


    (c) condensate;


    (d) liquefied petroleum gas;


    (e) ethane;


    (ea) shale oil;


    (f) any other product specified in regulations made for the purposes of this paragraph.

    2E(3)  
    However, a product cannot be a marketable petroleum commodity if it has been produced wholly or partly from a product that was a marketable petroleum commodity.

    SECTION 3   PETROLEUM POOLS  

    3(1)  
    Where, for the purposes of the Offshore Petroleum and Greenhouse Gas Storage Act 2006, petroleum recovered from a petroleum pool, within the meaning of that Act, is taken by Division 3 of Part 1.2 of that Act to have been recovered from a particular area or from particular areas in particular proportions, the petroleum shall be taken for the purposes of this Act to have been recovered from that area, or from those areas in those proportions, as the case may be.

    3(2)  


    If, for the purposes of the Offshore Petroleum and Greenhouse Gas Storage Act 2006, petroleum recovered from a part of the seabed is taken by subsection 54(1E) of that Act to have been recovered from a particular area or from particular areas in particular proportions, the petroleum is taken for the purposes of this Act to have been recovered from that area, or from those areas in those proportions, as the case may be.

    SECTION 4   RELATIONSHIP BETWEEN LICENCES, PERMITS AND LEASES ETC.  

    4(1)  
    For the purposes of this Act:


    (a) a production licence shall be taken to be related to an exploration permit if:


    (i) because of the grant of the production licence, the exploration permit ceased to be in force in respect of the block or blocks in respect of which the production licence was granted; or

    (ii) because of the grant of the production licence, a retention lease that was related to the exploration permit ceased to be in force in respect of the block or blocks in respect of which the production licence was granted;


    (b) a retention lease shall be taken to be related to an exploration permit if, because of the grant of the retention lease, the exploration permit ceased to be in force in respect of the block or blocks in respect of which the retention lease was granted;


    (c) a production licence shall be taken to be related to a retention lease if, because of the grant of the production licence, the retention lease ceased to be in force in respect of the block or blocks in respect of which the production licence was granted; and


    (d) where an exploration permit, retention lease or production licence (which permit, lease or licence is in this paragraph referred to as the original authority ) is or was renewed, the renewed permit, lease or licence shall be taken to be a continuation of the original authority notwithstanding that the renewal may not have been granted in respect of all of the blocks in respect of which the original authority was granted.

    4(2)  
    For the purposes of this Act:


    (a) a production licence is derived from an exploration permit if the licence is related to the permit because of subparagraph (1)(a)(i); and


    (b) a production licence is derived from a retention lease if the licence is related to the lease.

    SECTION 4A   HOLDING AN INTEREST - PETROLEUM PROJECT  

    Petroleum projects generally

    4A(1)  


    For the purposes of this Act, a person is taken to have held, at a particular time, an interest in, or in relation to, a petroleum project if the person was, at that time, entitled to receive receipts from the sale of petroleum, or of marketable petroleum commodities produced from petroleum, recovered from:


    (a) if the time is a time after the production licence in relation to the project came into force - the production licence area in relation to the project; or


    (b) if the time is a time before the production licence in relation to the project came into force - a pre-licence area in relation to the production licence.

    4A(2)  
    However, subsection (1) does not apply if the project is a combined project, the Bass Strait project or the North West Shelf project. Combined projects

    4A(3)  


    For the purposes of this Act, a person is taken to have held, at a particular time, an interest in, or in relation to, a combined project if the person was, at that time, entitled to receive receipts from the sale of petroleum, or of marketable petroleum commodities produced from petroleum, recovered from:


    (a) if the time is a time after the project combination certificate came into force - the production licence areas in relation to the project; or


    (b) if the time is a time before the project combination certificate came into force:


    (i) any production licence areas in relation to pre-combination projects relating to the combined project; or

    (ii) any pre-licence areas in relation to any of those pre-combination projects.


    (c) (Repealed by No 88 of 2013)

    The Bass Strait project and the North West Shelf project

    4A(4)  


    For the purposes of this Act, a person is taken to have held, at a particular time, an interest in, or in relation to,:


    (a) the Bass Strait project; or


    (b) the North West Shelf project;

    if the person was, at that time, entitled to receive receipts from the sale of petroleum, or of marketable petroleum commodities produced from petroleum, recovered from any of the production licence areas in relation to that project.

    SECTION 4B   4B   HOLDING AN INTEREST - EXPLORATION PERMIT  


    For the purposes of this Act, a person is taken to have held an interest in, or in relation to, an exploration permit at a particular time if the person was, at that time, entitled to receive receipts from the sale of petroleum, or marketable petroleum commodities produced from petroleum, recovered from the exploration permit area.

    SECTION 4C   4C   HOLDING AN INTEREST - RETENTION LEASE  


    For the purposes of this Act, a person is taken to have held an interest in, or in relation to, a retention lease at a particular time if the person was, at that time, entitled to receive receipts from the sale of petroleum, or marketable petroleum commodities produced from petroleum, recovered from:


    (a) if the time is a time after the retention lease was granted - the retention lease area; or


    (b) if the time is a time before the retention lease was granted - the exploration permit area of the exploration permit to which the retention lease is related.

    SECTION 5   PETROLEUM EXPLORATION AND RECOVERY IN RELATION TO CERTAIN AREAS  

    Pre-1 July 2008 petroleum project

    5(1)  
    For the purposes of the application of this Act (including this section) to a pre-1 July 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, a production licence area, an exploration permit area or a retention lease area is a reference to exploration for petroleum in, or recovery of petroleum from, the production licence area, the exploration permit area or the retention lease area while the production licence, exploration permit or retention lease concerned is or was in force.

    5(2)  
    For the purposes of the application of this Act to a pre-1 July 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, the eligible exploration or recovery area in relation to a petroleum project is a reference to exploration for petroleum in, or recovery of petroleum from:


    (a) where the production licence or any production licence in relation to the project is a permit derived production licence - the exploration permit area in relation to the exploration permit to which the production licence is related (being exploration or recovery occurring either before or after the production licence came into force but not after marketable petroleum commodities cease, otherwise than temporarily, to be produced in relation to the project);


    (b) where the production licence or any production licence in relation to the project is a lease derived production licence - the retention lease area in relation to the retention lease to which the production licence is related (being exploration or recovery occurring either before or after the production licence came into force but not after marketable petroleum commodities cease, otherwise than temporarily, to be produced in relation to the project); and


    (c) the production licence area of the production licence, or the production licence areas of the production licences, in respect of the project.

    5(3)  
    For the purposes of subsections (1) and (2), where, at a time when no permit derived production licence in relation to an exploration permit is in force, a retention lease that is related to the exploration permit comes into force, any exploration for, or recovery of, petroleum that occurred while the exploration permit was in force in the block or blocks in respect of which the retention lease was granted and during the period:


    (a) where paragraph (b) does not apply - before the retention lease came into force; or


    (b) where, before the retention lease came into force, a permit derived production licence, or permit derived production licences, in relation to the exploration permit were in force - after that production licence or all of those production licences, as the case may be, ceased to be in force and before the retention lease came into force;

    shall be taken to have occurred in the retention lease area and not in the exploration permit area notwithstanding that the retention lease was not in force at that time.

    5(4)  
    For the purposes of subsection (2), where, but for this subsection, the same exploration for petroleum or recovery of petroleum would be exploration for petroleum in, or recovery of petroleum from, the exploration permit area or the retention lease area in relation to 2 or more production licences, the exploration or recovery shall be taken to relate only to the production licence that first came into force. Post-30 June 2008 petroleum project

    5(5)  
    For the purposes of the application of this Act (including this section) to a post-30 June 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, a production licence area, an exploration permit area or a retention lease area is a reference to exploration for petroleum in, or recovery of petroleum from, the production licence area, the exploration permit area or the retention lease area while the production licence, exploration permit or retention lease concerned is or was in force.

    5(6)  
    For the purposes of the application of this Act to a post-30 June 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, the eligible exploration or recovery area in relation to a petroleum project is a reference to:


    (a) if the production licence, or any production licence, in relation to the project is a production licence (in this paragraph called the current production licence ) derived from an exploration permit (in this paragraph called the prior exploration permit ) - exploration for petroleum in, or recovery of petroleum from, the exploration permit area of the prior exploration permit, where the exploration or recovery occurred:


    (i) before the current production licence came into force; and

    (ii) if, before the current production licence came into force, there came into force one or more retention leases, or one or more other production licences, derived from the prior exploration permit - after whichever of those retention leases or other production licences last came into force before the current production licence came into force; and


    (b) if the production licence, or any production licence, in relation to the project is a production licence (in this paragraph called the current production licence ) derived from a retention lease (in this paragraph called the prior retention lease ) - exploration for petroleum in, or recovery of petroleum from, the retention lease area of the prior retention lease, where the exploration or recovery occurred before the current production licence came into force; and


    (c) if:


    (i) the production licence, or any production licence, in relation to the project is a production licence (in this paragraph called the current production licence ) derived from a retention lease (in this paragraph called the prior retention lease ); and

    (ii) the prior retention lease was derived from an exploration permit (in this paragraph called the prior exploration permit );
    exploration for petroleum in, or recovery of petroleum from, the exploration permit area of the prior exploration permit, where the exploration or recovery occurred:

    (iii) before the prior retention lease came into force; and

    (iv) if, before the prior retention lease came into force, there came into force one or more other production licences, or one or more other retention leases, derived from the prior exploration permit - after whichever of those other retention leases or other production licences last came into force before the prior retention lease came into force; and


    (d) exploration for petroleum in, or recovery of petroleum from, the production licence area of the production licence, or the production licence areas of the production licences, in respect of the project.

    5(7)  
    If:


    (a) paragraph (6)(c) applies to a post-30 June 2008 petroleum project; and


    (b) the prior retention lease mentioned in that paragraph is one of a set of 2 or more retention leases that:


    (i) came into force at the same time; and

    (ii) were derived from the prior exploration permit mentioned in that paragraph; and


    (c) the production licence, or the production licences, in relation to one or more other post-30 June 2008 petroleum projects were derived from one or more of the retention leases included in the set mentioned in paragraph (b) of this subsection; and


    (d) exploration expenditure incurred in relation to the petroleum project mentioned in paragraph (a) of this subsection is attributable to exploration for petroleum in, or recovery of petroleum from, the exploration permit area of the prior exploration permit;

    then, for the purposes of the application of this Act to the petroleum project mentioned in paragraph (a) of this subsection, the amount of the exploration expenditure mentioned in paragraph (d) of this subsection is taken to be the amount worked out using the following formula:

    formula

    where:

    number of retention leases relating to the petroleum project mentioned in paragraph (a) of this subsection
    means the number of retention leases:


    (a) from which the production licence, or the production licences, in relation to the petroleum project mentioned in paragraph (a) of this subsection were derived; and


    (b) that are included in the set mentioned in paragraph (b) of this subsection.

    total number of retention lease
    means the number of retention leases that are included in the set mentioned in paragraph (b) of this subsection.

    unadjusted amount of exploration expenditure
    means the amount that, apart from this subsection, is the amount of the exploration expenditure mentioned in paragraph (d) of this subsection.

    SECTION 6   6   TERMINATION OF USE OF PROPERTY IN RELATION TO A PETROLEUM PROJECT  


    For the purposes of this Act:


    (a) a termination of the use of all property in relation to a petroleum project shall be taken to occur where the production licence or all of the production licences in relation to the project cease to be in force; and


    (b) no termination of the use of property in relation to a petroleum project shall be taken to occur by reason of the specifying of the production licence or production licences in relation to the project in a project combination certificate.

    SECTION 7   7   PROPERTY INSTALLED READY FOR USE  


    Where property is installed ready for use for a purpose and held in reserve, the property shall, for the purposes of this Act, be taken to be being used for that purpose.

    SECTION 8   8   CONSIDERATION NOT IN CASH  


    For the purposes of this Act, where, upon any transaction, any consideration is liable to be given by way of the provision of property (other than money), the money value of that consideration shall be deemed to have been liable to be given.

    SECTION 9   9   AMOUNTS CREDITED, REINVESTED ETC TO BE TAKEN TO BE RECEIVABLE  


    An amount shall be taken to have been receivable by a person although it is not actually to be paid over to the person but is to be reinvested, accumulated, capitalised, carried to any reserve, sinking fund or insurance fund however designated, or otherwise dealt with on behalf of the person or as the person directs.

    SECTION 10   TRANSLATION OF AMOUNTS INTO AUSTRALIAN CURRENCY  

    10(1)  
    For the purposes of this Act, an amount in a foreign currency is to be translated into Australian currency. Examples of an amount

    10(2)  
    The following are examples of an amount:


    (a) an amount of an expense;


    (b) an amount of an obligation;


    (c) an amount of a liability;


    (d) an amount of a receipt;


    (e) an amount of a payment;


    (f) an amount of consideration;


    (g) a value. Translation rule - assessable receipt

    10(3)  
    If:


    (a) a person derives an assessable receipt in relation to a petroleum project; and


    (b) the receipt is in a foreign currency;

    the receipt is to be translated into Australian currency at the exchange rate applicable at the time when the receipt is derived.

    Translation rule - eligible real expenditure

    10(4)  
    If:


    (a) a person incurs eligible real expenditure in relation to a petroleum project; and


    (b) the expenditure is in a foreign currency;

    the expenditure is to be translated into Australian currency at the exchange rate applicable at the time when the expenditure is incurred.

    Translation rule - transfer of entire entitlement to assessable receipts

    10(5)  
    If:


    (a) section 48 applies in relation to a transaction; and


    (b) a person is a purchaser (within the meaning of section 48) in relation to the transaction; and


    (c) the person is taken, under section 48, to have derived or incurred an amount; and


    (d) the vendor (within the meaning of section 48) in relation to the transaction has made an election under section 58B (functional currency); and


    (e) the election is in effect for the year of tax in which the transfer time (within the meaning of section 48) occurred; and


    (f) the amount is in the vendor's applicable functional currency;

    the amount is to be translated from the applicable functional currency into Australian currency at the exchange rate applicable at the transfer time (within the meaning of section 48).

    Translation rule - transfer of part of entitlement to assessable receipts

    10(6)  
    If:


    (a) section 48A applies in relation to a transaction; and


    (b) a person is a purchaser (within the meaning of section 48A) in relation to the transaction; and


    (c) the person is taken, under section 48A, to have derived or incurred an amount; and


    (d) the vendor (within the meaning of section 48A) in relation to the transaction has made an election under section 58B (functional currency); and


    (e) the election is in effect for the year of tax in which the transfer time (within the meaning of section 48A) occurred; and


    (f) the amount is in the vendor's applicable functional currency;

    the amount is to be translated from the applicable functional currency into Australian currency at the exchange rate applicable at the transfer time (within the meaning of section 48A).

    Operation of functional currency provisions unaffected

    10(7)  
    This section does not affect the operation of Division 7 of Part V (functional currency).

    SECTION 11   RESIDENCE  

    11(1)  
    For the purposes of this Act, a person shall be taken to have been a non-resident at a particular time if the person was not a resident of Australia at that time.

    11(2)  
    For the purposes of this Act, a person shall be taken to have been a resident of Australia at a particular time if:


    (a) in the case of a natural person:


    (i) the person resided in Australia at that time; or

    (ii) except in a case where the Commissioner is satisfied that that person's permanent place of residence at that time was outside Australia-the person was domiciled in Australia at that time;


    (b) in the case of a body corporate:


    (i) the body was incorporated in Australia at that time; or

    (ii) at that time the body corporate carried on business in Australia and:

    (A) had its central management and control in Australia; or

    (B) had its voting power controlled by shareholders who were residents of Australia; or


    (c) in the case of a partnership or an unincorporated association - any member of the partnership or association was a resident of Australia at that time by virtue of paragraph (a) or (b).

    SECTION 12   PARTNERSHIPS  

    12(1)  
    Subject to this section, this Act applies to a partnership as if the partnership were a person.

    12(2)  
    Where, but for this subsection, an obligation would be imposed on a partnership by virtue of the operation of subsection (1), the obligation is imposed on each partner, but may be discharged by any of the partners.

    12(3)  
    Where, by virtue of the operation of subsection (1), an amount is payable under this Act by a partnership, the partners are jointly and severally liable to pay that amount.

    12(4)  
    Where, by virtue of the operation of subsection (1), an offence against this Act is deemed to have been committed by a partnership, that offence shall be deemed to have been committed by each of the partners.

    12(5)  
    In a prosecution of a person for an offence by virtue of this section, it is a defence if the person proves that the person:


    (a) did not aid, abet, counsel or procure the act or omission by virtue of which the offence is deemed to have been committed; and


    (b) was not in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the act or omission by virtue of which the offence is deemed to have been committed.

    12(6)  
    A reference in this section to this Act includes a reference to Part III of the Taxation Administration Act 1953 to the extent to which that Part of that Act relates to this Act.

    SECTION 13   UNINCORPORATED ASSOCIATIONS  

    13(1)  
    Subject to this section, this Act applies to an unincorporated association as if the association were a person.

    13(2)  
    Where, but for this subsection, an obligation would be imposed on an unincorporated association by virtue of the operation of subsection (1), the obligation is imposed on each member of the committee of management of the association, but may be discharged by any of those members.

    13(3)  
    Where, by virtue of the operation of subsection (1), an offence against this Act is deemed to have been committed by an unincorporated association, that offence shall be deemed to have been committed by each member of the committee of management of the association.

    13(4)  
    In a prosecution of a person for an offence by virtue of this section, it is a defence if the person proves that the person:


    (a) did not aid, abet, counsel or procure the act or omission by virtue of which the offence is deemed to have been committed; and


    (b) was not in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the act or omission by virtue of which the offence is deemed to have been committed.

    13(5)  
    A reference in this section to this Act includes a reference to Part III of the Taxation Administration Act 1953 to the extent to which that Part of that Act relates to this Act.

    SECTION 14   APPLICATION OF ACT  

    14(1)  
    This Act extends to every external Territory and, except so far as the contrary intention appears, to acts, omissions, matters and things outside Australia, whether or not in a foreign country.

    14(2)  
    Except where otherwise expressly provided, this Act extends to matters and things whether occurring before or after the commencement of this Act.

    14(3)  
    In subsection (1), a reference to this Act includes a reference to the Taxation Administration Act 1953 to the extent to which that Act relates to this Act.

    PART III - ADMINISTRATION  

    SECTION 15   15   GENERAL ADMINISTRATION OF ACT  


    The Commissioner has the general administration of this Act.
    Note:

    An effect of this provision is that people who acquire information under this Act are subject to the confidentiality obligations and exceptions in Division 355 in Schedule 1 to the Taxation Administration Act 1953.

    SECTION 16   ANNUAL REPORT  

    16(1)  
    The Commissioner shall, as soon as practicable after 30 June in each year, prepare and furnish to the Minister a report on the working of this Act, including any breaches or evasions of this Act of which the Commissioner has notice.

    16(2)  
    The Minister shall cause a copy of a report furnished under subsection (1) to be laid before each House of the Parliament within 15 sitting days of that House after the day on which the Minister receives the report.

    16(3)  
    For the purposes of section 34C of the Acts Interpretation Act 1901, a report that is required by subsection (1) to be furnished as soon as practicable after 30 June in a year shall be taken to be a periodic report relating to the working of this Act during the year ending on that 30 June.

    SECTION 17   17   SECRECY  
    (Repealed by No 145 of 2010)

    SECTION 18   18   APPLICATION OF PART IN RELATION TO SECTION 20  
    (Repealed by No 145 of 2010)

    PART IV - PETROLEUM PROJECTS  

    SECTION 19   PETROLEUM PROJECT  

    19(1)  


    Subject to subsection (1A) and (1B), for the purposes of this Act, where a production licence is in force and is not specified in a project combination certificate that is in force, there shall be taken to be a petroleum project in relation to the production licence.

    19(1A)  
    For the purposes of this Act, there is taken to be a single petroleum project in relation to all production licences that are related to the Bass Strait exploration permit and that are in force from time to time, unless those licences are specified in a project combination certificate that is in force.

    19(1B)  
    For the purposes of this Act, there is taken to be a single petroleum project in relation to all production licences that are related to the North West Shelf exploration permits and that are in force from time to time.

    19(2)  


    For the purposes of this Act, where 2 or more production licences are specified in a project combination certificate that is in force, there shall be taken to be a petroleum project in relation to such of the production licences as are in force.

    19(2A)  
    If:


    (a) the production licences that are related to the Bass Strait exploration permit are specified in a project combination certificate; and


    (b) another production licence that is related to the Bass Strait exploration permit comes into force at a time when the project combination certificate is in force;

    the certificate has effect after that time as if the production licence referred to in paragraph (b) were specified in the certificate.

    19(2B)  
    For the purposes of this Act, there shall be taken to be included, as part of any petroleum project within the meaning of subsection (1) or (2), the carrying on of any processing of external petroleum wholly or partly using the operations, facilities and other things comprising the project:


    (a) in the case of a production licence referred to in subsection (1) - while that licence is in force; or


    (b) in the case of 2 or more production licences referred to in subsection (2) - while any of those licences are in force.

    Note:

    Under subsection (4), the operations, facilities and other things comprising the project are limited to those used in relation to petroleum recovered from the one or more production licence areas in relation to the project.

    19(2C)  
    For the purposes of this Act, there is taken to be included, as part of any petroleum project within the meaning of subsection (1) or (2), the carrying on of any processing of internal petroleum wholly or partly using the operations, facilities and other things comprising the project:


    (a) in the case of a production licence referred to in subsection (1) - while that licence is in force; or


    (b) in the case of 2 or more production licences referred to in subsection (2) - while any of those licences are in force.

    19(3)  


    For the purposes of this Act, where any one or more, but not all, of the production licences specified in a project combination certificate that is in force ceases to be in force, the combined project shall be taken to continue to exist in relation to the production licence or production licences that remain in force.

    19(4)  
    For the purposes of this Act, a reference to the operations, facilities and other things comprising a petroleum project is a reference to:


    (a) operations and facilities for the recovery of petroleum from the production licence area or production licence areas in relation to the project; and


    (b) such of the following as are carried on or provided:


    (i) operations and facilities involved in moving petroleum so recovered between any storage or processing facilities prior to the production of any marketable petroleum commodity from the petroleum;

    (ii) operations and facilities involved in the storage, processing or treatment of petroleum so recovered to produce any marketable petroleum commodity from the petroleum;

    (iii) operations and facilities involved in the moving or storage of any such marketable petroleum commodity before it becomes an excluded commodity;

    (iv) services, or facilities for the provision of services, in connection with the operations, facilities, amenities and services referred to in this section;

    (v) employee amenities in connection with the operations, facilities and services referred to in this section;

    (vi) operations and facilities, carried on or provided, for an environmental purpose, in relation to the carrying on or provision of the operations, facilities and services referred to in this section.

    SECTION 20   COMBINING OF PETROLEUM PROJECTS  

    20(1)  


    Subject to this section, where the Resources Minister, in relation to aproduction licence in relation to a petroleum project, having regard to:


    (a) the respective operations, facilities and other things that comprise, have comprised or will comprise that project and any other petroleum project or projects existing at the time at which the production licence came into force; and


    (b) the persons by whom or on whose behalf the operations, facilities and other things referred to in paragraph (a) are being, have been or are proposed to be carried on or provided; and


    (c) (Repealed by No 43 of 2019)


    (d) the geological, geophysical and geochemical and other features of the production licence areas in relation to the projects;

    considers that the projects are sufficiently related to be treated for the purposes of this Act as a single petroleum project, the Minister must issue a certificate under this subsection specifying the production licence or production licences in relation to each of the projects.

    20(1A)  


    Despite subsection (1), the Minister cannot specify, under that subsection, a production licence relating to the North West Shelf project.

    20(2)  
    (Repealed by No 43 of 2019)

    20(3)  
    For the purposes of paragraph (1)(a):


    (a) a reference to operations, facilities and other things that have comprised a petroleum project includes, in the case of a combined project, a reference to operations, facilities and other things that have comprised the pre-combination projects in relation to the project; and


    (b) a reference to operations, facilities and other things that will comprise a petroleum project is a reference to operations, facilities and other things that are proposed, by the registered holders of, and the holders of registered interests in, the production licence or licences in relation to the project, to comprise the project.

    20(4)  


    The Minister may only issue a certificate under subsection (1) in respect of petroleum projects if:


    (a) a person who is entitled to receive at least half of the receipts from the sale of petroleum or marketable petroleum commoditiesproduced in relation to each of the projects applies, in writing, to the Minister for the certificate to be issued; or


    (b) 2 or more persons who together are entitled to receive at least half of those receipts apply, in writing, to the Minister for the certificate to be issued.

    20(4A)  


    An application under subsection (4) may only be made within:


    (a) the period of 90 days beginning on the day the most recent production licence in relation to any of the petroleum projects came into force; or


    (b) if the Minister allows a longer period - that longer period.

    20(4B)  


    If the Minister does not make a decision on an application under subsection (4) before the later of the following times:


    (a) the end of the period of 90 days after the application is made;


    (b) if the Minister extends that period under subsection (4C) - the end of the extended period;

    the Minister is taken, for the purposes of subsection (12), to have refused the application at that time.

    20(4C)  


    The Minister may, by written notice to the applicant or applicants, extend the period mentioned in subsection (4B) if the Minister is satisfied that it is necessary to do so to adequately consider the application.

    20(5)  
    A certificate under subsection (1) shall not be repealed, rescinded, revoked, amended or varied otherwise than:


    (a) under subsection (8);


    (b) pursuant to a decision of the Tribunal or an order of a court; or


    (c) to correct an error in the certificate.

    20(6)  


    A certificate under subsection (1) shall come into force on the issue of the certificate and continue in force until the issue of a subsequent certificate under that subsection specifying production licences that include such of the production licences specified in the first-mentioned certificate as are in force at the time when the subsequent certificate is issued.

    20(7)  


    Where, in deciding whether or not to issue a certificate under subsection (1) specifying 2 or more production licences, the Resources Minister has reasonable grounds to believe that an operation, facility or other thing is being, has been or is proposed to be carried on or provided, or is being, has been or is proposed to be carried on or provided in a particular manner or by particular persons, for the sole or dominant purpose of obtaining the issue of the certificate, the Minister must disregard the carrying on or provision of the operation, facility or thing.

    20(8)  


    Where, after the issue of a certificate under subsection (1), it appears to the Resources Minister that, having regard to information that was not available to the Minister at the time of issue of the certificate, the certificate would not, by reason of the application of subsection (7), have been issued if the Minister had been aware of the information at the time of issue of the certificate, the Minister must cancel the certificate and upon the cancellation the certificate shall be deemed never to have been issued.

    20(9)  


    The Minister must:


    (a) within 30 days after the issue of a certificate under subsection (1) or the cancellation under subsection (8) of such a certificate, arrange for notice in writing of the issue or cancellation:


    (i) to be sent to the holder or holders of the production licences concerned and to the Commissioner; and

    (ii) to be published in the Gazette; and


    (b) within 30 days after making a decision to refuse an application for the issue of a certificate under subsection (1), arrange for notice in writing of the decision to be sent to the person or persons making the application.

    20(10)  


    A notice under subsection (9) shall include a statement to the effect that, subject to the Administrative Appeals Tribunal Act 1975, application may be made to the Tribunal for review of the decision to issue or cancel the certificate, or to refuse the application, as the case may be, by or on behalf of the person or persons whose interests are affected by the decision.

    20(11)  
    Any failure to comply with the requirement of subsection (10) in relation to a decision does not affect the validity of the decision.

    20(12)  
    Application may be made to the Tribunal for a review of:


    (a) a decision of the Resources Minister to issue a certificate under subsection (1); or


    (b) a decision of the Minister refusing an application to issue such a certificate; or


    (c) a decision of the Minister under subsection (8) to cancel such a certificate.

    PART V - LIABILITY TO TAXATION  

    Division 1 - Liability to tax on taxable profit  

    SECTION 21   21   LIABILITY TO PAY TAX  


    Subject to this Act, tax imposed in respect of the taxable profit of a person of a year of tax in relation to a petroleum project is payable by the person.

    SECTION 22   TAXABLE PROFIT  

    22(1)  
    Where, in relation to a petroleum project and a year of tax, the assessable receipts derived by a person exceed the sum of:


    (a) the deductible expenditure incurred by the person; and


    (b) the total of the amounts (if any) transferred by the person to the project in relation to the year of tax under section 45A; and


    (c) the total of the amounts (if any) transferred by another person to the person in relation to the project and the year of tax under section 45B;

    the person is taken for the purposes of this Act to have a taxable profit in relation to the project and the year of tax of an amount equal to the excess.

    Note:

    because of subsection 45D(2), some transfers of expenditure are taken to be transfers of amounts compounded in accordance with Part 7 of Schedule 1.

    Allowing for Greater Sunrise apportionments

    22(2)  


    However, if the petroleum project is a Greater Sunrise project, the person is taken for the purposes of this Act to have a taxable profit in relation to the project and the year of tax of an amount worked out using the following formula:


    Initial taxable profit × Apportionment percentage figure
    100

    where:

    apportionment percentage figure
    has the meaning given by subsection 2C(2).

    initial taxable profit
    means the amount of taxable profit worked out under subsection (1) ignoring this subsection.

    Division 2 - Assessable receipts  

    SECTION 22B   EFFECT OF GST ETC. ON ASSESSABLE RECEIPTS  

    22B(1)  
    For the purposes of this Division, a reference to consideration receivable, to value receivable or to an amount receivable does not include an amount equal to:


    (a) any GST payable on the supply for which the consideration, value or amount was receivable; or


    (b) any increasing adjustments that relate to that supply.

    22B(2)  
    For the purposes of this Division, a reference to the sale price of property does not include an amount equal to:


    (a) any GST payable on the sale; or


    (b) any increasing adjustments that relate to that sale.

    22B(3)  
    For the purposes of this Division, a reference to expenses payable in relation to a sale does not include an amount equal to:


    (a) any input tax credit to which you are entitled; or


    (b) any decreasing adjustment that you have;

    in relation to those expenses.

    SECTION 23   ASSESSABLE RECEIPTS  

    23(1)  


    For the purposes of this Act, but subject to subsections (2) and (3), a reference to the assessable receipts derived by a person in a financial year in relation to a petroleum project (not being an ineligible project in relation to the financial year) is a reference to the total receipts of the following kinds, whether of a capital or revenue nature, derived by the person in the financial year in relation to the project:


    (a) assessable petroleum receipts;


    (aa) assessable tolling receipts;


    (b) assessable exploration recovery receipts;


    (c) assessable property receipts;


    (d) assessable miscellaneous compensation receipts;


    (e) assessable employee amenities receipts;


    (f) assessable incidental production receipts.

    23(2)  


    For the purposes of this Act, the assessable receipts derived by a person in a financial year in relation to a combined project (not being an ineligible project in relation to the financial year) shall include any amounts of a kind referred to in paragraphs (1)(a) to (f) (inclusive) derived by the person during the financial year in relation to the pre-combination projects in relation to the combined project.

    23(3)  


    For the purposes of this Act, assessable receipts, in relation to a Greater Sunrise project, are to be calculated as if each amount of the petroleum recovered from a Greater Sunrise unit reservoir became the property of the person who recovered that amount as soon as it was recovered.

    23(4)  


    Subsection (3) has effect despite subsection 286(2) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

    SECTION 24   ASSESSABLE PETROLEUM RECEIPTS  

    24(1)  
    For the purposes of this Act, a reference to assessable petroleum receipts derived by a person in relation to a petroleum project is a reference to:


    (a) where any petroleum from the project is or was sold, whether processed or unprocessed, before any marketable petroleum commodity is or was produced from it - the consideration receivable, less any expenses payable, by the person in relation to the sale; and


    (b) where any marketable petroleum commodity (other than sales gas to which paragraph (d) applies) produced from petroleum from the project becomes or became an excluded commodity by virtue of being sold - the consideration receivable, less any expenses payable, by the person in relation to the sale; and


    (c) where any marketable petroleum commodity (other than sales gas to which paragraph (e) applies) produced from petroleum from the project becomes or became an excluded commodity otherwise than by virtue of being:


    (i) sold; or

    (ii) treated or processed, or moved, for re-injection or destruction or for use in carrying on or providing operations, facilities or other things of a kind referred to in section 37, 38 or 39 in relation to the petroleum project;
    so much of the market value of the commodity immediately before it becomes or became an excluded commodity, or, where there is insufficient evidence of that market value, of such amount as, in the opinion of the Commissioner, is fair and reasonable, as is taken by section 26 to be derived by the person; and


    (d) where:


    (i) any sales gas produced from petroleum from the project becomes or became an excluded commodity by virtue of being sold; and

    (ii) (Repealed by No 18 of 2012)

    (iii) the regulations apply to the sales gas;
    the amount worked out in accordance with the regulations; and


    (e) where the regulations apply to any sales gas produced from petroleum from the project, and that sales gas becomes or became an excluded commodity otherwise than by virtue of being:


    (i) sold; or

    (ii) treated or processed, or moved, for re-injection or destruction or for use in carrying on or providing operations, facilities or other things of a kind referred to in section 37, 38 or 39 in relation to the petroleum project;
    the amount worked out in accordance with the regulations.


    (f) (Repealed by No 43 of 2019)

    24(2)  


    In this section:

    non-arm's length transaction
    (Repealed by No 43 of 2019)

    petroleum from the project
    means any petroleum or a constituent of petroleum:


    (a) that is recovered from the production licence area or areas in relation to the petroleum project in question; or


    (b) that is external petroleum in relation to the project.

    SECTION 24A   24A   ASSESSABLE TOLLING RECEIPTS  
    For the purposes of this Act, a reference to assessable tolling receipts derived by a person in relation to a petroleum project is a reference to the consideration receivable by the person in relation to the processing of external petroleum, or internal petroleum, in relation to the project.

    SECTION 25   25   ASSESSABLE EXPLORATION RECOVERY RECEIPTS  
    For the purposes of this Act, a reference to assessable exploration recovery receipts derived by a person in relation to a petroleum project is a reference to:


    (a) where any petroleum, or a constituent of petroleum, recovered from the eligible exploration or recovery area (other than any production licence area) in relation to the project is or was sold, whether processed or unprocessed, before any marketable petroleum commodity is or was produced from it - the consideration receivable, less any expenses payable, by the person in relation to the sale;


    (b) where any marketable petroleum commodity produced from petroleum recovered from the area to which paragraph (a) applies becomes or became an excluded commodity by virtue of being sold - the consideration receivable, less any expenses payable, by the person in relation to the sale; and


    (c) where any marketable petroleum commodity produced from petroleum recovered from the area to which paragraph (a) applies becomes or became an excluded commodity otherwise than by virtue of being:


    (i) sold; or

    (ii) treated or processed, or moved, for re-injection or destruction or for use in carrying on or providing operations, facilities or other things of a kind referred to in section 37, 38 or 39 in relation to the petroleum project;
    so much of the market value of the commodity immediately before it becomes or became an excluded commodity, or, where there is insufficient evidence of that market value, of such amount as, in the opinion of the Commissioner, is fair and reasonable, as is taken by section 26 to be derived by the person.

    SECTION 26   26   AMOUNTS NOTIONALLY DERIVED WHERE NO SALE OF PETROLEUM ETC.  


    Where paragraph 24(1)(c), 24(1)(e) or 25(c) applies in relation to any marketable petroleum commodity, the market value or other amount referred to in that paragraph in relation to the marketable petroleum commodity shall, for the purposes of this Act, be taken to have been derived by the person or persons entitled to receive receipts from the sale of marketable petroleum commodities produced in relation to the project and, where there are 2 or more such persons, in the same respective shares as those persons are or were entitled to receive those receipts.

    SECTION 27   ASSESSABLE PROPERTY RECEIPTS  

    27(1)  
    For the purposes of this Act, a reference to assessable property receipts derived by a person in relation to a petroleum project is a reference to:


    (a) the consideration receivable by the person in respect of the disposal, loss or destruction of property in respect of which capital expenditure being eligible real expenditure in relation to the project (including in the case of a combined project any pre-combination project in relation to the project) was incurred by the person;


    (b) the value of property in respect of which capital expenditure of a kind referred to in paragraph (a) was incurred by the person, as at the date of any other termination of the use of the property in relation to the project;


    (c) the amount or value receivable by the person under a policy of insurance or otherwise in respect of damage to property in respect of which capital expenditure of a kind referred to in paragraph (a) was incurred by the person;


    (d) any amount receivable by the person from the hiring or leasing out of, or the granting of rights to use, property that is or was also being used in relation to the project, being property in respect of which capital expenditure of a kind referred to in paragraph (a) was incurred by the person; or


    (e) any amount receivable by the person from the provision of information obtained:


    (i) from any survey, appraisal or study in respect of which eligible real expenditure in relation to the project (including in the case of a combined project any pre-combination project in relation to the project) was incurred by the person; or

    (ii) otherwise as a result of the incurring by the person of such expenditure.

    27(2)  
    In paragraph (1)(a), a reference to the consideration in respect of the disposal, loss or destruction of property is a reference to:


    (a) where the property is or was sold (whether with or without other property) for a specified price - the sale price of the property, less the expenses of the sale of the property, or less such part of the expenses of the sale of the property together with the other property as the Commissioner determines;


    (b) where the property is or was sold with other property and a specified price is or was not allocated to the property - such part of the total sale price, less the expenses of the sale, as the Commissioner determines;


    (c) where the property is or was disposed of otherwise than by sale - the value of the property at the date of disposal; or


    (d) where the property is or was lost or destroyed - the amount or value receivable under a policy of insurance or otherwise in respect of the loss or destruction.

    27(3)  


    Any future closing-down expenditure in relation to licensed property and a petroleum project must be taken into account in working out the assessable property receipts derived by a person in relation to the project to the extent that the assessable property receipts are worked out under paragraph (1)(b) in relation to the termination of the use of the licensed property.

    27(4)  


    Assessable property receipts worked out under paragraph (1)(b) are taken to be zero if future closing-down expenditure taken into account under subsection (3) equals or exceeds what would have been those assessable property receipts if the future closing-down expenditure was not taken into account.
    Note:

    In this case, an extra amount may be included in the person's closing-down expenditure in relation to the project: see subsection 39(3).

    SECTION 28   ASSESSABLE MISCELLANEOUS COMPENSATION RECEIPTS  

    28(1)  
    For the purposes of this Act, a reference to assessable miscellaneous compensation receipts derived by a person in relation to a petroleum project is a reference to amounts of the following kinds:


    (a) amounts receivable by the person by way of insurance, compensation or indemnity in respect of:


    (i) the loss or destruction, or the loss of any profit caused by the loss or destruction, of any petroleum, or constituent of petroleum, recovered or recoverable from the eligible exploration or recovery area in relation to the project (including in the case of a combined project any pre-combination project in relation to the project), being a loss or destruction that occurred before a marketable petroleum commodity had been produced from the petroleum;

    (ii) the loss or destruction, or the loss of any profit caused by the loss or destruction, of any marketable petroleum commodity produced from petroleum recovered from the area referred to in subparagraph (i), being a loss or destruction that occurred before the commodity became an excluded commodity; or

    (iii) the loss of any amount that would otherwise have been an assessable receipt derived by the person in relation to the project;


    (b) amounts receivable by the person in respect of eligible real expenditure incurred by the person in relation to the project (including in the case of a combined project any pre-combination project in relation to the project), being amounts by way of:


    (i) indemnity or compensation for the incurring of the expenditure;

    (ii) refund of the expenditure; or

    (iii) rebate, discount or commission in respect of the expenditure.


    (c) (Repealed by No 83 of 2014)

    28(2)  


    However, an amount referred to in subparagraph (b)(ii) that is a refund of resource tax expenditure is increased by dividing the amount by the rate mentioned in section 5 of the Petroleum Resource Rent Tax (Imposition - General) Act 2012.

    SECTION 29   29   ASSESSABLE EMPLOYEE AMENITIES RECEIPTS  
    For the purposes of this Act, a reference to assessable employee amenities receipts derived by a person in relation to a petroleum project is a reference to amounts receivable by the person for or in respect of the provision of employee amenities in respect of which eligible real expenditure in relation to the project (including in the case of a combined project any pre-combination project in relation to the project) was incurred by the person.

    SECTION 29A   ASSESSABLE INCIDENTAL PRODUCTION RECEIPTS  

    29A(1)  


    For the purposes of this Act, a reference to assessable incidental production receipts derived by a person in relation to a petroleum project is a reference to the consideration receivable, less the amount mentioned in subsection (2), by the person in relation to the sale of a product, or the provision of a service relating to carbon capture and storage, if:


    (a) it has been recovered, extracted, provided or produced in carrying on operations, facilities or other things of a kind mentioned in section 37, 38 or 39 in relation to the project; and


    (b) it is not petroleum or a marketable petroleum commodity; and


    (c) eligible real expenditure in relation to the project (including, in the case of a combined project, any pre-combination project in relation to the project) was incurred by the person in relation to those operations, facilities, or other things.

    Example:

    Excess electricity that is produced as part of the petroleum project is sold.

    29A(2)  
    The amount is the sum of any expenditure (whether of a capital or revenue nature) incurred by the person to the extent that:


    (a) it is incurred in deriving assessable incidental production receipts in relation to the petroleum project; and


    (b) it is not eligible real expenditure in relation to the petroleum project.

    SECTION 30   30   REDUCTION OF AMOUNT OF ASSESSABLE PROPERTY ETC. RECEIPTS  
    Where:


    (a) but for this section, a person would, in relation to a petroleum project, derive for the purposes of this Act an amount (in this section referred to as the assessable amount ) of assessable property receipts, assessable miscellaneous compensation receipts, assessable employee amenities receipts or assessable incidental production receipts in relation to property in respect of which eligible real expenditure was incurred by the person in relation to the project; and


    (b) the Commissioner considers that, because section 42 applied in relation to the eligible real expenditure or for any other reason, a proportion only of the assessable amount is attributable to the eligible real expenditure;

    the person shall be taken for the purposes of this Act to have derived only that proportion of the assessable amount.

    SECTION 31   31   TIME OF DERIVATION OF RECEIPTS  


    For the purposes of this Act:


    (a) assessable petroleum receipts; or


    (aa) assessable tolling receipts; or


    (b) assessable exploration recovery receipts; or


    (c) assessable property receipts; or


    (d) assessable miscellaneous compensation receipts; or


    (e) assessable employee amenities receipts; or


    (ea) assessable incidental production receipts;

    may be derived by a person in relation to a petroleum project:


    (f) unless paragraph (g) or (h) applies - at any time, including a time:


    (i) before the project commenced or after the project has ceased; or

    (ii) before the commencement of this Act; or


    (g) in the case of the Bass Strait project - at any time on or after 1 July 1990, including a time after the project has ceased; or


    (h) in the case of the North West Shelf project - at any time on or after 1 July 2012, including a time before the project commenced or after the project has ceased.

    31(2)  
    (Repealed by No 43 of 2019)

    SECTION 31A   31A   ELIGIBLE REAL EXPENDITURE AND THE BASS STRAIT PROJECT  
    Despite section 45, this Division applies in relation to the Bass Strait project, or a project in relation to which the Bass Strait project is a pre-combination project, as if eligible real expenditure could be incurred in relation to the Bass Strait project at any time, including a time before 1 July 1990.

    SECTION 31AA   31AA   ELIGIBLE REAL EXPENDITURE - NORTH WEST SHELF PROJECT  


    Despite section 45, this Division applies in relation to the North West Shelf project as if eligible real expenditure could be incurred in relation to the project at any time, including a time before 1 July 2012.

    Division 3 - Deductible expenditure  

    SECTION 31B   31B   EFFECT OF INPUT TAX CREDITS ETC. ON DEDUCTIBLE EXPENDITURE  
    For the purposes of this Division, a reference to an amount of expenditure incurred, or a liability incurred, by a person does not include an amount equal to:


    (a) any input tax credit to which the person is entitled; or


    (b) any decreasing adjustments that the person has;

    in relation to that expenditure or liability.

    SECTION 32   32   DEDUCTIBLE EXPENDITURE  
    For the purposes of this Act, a reference to the deductible expenditure incurred by a person in a financial year in relation to a petroleum project (not being an ineligible project in relation to the financial year) is a reference to the total expenditure of the following kinds incurred by the person in the financial year in relation to the project:


    (a) class 1 augmented bond rate general expenditure;


    (b) class 1 augmented bond rate exploration expenditure;


    (c) class 2 uplifted general expenditure;


    (d) class 1 GDP factor expenditure;


    (e) class 2 uplifted exploration expenditure;


    (f) class 2 GDP factor expenditure;


    (fa) resource tax expenditure;


    (fb) (Repealed by No 43 of 2019)


    (fc) starting base expenditure;


    (g) closing-down expenditure.

    SECTION 33   CLASS 1 AUGMENTED BOND RATE GENERAL EXPENDITURE  

    33(1)  


    For the purposes of this Act, a reference to the class 1 augmented bond rate general expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project, the Bass Strait project or the North West Shelf project) is a reference to the sum of:


    (a) any amount of class 1 general project expenditure actually incurred by the person in relation to the project in the financial year, not being expenditure incurred more than 5 years before the production licence in relation to the project came into force; and


    (b) any amount that is taken by subsection (3) or Division 5 to be class 1 augmented bond rate general expenditure incurred by the person in relation to the project in the financial year.

    33(2)  
    For the purposes of this Act, a reference to the class 1 augmented bond rate general expenditure incurred by a person in a financial year in relation to a combined project is a reference to the sum of:


    (a) any amount of class 1 general project expenditure actually incurred by the person in relation to the project in the financial year (not being expenditure incurred before the project combination certificate in relation to the project came into force);


    (b) any amount that is taken by subsection (3) or Division 5 to be class 1 augmented bond rate general expenditure incurred by the person in relation to the project in the financial year; and


    (c) where the financial year is the year in which the project combination certificate in relation to the project came into force - any amount of class 1 general project expenditure, or any amount that is taken by subsection (3) or Division 5 to be class 1 augmented bond rate general expenditure, incurred by the person in relation to the pre-combination projects in relation to the project in the financial year.

    33(3)  
    For the purposes of subsection (1) or (2), where the class 1 augmented bond rate general expenditure incurred by a person in a financial year in relation to a petroleum project exceeds the assessable receipts derived by the person in the financial year in relation to the project, an amount ascertained in accordance with the formula A (1.15 + B), where:

    A is the amount of the excess; and

    B is the long-term bond rate in relation to the financial year;

    shall be taken to be class 1 augmented bond rate general expenditure incurred by the person in relation to the project on the first day of the next succeeding financial year.

    33(4)  
    In this section:

    class 1 general project expenditure
    means general project expenditure actually incurred before 1 July 1990.

    SECTION 34   CLASS 1 AUGMENTED BOND RATE EXPLORATION EXPENDITURE  

    34(1)  


    For the purposes of this Act, a reference to the class 1 augmented bond rate exploration expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project, the Bass Strait project or the North West Shelf project) is a reference to the sum of:


    (a) any amount of class 1 exploration expenditure actually incurred by the person in relation to the project in the financial year, not being expenditure incurred more than 5 years before the production licence in relation to the project came into force; and


    (b) any amount that is taken by subsection (3), subsection 36(1) or Division 5 to be class 1 augmented bond rate exploration expenditure incurred by the person in relation to the project in the financial year.

    34(2)  
    For the purposes of this Act, a reference to the class 1 augmented bond rate exploration expenditure incurred by a person in a financial year in relation to a combined project is a reference to the sum of:


    (a) any amount of class 1 exploration expenditure actually incurred by the person in relation to the project in the financial year (not being expenditure incurred before the project combination certificate in relation to the project came into force);


    (b) any amount that is taken by subsection (3), subsection 36(1) or Division 5 to be class 1 augmented bond rate exploration expenditure incurred by the person in relation to the project in the financial year; and


    (c) where the financial year is the year in which the project combination certificate in relation to the project came into force - any amount of class 1 exploration expenditure, or any amount that is taken by subsection (3), paragraph 36(1)(b) or Division 5 to be class 1 augmented bond rate exploration expenditure, incurred by the person in relation to the pre-combination projects in relation to the project in the financial year.

    34(3)  
    For the purposes of subsection (1) or (2), where the sum of the class 1 augmented bond rate general expenditure and the class 1 augmented bond rate exploration expenditure incurred by a person in a financial year in relation to a petroleum project exceeds the assessable receipts derived by the person in the financial year in relation to the project, an amount ascertained in accordance with the formula A (1.15 + B), where:

    A is so much of the excess as does not exceed the amount of the class 1 augmented bond rate exploration expenditure; and

    B is the long-term bond rate in relation to the financial year;

    shall be taken to be class 1 augmented bond rate exploration expenditure incurred by the person in relation to the project on the first day of the next succeeding financial year.

    34(4)  
    In this section:

    class 1 exploration expenditure
    means exploration expenditure actually incurred before 1 July 1990.

    SECTION 34A   CLASS 2 UPLIFTED GENERAL EXPENDITURE  

    34A(1)  


    For the purposes of this Act, a reference to the class 2 uplifted general expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project, the Bass Strait project or the North West Shelf project) is a reference to the sum of:


    (a) any amount of class 2 general project expenditure actually incurred by the person in relation to the project in the financial year, not being expenditure incurred more than 5 years before the earlier of the following:


    (i) the day specified in the production licence notice in relation to the project;

    (ii) the day the production licence was issued in relation to the project; and


    (b) any amount that is taken by subsection (4) or Division 5 to be class 2 uplifted general expenditure incurred by the person in relation to the project in the financial year.

    34A(2)  


    For the purposes of this Act, a reference to the class 2 uplifted general expenditure incurred by a person in a financial year in relation to a combined project is a reference to the sum of:


    (a) any amount of class 2 general project expenditure actually incurred by the person in relation to the project in the financial year (not being expenditure incurred before the project combination certificate in relation to the project came into force); and


    (b) any amount that is taken by subsection (4) or Division 5 to be class 2 uplifted general expenditure incurred by the person in relation to the project in the financial year; and


    (c) if the financial year is the year in which the project combination certificate in relation to the project came into force - any amount of class 2 general project expenditure, or any amount that is taken by subsection (4) or Division 5 to be class 2 uplifted general expenditure, incurred by the person in relation to the pre-combination projects in the financial year.

    34A(3)  


    For the purposes of this Act, a reference to the class 2 uplifted general expenditure incurred by a person in a financial year in relation to the Bass Strait project or the North West Shelf project is a reference to the sum of:


    (a) any amount of class 2 general project expenditure actually incurred by the person in relation to the project in the financial year; and


    (b) any amount that is taken by subsection (4) or Division 5 to be class 2 uplifted general expenditure incurred by the person in relation to the project in the financial year.

    34A(4)  


    For the purposes of subsection (1), (2) or (3), if the sum of:


    (a) the class 1 augmented bond rate general expenditure; and


    (b) the class 1 augmented bond rate exploration expenditure; and


    (c) the class 2 uplifted general expenditure;

    incurred by a person in a financial year (in this subsection called the assessable year ) in relation to a petroleum project exceeds the assessable receipts derived by the person in the assessable year in relation to the project, the person is taken to incur, in relation to the project and on the first day of the next financial year, an amount of class 2 uplifted general expenditure worked out in accordance with the formula:

    Available excess × Uplift rate

    where:

    Available excess
    means so much of the excess as does not exceed the class 2 uplifted general expenditure incurred in the assessable year.

    Augmented bond rate
    (Repealed by No 43 of 2019)

    uplift rate
    :


    (a) if:


    (i) the project is not a combined project; and

    (ii) the production licence in relation to the project is a post-June 2019 licence; and

    (iii) any person derived assessable petroleum receipts in relation to the project at any time after the licence was granted; and

    (iv) the assessable year is 10 or more years after the first financial year in which such assessable petroleum receipts were derived;

    the uplift rate is the long-term bond rate in relation to the assessable year plus 1; or


    (b) if:


    (i) the project is a combined project; and

    (ii) one or more post-June 2019 licences are, or have been, in force in relation to the project, or a pre-combination project in relation to the project; and

    (iii) any person derived assessable petroleum receipts in relation to the project, or a pre-combination project in relation to the project, at any time after the first such licence was granted; and

    (iv) the assessable year is 10 or more years after the first financial year in which such assessable petroleum receipts were derived;

    the uplift rate is the long-term bond rate in relation to the assessable year plus 1; or


    (c) if paragraphs (a) and (b) do not apply - the uplift rate is the long-term bond rate in relation to the assessable year plus 1.05.

    34A(5)  


    In this section:

    class 2 general project expenditure
    means general project expenditure actually incurred on or after 1 July 1990 (other than starting base expenditure).

    post-June 2019 licence
    : a production licence is a post-June 2019 licence if the earlier of the following is on or after 1 July 2019:


    (a) if a notice was given under subsection 258(7) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 in relation to the application for the licence - the date specified in the notice as the last date on which information was provided;


    (b) the day the production licence is granted.

    SECTION 35   CLASS 1 GDP FACTOR EXPENDITURE  

    35(1)  


    For the purposes of this Act, a reference to the class 1 GDP factor expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project, the Bass Strait project or the North West Shelf project) is a reference to the sum of:


    (a) any amount of class 1 GDP factor expenditure actually incurred by the person in relation to the project in the financial year, being expenditure incurred more than 5 years before the earlier of the following:


    (i) the day specified in the production licence notice in relation to the project;

    (ii) the daythe production licence was issued in relation to the project; and


    (b) any amount that is taken by subsection (3), subsection 36(1) or Division 5 to be class 1 GDP factor expenditure incurred by the person in relation to the project in the financial year.

    35(2)  
    For the purposes of this Act, a reference to the class 1 GDP factor expenditure incurred by a person in a financial year in relation to a combined project is a reference to the sum of:


    (a) any amount that is taken by subsection (3), subsection 36(1) or Division 5 to be class 1 GDP factor expenditure incurred by the person in relation to the project in the financial year; and


    (b) where the financial year is the year in which the project combination certificate in relation to the project came into force - any amount that is taken by subsection (3), paragraph 36(1)(b) or Division 5 to be class 1 GDP factor expenditure incurred by the person in relation to the pre-combination projects in relation to the combined project in the financial year.

    35(3)  
    For the purposes of subsection (1) or (2), if the sum of:


    (a) the class 1 augmented bond rate general expenditure; and


    (b) the class 1 augmented bond rate exploration expenditure; and


    (c) the class 2 uplifted general expenditure; and


    (d) the class 1 GDP factor expenditure;

    incurred by a person in a financial year in relation to a petroleum project exceeds the assessable receipts derived by the person in the financial year in relation to the project, an amount ascertained in accordance with the formula AB , where:

    A is so much of the excess as does not exceed the amount of the GDP factor expenditure; and

    B is the class 1 GDP factor in relation to the financial year;

    shall be taken to be class 1 GDP factor expenditure incurred by the person in relation to the project on the first day of the next succeeding financial year.

    35(4)  
    In this section:

    class 1 GDP factor expenditure
    means general project expenditure incurred in any financial year, orexploration expenditure incurred before 1 July 1990.

    SECTION 35A   CLASS 2 UPLIFTED EXPLORATION EXPENDITURE  

    35A(1)  


    For the purposes of this Act, the amount of class 2 uplifted exploration expenditure that a person is taken to have incurred in a financial year in relation to a petroleum project is to be determined in accordance with Part 2 of Schedule 1.
    Note:

    the following provisions of Part 2 of Schedule 1 provide for a person to be taken to have incurred an amount of class 2 uplifted exploration expenditure:

  • paragraph 8(4)(a)
  • paragraph 8(5)(a).
  • 35A(2)  


    The expenditure to which an amount of class 2 uplifted exploration expenditure is, according to Part 2 of Schedule 1, attributable, must not be counted again as expenditure incurred, or taken to be incurred, by a person:


    (a) when working out the liability of the person to tax in relation to a later financial year; or


    (b) when working out, in accordance with Part 2, 3 or 4 of Schedule 1, whether there is expenditure that is transferable by the person in relation to a later financial year.

    Note:

    the following provisions of Part 2 of Schedule 1 deal with the expenditure to which an amount of class 2 uplifted exploration expenditure is attributable:

  • paragraph 8(4)(b)
  • paragraph 8(5)(b) and subclauses 8(6) and (7).
  • SECTION 35B   CLASS 2 GDP FACTOR EXPENDITURE  

    35B(1)  


    For the purposes of this Act, the amount of class 2 GDP factor expenditure that a person is taken to have incurred in a financial year in relation to a petroleum project is to be determined in accordance with Part 3 of Schedule 1.
    Note:

    the following provisions of Part 3 of Schedule 1 provide for a person to be taken to have incurred an amount of class 2 GDP factor expenditure:

  • paragraph 12(3)(a)
  • paragraph 12(4)(a).
  • 35B(2)  


    The expenditure to which an amount of class 2 GDP factor expenditure is, according to Part 3 of Schedule 1, attributable, must not be counted again as expenditure incurred, or taken to be incurred, by a person:


    (a) when working out the liability of the person to tax in relation to a later financial year; or


    (b) when working out, in accordance with Part 2, 3 or 4 of Schedule 1, whether there is expenditure that is transferable by the person in relation to a later financial year.

    Note:

    the following provisions of Part 3 of Schedule 1 deal with the expenditure to which an amount of class 2 GDP factor expenditure is attributable:

  • paragraph 12(3)(b)
  • paragraph 12(4)(b) and subclauses 12(5) and (6).
  • SECTION 35C   RESOURCE TAX EXPENDITURE  

    35C(1)  
    For the purposes of this Act, a reference to the resource tax expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project) is a reference to the sum of:


    (a) any amount of resource tax expenditure actually incurred by the person in relation to the project in the financial year; and


    (b) any amount that is taken by subsection (5) or Division 5 to be resource tax expenditure incurred by the person in relation to the project in the financial year.

    35C(2)  
    For the purposes of this Act, a reference to the resource tax expenditure incurred by a person in a financial year in relation to a combined project is a reference to the sum of:


    (a) any amount of resource tax expenditure actually incurred by the person in relation to the project in the financial year (not being expenditure incurred before the project combination certificate in relation to the project came into force); and


    (b) any amount that is taken by subsection (5) or Division 5 to be resource tax expenditure incurred by the person in relation to the project in the financial year; and


    (c) if the financial year is the year in which the project combination certificate in relation to the project came into force - any amount of resource tax expenditure, or any amount that is taken by subsection (5) or Division 5 to be resource tax expenditure, incurred by the person in relation to the pre-combination projects in the financial year.

    35C(3)  
    For the purposes of subsections (1) or (2), a reference to resource tax expenditure incurred by a person in a financial year in relation to a petroleum project is a reference to resource tax expenditure incurred by the person in the year to the extent the expenditure:


    (a) is incurred in relation to petroleum recovered, on or after 1 July 2012, from the production licence area for the project; and


    (b) is incurred under an Australian law (other than this Act); and


    (c) is expenditure to which one of the following applies:


    (i) the expenditure is a royalty, or would be a royalty if the petroleum were owned by the Commonwealth, just before the recovery of the petroleum;

    (ii) the expenditure is an excise;

    (iii) the expenditure is an amount calculated by reference to the revenue, expenditure or profits made or incurred by a person in relation to petroleum recovered from the production licence area for the project;

    (iv) the expenditure is an amount calculated by reference to the value, at the wellhead, of petroleum recovered from the production licence area for the project.

    35C(4)  
    However, the amount of resource tax expenditure under subsection (3) is increased by dividing it by the rate of tax mentioned in section 5 of the Petroleum Resource Rent Tax (Imposition - General) Act 2012.

    35C(5)  


    For the purposes of subsection (1) or (2), if the sum of the following incurred by a person in a financial year (the assessable year ) in relation to a petroleum project exceeds the assessable receipts derived by the person in the assessable year in relation to the project:


    (a) the class 1 augmented bond rate general expenditure;


    (b) the class 1 augmented bond rate exploration expenditure;


    (c) the class 2 uplifted general expenditure;


    (d) the class 1 GDP factor expenditure;


    (e) the class 2 uplifted exploration expenditure;


    (f) the class 2 GDP factor expenditure;


    (g) the resource tax expenditure;

    the person is taken to incur, in relation to the project and on the first day of the next financial year, an amount of resource tax expenditure worked out in accordance with the formula:


    Available excess × Augmented bond rate

    where:

    augmented bond rate
    means the long term bond rate in relation to the assessable year plus 1.05.

    available excess
    means so much of the excess as does not exceed the resource tax expenditure incurred in the assessable year.

    35C(6)  
    Despite subsection (3), if a person (the eligible person ) incurs a liability to make a payment to procure expenditure of a kind mentioned in subsection (3) by another person, then the expenditure is taken to have been incurred by the eligible person, and not by the other person, to the extent of the liability.

    SECTION 35D   35D   ACQUIRED EXPLORATION EXPENDITURE  
    (Repealed by No 43 of 2019)

    SECTION 35E   STARTING BASE EXPENDITURE  

    35E(1)  
    For the purposes of this Act, a reference to the starting base expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project) is a reference to:


    (a) in relation to the starting base financial year for the project - the person's starting base amount in relation to the interest; or


    (b) in relation to any subsequent financial year - any amount that is taken by subsection (3) or Division 5 to be starting base expenditure incurred by the person in relation to the project in the financial year.

    35E(1A)  


    However, if:


    (a) the petroleum project is the North West Shelf project; and


    (b) in the starting base financial year for the project or in a later financial year, a production licence relating to the project comes into existence; and


    (c) the production licence is derived from an exploration permit, or a retention lease, that existed at the start of 1 July 2012;

    subsection (1) has effect as if the starting base expenditure incurred by the person in that financial year in relation to the project includes an amount equal to the person's starting base expenditure in that financial year in relation to the petroleum project that would, but for subsection 19(1B), relate to that production licence.

    35E(1B)  


    For the purposes of this Act, starting base expenditure incurred by a person in the starting base financial year is taken to be incurred on the first day of the starting base financial year.

    35E(2)  
    For the purposes of this Act, a reference to the starting base expenditure incurred by a person in a financial year in relation to a combined project is a reference to:


    (a) any amount that is taken by subsection (3) or Division 5 to be starting base expenditure incurred by the person in relation to the project in the financial year; or


    (b) if the project combination certificate in relation to the project came into force in the financial year:


    (i) any amount of starting base expenditure; or

    (ii) any amount that is taken by subsection (3) or Division 5 to be starting base expenditure;
    incurred by the person in relation to the pre-combination projects in relation to the project in the financial year.

    35E(3)  
    For the purposes of subsection (1) or (2), if the sum of:


    (a) the class 1 augmented bond rate general expenditure; and


    (b) the class 1 augmented bond rate exploration expenditure; and


    (c) the class 2 uplifted general expenditure; and


    (d) the class 1 GDP factor expenditure; and


    (e) the class 2 uplifted exploration expenditure; and


    (f) the class 2 GDP factor expenditure; and


    (g) the resource tax expenditure; and


    (h) (Repealed by No 43 of 2019)


    (i) the starting base expenditure;

    incurred by a person in a financial year (the assessable year ) in relation to the petroleum project exceeds the assessable receipts derived by the person in the assessable year in relation to the project, the person is taken to incur, in relation to the project and on the first day of the next financial year, an amount of starting base expenditure worked out in accordance with the formula:


    Available excess × Augmented bond rate

    where:

    augmented bond rate
    means the long term bond rate in relation to the assessable year plus 1.05.

    available excess
    means so much of the excess as does not exceed the starting base expenditure incurred in the assessable year.

    35E(4)  


    References in paragraph (1)(a) and subsections (1A) and (1B) to the starting base financial year for a petroleum project are references to the earliest financial year, after 30 June 2012, in which a production licence relating to the project is in existence.

    SECTION 36   CLASS 1 AUGMENTED BOND RATE EXPLORATION AND CLASS 1 GDP FACTOR EXPENDITURES IN RELATION TO PROJECT GROUPS  

    36(1)  
    Where there is a project group in relation to a person in relation to a year of tax, the following provisions have effect:


    (a) in relation to any petroleum project in the group other than the last occurring project - where there is a carry forward expenditure amount of the person in relation to the project in relation to the year of tax, that amount shall be taken to be class 1 augmented bond rate exploration expenditure or class 1 GDP factor expenditure, as the case requires, incurred by the person in the year of tax in relation to the next occurring project and the person shall not be taken by subsection 34(3) to have incurred class 1 augmented bond rate exploration expenditure, or by subsection 35(3) to have incurred class 1 GDP factor expenditure, in relation to the first-mentioned project on the first day of the next succeeding year of tax;


    (b) in relation to the last occurring petroleum project in the group - where, but for this paragraph, the person would be taken by subsection 34(3) to have incurred an amount of class 1 augmented bond rate exploration expenditure, or by subsection 35(3) to have incurred an amount of class 1 GDP factor expenditure, in relation to the project on the first day of the next succeeding year of tax, that expenditure shall be taken to have been incurred instead by the person on that day in relation to the first occurring of such of the projects in the group as are petroleum projects on that day.

    36(2)  
    Where 2 or more project groups, in relation to a person in relation to a financial year, are related project groups in relation to each other, subsection (1) applies as if the petroleum projects in the groups were projects in a single project group in relation to the person in relation to the financial year.

    36(3)  
    For the purposes of this section:


    (a) where:


    (i) a financial year is a year of tax in relation to a person in relation to 2 or more petroleum projects (not including any ineligible project in relation to the financial year); and

    (ii) the production licence, or at least one of the production licences, in relation to each of the projects is related to the same exploration permit;
    the projects shall be taken to be in a project group in relation to the person in relation to the year of tax;


    (b) a reference to the relevant production licence in relation to a petroleum project is a reference to:


    (i) in the case of a combined project - the production licence in relation to the project that first came into force; and

    (ii) in any other case - the production licence in relation to the project;


    (c) petroleum projects in a project group in relation to a person in relation to a year of tax shall be taken to occur in the order in which the relevant production licences in relation to the projects came into force; and


    (d) a project group, in relation to a person in relation to a financial year, shall be taken to be a related project group in relation to another project group, in relation to the person in relation to the financial year, if:


    (i) one or more of the petroleum projects in the first-mentioned group is a project in the second-mentioned group; or

    (ii) one or more of the petroleum projects in the first-mentioned group is a project in another project group that is a related project group in relation to the second-mentioned project group under subparagraph (i) or this subparagraph.

    36(4)  
    Where, by reason of the application of subsection 34(3) or 35(3) in relation to a person in relation to a petroleum project in relation to a year of tax (in this subsection referred to as the relevant year of tax ), an amount of class 1 augmented bond rate exploration expenditure or class 1 GDP factor expenditure, as the case may be, would, if subsection (1) did not provide otherwise, be taken to be incurred by the person on the first day of the next succeeding year of tax, there shall, for the purposes of this section, be taken to be a carry forward expenditure amount in relation to the person in relation to the project in relation to the relevant year of tax equal to the amount that would so be taken to be incurred if:


    (a) in the case of an amount of class 1 augmented bond rate exploration expenditure - the formula in subsection 34(3) in its application in relation to the relevant year of tax consisted only of component A ; and


    (b) in the case of an amount of class 1 GDP factor expenditure - the formula in subsection 35(3) in its application in relation to the relevant year of tax consisted only of component A .

    SECTION 36A   36A   DESIGNATED FRONTIER AREAS FOR 2004  


    For the purposes of the definition of designated frontier area , the following areas are specified:


    (a) Area T04-5, as first gazetted in the Tasmanian Government Gazette on 5 May 2004 under subsection 20(1) of the repealed Petroleum (Submerged Lands) Act 1967;


    (b) Areas W04-2, W04-4, W04-15 and W04-16, as first gazetted in the Western Australia Government Gazette on 30 March 2004 under subsection 20(1) of the repealed Petroleum (Submerged Lands) Act 1967;


    (c) Area NT04-3, as first gazetted in the Northern Territory Government Gazette on 14 April 2004 under subsection 20(1) of the repealed Petroleum (Submerged Lands) Act 1967.

    Note:

    An amount of exploration expenditure incurred in respect of an area that is specified under this section might be increased by 150% (before the amount is further increased under Schedule 1): see section 36C.

    SECTION 36B   DESIGNATED FRONTIER AREAS FOR 2005 TO 2009  

    36B(1)  


    For the purposes of the definition of designated frontier area , the Resources Minister may designate, in writing, up to (and including) 20% of potential exploration permit areas as frontier areas.
    Note:

    An amount of exploration expenditure incurred in respect of an area that is specified under this section might be increased by 150% (before the amount is further increased under Schedule 1): see section 36C.

    36B(2)  


    The Resources Minister must not specify new areas for a calendar year after 2009.

    36B(3)  


    The Resources Minister must publish an instrument made under subsection (1) in the Gazette.

    36B(4)  


    An instrument made under subsection (1) is not a legislative instrument.

    36B(5)  


    The Resources Minister may, by signed instrument, delegate his or her power under subsection (1) to an SES employee or an acting SES employee in the Resources Department.
    Note:

    The expressions SES employee and acting SES employee are defined in section 2B of the Acts Interpretation Act 1901.

    36B(6)  


    In this section:

    potential exploration permit area
    means an area or areas constituted by a block or blocks in respect of which applications for exploration permits have been invited, but not yet granted, under Part 2.2 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

    SECTION 36C   36C   UPLIFTED FRONTIER EXPENDITURE  


    For the purposes of this Act, the amount of uplifted frontier expenditure that a person is taken to have incurred in a financial year in relation to a petroleum project is worked out as follows:


    Designated frontier expenditure actually
    incurred by the person in the financial year in
    relation to the petroleum project
    × 150%

    SECTION 37   EXPLORATION EXPENDITURE  

    37(1)  


    For the purposes of this Act, a reference to exploration expenditure incurred by a person in relation to a petroleum project is a reference to payments (not being excluded expenditure), whether of a capital or revenue nature, to the extent that they are made by the person:


    (a) in carrying on or providing operations and facilities involved in or in connection with exploration for petroleum in the eligible exploration or recovery area in relation to the project; and


    (b) in carrying on or providing such of the following as are or have been carried on or provided:


    (i) operations and facilities involved in the recovery of any petroleum from the eligible exploration or recovery area (other than any production licence area) in relation to the project;

    (ii) operations and facilities involved in moving any petroleum so recovered to or between any storage or processing facilities prior to the production of any marketable petroleum commodity from the petroleum;

    (iii) operations and facilities involved in the storage, processing or treating of any petroleum so recovered to produce any marketable petroleum commodity from the petroleum;

    (iv) operations and facilities involved in the moving or storage of any such marketable petroleum commodity before it becomes an excluded commodity;

    (v) services, or facilities for the provision of services, in connection with the operations, facilities, amenities and services referred to in this section;

    (vi) employee amenities in connection with the operations, facilities and services referred to in this section;

    (vii) operations and facilities, carried on or provided, for an environmental purpose, in relation to the carrying on or provision of the operations, facilities and services referred to in this section; and


    (c) in procuring another person to stabilise, transport, store, recover or process petroleum recovered from the eligible exploration or recovery area (other than any production licence area) in relation to the project, if that stabilisation, transportation, storage, recovery or processing constitutes:


    (i) the processing of internal petroleum in relation to the project; or

    (ii) the processing of external petroleum in relation to another petroleum project;

    and includes any exploration permit, retention lease or other fee (not being an excluded fee) paid by the person, to the extent that the payment relates to the carrying on or providing of any operations, facilities or other things referred to in this section.

    37(2)  
    Where, by reason of the application of subsection 5(3), exploration for petroleum during a period is taken to occur in a retention lease area or areas in relation to a retention lease or leases related to an exploration permit, any liability incurred during that period to pay an exploration permit fee shall, for the purposes of subsection (1), be taken to relate proportionally to the carrying on of operations involved in exploration for petroleum in the retention lease area or areas and in the remainder of the exploration permit area in relation to the exploration permit, according to the respective sizes of those areas.

    37(2A)  
    (Repealed by No 43 of 2019)

    37(2B)  
    (Repealed by No 43 of 2019)

    37(2C)  
    (Repealed by No 43 of 2019)

    37(3)  


    For the purposes of this section, a person is taken to make a payment when the person becomes liable to make the payment.

    SECTION 38   GENERAL PROJECT EXPENDITURE  

    38(1)  


    For the purposes of this Act, a reference to general project expenditure incurred by a person in relation to a petroleum project is a reference to payments (not being excluded expenditure, exploration expenditure or closing-down expenditure), whether of a capital or revenue nature, to the extent that they are made by the person:


    (a) in carrying on or providing operations and facilities preparatory to the activities referred to in paragraph (b), including in carrying out any feasibility or environmental study; and


    (b) in carrying on or providing the operations, facilities and other things comprising the project; and


    (c) in purchasing, as part of the project, external petroleum, or internal petroleum, in relation to the project; and


    (d) in procuring another person to stabilise, transport, store, recover or process petroleum recovered from the production licence area or areas in relation to the project, if that stabilisation, transportation, storage, recovery or processing constitutes:


    (i) the processing of internal petroleum in relation to the project; or

    (ii) the processing of external petroleum in relation to another petroleum project;

    and includes any production licence or other fee (not being an excluded fee) paid by the person, to the extent that the payment relates to the carrying on or providing of any operations, facilities or other things referred to in this section.

    38(2)  
    To avoid doubt, carrying on or providing the operations, facilities and other things comprising the project referred to in paragraph (1)(b) includes carrying on or providing the operations, facilities and other things in relation to the processing of external petroleum, or internal petroleum, in relation to the project.

    38(3)  


    For the purposes of this section, a person is taken to make a payment when the person becomes liable to make the payment.

    SECTION 39   CLOSING-DOWN EXPENDITURE  

    39(1)  


    For the purposes of this Act, a reference to closing-down expenditure incurred by a person in relation to a petroleum project is a reference to payments (not being excluded expenditure), whether of a capital or revenue nature, to the extent that they are made by the person in carrying on operations involved in closing down the project, including in any environmental restoration as a consequence of closing down the project.

    39(2)  


    For the purposes of this Act, if:


    (a) on the termination of a petroleum project, a person disposes of all of the person's property in respect of which the person incurred capital expenditure that is eligible real expenditure in relation to the project; and


    (b) there is no consideration receivable by the person in respect of the disposal;

    a reference to the closing-down expenditure incurred by the person in relation to the project includes a reference to any consideration given by the person for the disposal, to the extent that the consideration relates to the future closing-down expenditure in relation to the project.

    39(3)  


    For the purposes of this Act, if a person's assessable property receipts under paragraph 27(1)(b) in relation to a petroleum project are taken to be zero because of subsection 27(4), a reference to closing-down expenditure incurred by a person in relation to the project includes a reference to an amount equal to the difference between:


    (a) the future closing-down expenditure in relation to the project; and


    (b) the amount that would, but for subsections 27(3) and 27(4), have been the person's assessable property receipts in relation to the project.

    Example:

    A production licence of Petgas Ltd ceases to be in force on 24 October 2006, but the use of some facilities of the petroleum project in question continues to be permitted by an infrastructure licence that comes into force on that day. The value of the facilities on that day is $240,000, but there are future closing-down costs that result in Petgas Ltd having a future closing-down expenditure of $360,000.

    Under subsection 27(4), Petgas Ltd's assessable property receipts under paragraph 27(1)(b) are taken to be zero. In addition, Petgas Ltd's closing-down expenditure includes an amount of $120,000 (the difference between its future closing-down expenditure and the actual value of the facilities).

    39(4)  


    Closing-down expenditure in relation to a petroleum project does not include closing-down expenditure in relation to operations, facilities or other things comprising the project to the extent that:


    (a) the person has previously had assessable property receipts under paragraph 27(1)(a) in relation to the project and the consideration referred to in that paragraph took into account future closing-down expenditure that relates to those operations, facilities or other things; or


    (b) the person has previously had assessable property receipts under paragraph 27(1)(b) in relation to the project and such future closing-down expenditure was taken into account in working out those assessable property receipts; or


    (c) the person has previously had closing-down expenditure in relation to the project that included such future closing-down expenditure.

    However, this subsection does not apply if there has been a change in the ownership of those operations, facilities or other things after the assessable property receipts or closing-down expenditure arose.

    39(5)  


    For the purposes of this section, a person is taken to make a payment when the person becomes liable to make the payment.

    SECTION 40   BAD DEBTS  

    40(1)  
    Where:


    (a) a debt is a bad debt and is written off as such by a person during a financial year; and


    (b) the debt has been brought to account by the person as a receipt of a kind referred to in section 24, 25, 27, 28 or 29 derived by the person in any financial year in relation to a petroleum project;

    then, at the time at which the debt is written off and in relation to:


    (c) the petroleum project; or


    (d) if, at that time, there is a combined project in relation to which the petroleum project is a pre-combination project - the combined project;

    the person shall be taken for the purposes of this Act to have incurred an amount of:


    (e) where at or before the time at which the debt is written off the person has not incurred any general project expenditure or closing-down expenditure in relation to the petroleum project or the combined project (including any pre-combination project in relation to the project) - exploration expenditure;


    (f) where at or before the time at which the debt is written off the person has incurred general project expenditure, but has not incurred any closing-down expenditure, in relation to the petroleum project or the combined project (including any pre-combination project in relation to the project) - general project expenditure; or


    (g) where at or before the time at which the debt is written off the person has incurred closing-down expenditure in relation to the petroleum project or the combined project - closing-down expenditure;

    equal to the amount of the debt.

    40(2)  


    If a debtor, after incurring a debt that has been brought to account as mentioned in paragraph (1)(b), becomes bankrupt or executes a personal insolvency agreement for the benefit of creditors:


    (a) where, in the opinion of the Commissioner, no amount will be paid on account of the debt - the debt; or


    (b) where, in the opinion of the Commissioner, an amount less than the amount of the debt will be paid on account of the debt - so much of the debt as exceeds the amount that, in the opinion of the Commissioner, will be so paid;

    shall be deemed to be a bad debt.

    40(3)  
    Where a person receives an amount in respect of a debt to which subsection (1) applies, that amount shall for the purposes of this Act be taken to be a receipt of the kind referred to in paragraph (1)(b) derived by the person in relation to:


    (a) the petroleum project referred to in that paragraph; or


    (b) if, at the time at which the amount is received, there is a combined project in relation to which the petroleum project referred to in that paragraph is a pre-combination project - the combined project.

    SECTION 41   EFFECT OF PROCURING THE CARRYING ON OF OPERATIONS ETC. BY OTHERS  

    41(1)  


    If a person (the eligible person ) makes or made a payment wholly or partly to procure the carrying on or providing of operations, facilities or other things of a kind referred to in section 37, 38 or 39 by another person, then:


    (a) for the purposes of this Act:


    (i) the operations, facilities or other things are taken to have been carried on or provided by the eligible person and not by the other person; and

    (ii) to the extent that the payment is to procure the carrying on or providing of the operations, facilities or other things - it is taken to have been made by the eligible person in carrying on or providing the operations, facilities or other things; and


    (b) if subsection (1A) does not apply to the other person in relation to the payment - to the extent that the payment is to procure the carrying on or providing of the operations, facilities or other things, the payment is taken, for the purposes of sections 37, 38, 39 and 44, to have the same character and nature as the operations, facilities or other things procured; and


    (c) if subsection (1A) applies to the other person in relation to the payment - to the extent that:


    (i) the payment is to procure the carrying on or providing of the operations, facilities or other things; and

    (ii) the payment relates to use of property on which the other person has incurred capital expenditure;

    the payment is taken, for the purposes of those sections, to have the same character and nature as the operations, facilities or other things procured; and


    (d) if subsection (1A) applies to the other person in relation to the payment - to the extent that:


    (i) the payment is to procure the carrying on or providing of the operations, facilities or other things; and

    (ii) the payment does not relate to use of property on which the other person has incurred capital expenditure;

    the payment is taken, for the purposes of those sections, to be of the same amount, and to have the same character and nature, as the expenditure the other person incurred in carrying on or providing the operations, facilities or other things procured.

    Note:

    If the payment is excluded expenditure, it will not be exploration expenditure under section 37, general project expenditure under section 38 or closing-down expenditure under section 39. However, if paragraph (1)(d) applies to the payment, the amount taken to be excluded expenditure may be reduced under subsection (1D) of this section.

    41(1A)  


    This subsection applies to the other person in relation to a payment if, at the time the payment is made, the other person:


    (a) holds an interest in the petroleum project to which the operations, facilities or other things relate; or


    (b) is connected (within the meaning of section 328-125 of the Income Tax Assessment Act 1997) with the eligible person.

    41(1B)  


    The amount of the other person's expenditure referred to in paragraph (1)(d) is taken not to exceed so much of the amount of the eligible person's payment as:


    (a) is a payment to procure the carrying on or providing of the operations, facilities or other things; and


    (b) does not relate to use of property on which the other person has incurred capital expenditure.

    41(1C)  


    If:


    (a) subsection (1A) applies to the other person in relation to the payment; and


    (b) the other person, to any extent, procures for:


    (i) the eligible person; or

    (ii) the eligible person and one or more persons who hold an interest in the project;

    the operations, facilities or other things from a third person who is connected (within the meaning of section 328-125 of the Income Tax Assessment Act 1997) with the other person;

    the references in paragraph (1)(d) and subsection (1B) to the other person's expenditure are taken (to the extent that carrying on or providing the operations, facilities or other things was procured from the third person) to be references to the third person's expenditure.

    41(1D)  


    If the other person's expenditure is reduced because of subsection (1B), sections 37, 38, 39 and 44 apply in relation to that expenditure as if it were reduced to the same extent.

    41(2)  


    This section does not apply if the other person carries on or provides the operations, facilities or other things as part of the processing of:


    (a) internal petroleum in relation to the petroleum project; or


    (b) external petroleum in relation to a petroleum project other than the project to which the operations, facilities or other things referred to in subsection (1) relate.

    41(3)  


    For the purposes of this section, a person is taken to make a payment when the person becomes liable to make the payment.

    SECTION 42   42   EXPENDITURE ON PROPERTY FOR PARTIAL PROJECT USE  
    Where:


    (a) a person incurs or incurred eligible real expenditure in relation to a petroleum project; and


    (b) the eligible real expenditure is or was capital expenditure in respect of property for use only proportionally (the proportion of use of which is in this section referred to as the eligible proportion ) in carrying on or providing the operations, facilities or other things by reason of which the capital expenditure is eligible real expenditure of the person in relation to the project;

    the eligible proportion only of the eligible real expenditure shall be taken for the purposes of this Act to be the eligible real expenditure.

    SECTION 43   DEFERRED USE OF PROPERTY ON PROJECT ETC.  

    43(1)  
    Where:


    (a) a person incurs or incurred capital expenditure in relation to property, being eligible real expenditure in relation to a petroleum project or petroleum projects;


    (b) the person terminates or terminated the use of the property in relation to the project or all of the projects otherwise than by sale or other disposal; and


    (c) immediately after the termination of the use of the property the person is or was using the property, or at a later time the person commences or commenced to use the property, in carrying on or providing operations, facilities or other things of a kind referred to in section 37, 38 or 39 in relation to a petroleum project or petroleum projects;

    then, for the purposes of this Act (including this section):


    (d) the person shall be taken to have incurred capital expenditure immediately after the termination or at the later time referred to in paragraph (c), as the case may be, in carrying on or providing the operations, facilities or other things, referred to in paragraph (c) in relation to the project or projects referred to in that paragraph; and


    (e) the amount of the expenditure shall be taken to be equal to so much of the value of the property at the time at which the person is so taken to have incurred the expenditure as, in the opinion of the Commissioner, is attributable to the expenditure referred to in paragraph (a).

    43(2)  
    Where:


    (a) a person incurs or incurred capital expenditure in relation to property that is not or was not for use in carrying on or providing operations, facilities or other things of a kind referred to in section 37, 38 or 39 in relation to any petroleum project; and


    (b) the person commences or commenced to use the property at a later time in carrying on or providing such operations, facilities or other things in relation to a petroleum project or projects;

    the person shall, for the purposes of this Act, be taken to have incurred expenditure, at that later time, in carrying on or providing the operations, facilities or other things in relation to the project or projects of an amount equal to so much of the value of the property at that later time as, in the opinion of the Commissioner, is attributable to the expenditure referred to in paragraph (a).

    SECTION 44   EXCLUDED EXPENDITURE  

    44(1)  
    For the purposes of this Act, a reference to excluded expenditure is a reference to:


    (a) payments of principal or interest on a loan or other borrowing costs; or


    (b) interest components of hire-purchase payments; or


    (c) payments of dividends or the cost of issuing shares; or


    (d) the repayment of equity capital; or


    (e) payments of a kind known as private override royalty payments; or


    (f) payments to acquire, or to acquire an interest in, an exploration permit, retention lease, production licence, pipeline licence or access authority, otherwise than in respect of the grant of the permit, lease, licence or authority; or


    (g) payments to acquire interests in petroleum project profits, receipts or expenditures; or


    (h) payments of tax under the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997; or


    (i) payments of GST under the GST Act; or


    (ia) (Repealed by No 83 of 2014)


    (j) payments of administrative or accounting costs, or of wages, salary or other work costs, incurred indirectly in carrying on or providing operations, facilities or other things of a kind referred to in sections 37, 38 and 39; or


    (k) payments in respect of land or buildings for use in connection with administrative or accounting activities in respect of the carrying on or provision of other operations, facilities or things of a kind referred to in sections 37, 38 and 39, not being land or buildings located at or adjacent to the site or sites at which those other operations, facilities or things are carried on or provided.

    44(2)  


    For the purposes of paragraph (1)(e), a private override royalty payment does not include a payment to the extent:


    (a) it is by way of compensation for carrying on or providing, in an area the operations, facilities or other things comprising a petroleum project; and


    (b) it is paid:


    (i) to a native title holder (within the meaning of the Native Title Act 1993) whose approved determination of native title (within the meaning of that Act) relates to that area; or

    (ii) to a registered native title claimant (within the meaning of the Native Title Act 1993) whose claimant application (within the meaning of that Act) relates to that area; or

    (iii) to a person who holds a right that relates to that area and arises under another Australian law dealing with the rights of Aboriginal persons or Torres Strait Islanders in relation to land or waters.

    SECTION 45   TIME OF INCURRING OF EXPENDITURE  

    Petroleum projects generally

    45(1)  


    For the purposes of this Act, eligible real expenditure may be incurred by a person in relation to a petroleum project (other than the Bass Strait project or the North West Shelf project) at any time, including a time:


    (a) before the project commences or after the project ceases; or


    (b) before the commencement of this Act.

    45(2)  
    (Repealed by No 43 of 2019)

    The Bass Strait project

    45(3)  
    For the purposes of this Act, eligible real expenditure may be incurred by a person in relation to the Bass Strait project at any time on or after 1 July 1990, including a time after the project ceases. The North West Shelf project

    45(4)  


    For the purposes of this Act, eligible real expenditure may be incurred by a person in relation to the North West Shelf project at any time on or after 1 July 2012, including a time after the project ceases. Starting base days

    45(5)  
    (Repealed by No 43 of 2019)

    45(6)  
    (Repealed by No 43 of 2019)

    Resource tax expenditure

    45(7)  


    Despite subsections (1), (3) and (4), resource tax expenditure cannot be incurred by a person, in relation to a petroleum project, before 1 July 2012.

    45(8)  


    To avoid doubt, eligible real expenditure that a person may incur in relation to the North West Shelf project may include expenditure that a person is taken to have incurred in relation to the project, before or after the commencement of this section, because of section 48 or 48A.

    45(9)  


    However, if the person is taken to have incurred the expenditure because of the application of section 48 or 48A in relation to a transaction entered into before 1 July 2012, subsection 48(3) or 48A(11) (as the case requires) does not apply in relation to the transaction.

    Division 3A -Transfer of exploration expenditure incurred on or after 1 July 1990  

    SECTION 45A   TRANSFER OF EXPENDITURE - GENERAL  

    45A(1)  
    This section applies to a person in respect of a financial year in relation to which the person has transferable exploration expenditure.

    45A(2)  


    In relation to the financial year, the person must transfer to petroleum projects as much of the transferable exploration expenditure as can be transferred in accordance with the rules set out in Part 5 of Schedule 1.

    45A(3)  
    A transfer of expenditure under this section in relation to a financial year:


    (a) must be made by completing a transfer notice and giving it to the Commissioner not later than 60 days after the end of the financial year or such later day as the Commissioner allows; and


    (b) subject to subsection (4), takes effect when the notice is given to the Commissioner.

    45A(4)  


    A purported transfer of expenditure under this section has no effect if the transfer is not in accordance with the rules set out in Part 5 of Schedule 1.

    45A(5)  


    A person commits an offence if the person contravenes this section.

    Penalty: 20 penalty units.

    45A(5A)  


    Subsection (5) does not apply to the extent that the person has a reasonable excuse.
    Note:

    A defendant bears an evidential burden in relation to the matters in subsection (5A), see subsection 13.3(3) of the Criminal Code.

    45A(5B)  


    An offence under this section is an offence of strict liability.
    Note:

    For strict liability , see section 6.1 of the Criminal Code.

    45A(6)  


    In this section:

    transfer notice
    means a written notice in the approved form.

    SECTION 45B   TRANSFER OF EXPENDITURE - GROUP COMPANIES  

    45B(1)  
    This sectionapplies where:


    (a) a number of companies are group companies in relation to each other and a financial year; and


    (b) there is unused transferable exploration expenditure in relation to some of the companies (each of which is in this section called a loss company ) and the financial year.

    45B(2)  


    In relation to the financial year, each loss company must transfer, to such of the other companies as are not loss companies and in relation to specified petroleum projects, as much of the loss company's unused transferable exploration expenditure as can be transferred in accordance with the rules set out in Part 6 of Schedule 1.

    45B(3)  
    A transfer of expenditure under this section in relation to a financial year:


    (a) must be made by completing a transfer notice and giving it to the Commissioner not later than 60 days after the end of the financial year or such later day as the Commissioner allows; and


    (b) subject to subsection (4), takes effect when the notice is given to the Commissioner.

    45B(4)  


    A purported transfer of expenditure under this section has no effect if the transfer is not in accordance with the rules set out in Part 6 of Schedule 1.

    45B(5)  


    A person commits an offence if the person contravenes this section.

    Penalty: 20 penalty units.

    45B(5A)  


    Subsection (5) does not apply to the extent that the person has a reasonable excuse.
    Note:

    A defendant bears an evidential burden in relation to the matters in subsection (5A), see subsection 13.3(3) of the Criminal Code.

    45B(5B)  


    An offence under this section is an offence of strict liability.
    Note:

    For strict liability , see section 6.1 of the Criminal Code.

    45B(6)  


    In this section:

    transfer notice
    means a written notice in the approved form.

    unused transferable exploration expenditure
    , in relation to a company and a financial year, means so much of the transferable exploration expenditure in relation to the company and the financial year as is not transferred, or to be transferred, under section 45A.

    SECTION 45C   COMMISSIONER'S POWER TO MAKE TRANSFERS OF EXPENDITURE  

    45C(1)  
    This section applies if a person contravenes section 45A or 45B by failing to transfer expenditure as required by that section in relation to a financial year.

    45C(2)  
    Subject to subsection (3), the Commissioner may transfer the expenditure that the person failed to transfer.

    45C(3)  
    The transfer must:


    (a) be in writing; and


    (b) be such that, if it had been made by the person, it would have been a transfer of expenditure in relation to the financial year under section 45A or 45B, as the case requires.

    45C(4)  
    For the purposes of this Act (other than this section), the transfer is taken to be a transfer by the person under section 45A or 45B, as the case requires.

    45C(5)  
    The transfer may not be revoked or varied except:


    (a) under subsection (6); or


    (b) pursuant to a decision of the Tribunal or an order of a court; or


    (c) to correct an error.

    45C(6)  
    If:


    (a) after the transfer, information becomes available to the Commissioner that was not available at the time of the transfer; and


    (b) the Commissioner would not have transferred the expenditure in the same way, or at all, if he or she had been aware of the information at the time of transferring the expenditure;

    the Commissioner may, in writing, revoke the transfer and, if appropriate, make another transfer of expenditure under this section.

    45C(7)  
    If the Commissioner revokes the transfer, then, for the purposes of this Act, the transfer is taken never to have been made.

    45C(8)  
    The Commissioner must, within 30 days after transferring the expenditure, or revoking the transfer of the expenditure, cause written notice setting out particulars of the transfer or revocation to be given to:


    (a) if the transfer has or had effect as a transfer under section 45A - the person who is taken to have transferred the expenditure; or


    (b) if the transfer has or had effect as a transfer under section 45B - the person who is taken to have transferred the expenditure and the company to which the expenditure is or was transferred.

    45C(9)  


    If a person to whom a notice under subsection (8) is given is dissatisfied with the Commissioner's decision to transfer the expenditure, or revoke the transfer, as the case may be, the person may object against the decision in the manner set out in Part IVC of the Taxation Administration Act 1953.

    45C(10)  


    (Repealed by No 41 of 2005)

    SECTION 45D   EFFECT OF TRANSFER OF EXPENDITURE  

    45D(1)  
    This section applies if a person transfers an amount of expenditure:


    (a) to a petroleum project in relation to a financial year under section 45A; or


    (b) to a company in relation to a petroleum project and a financial year under section 45B.

    45D(2)  


    If the expenditure was incurred in an earlier financial year, then, for the purposes of this Act other than subsection (3), the transfer is taken to be a transfer of the amount worked out in accordance with Part 7 of Schedule 1.

    45D(3)  
    The expenditure transferred (disregarding the effect of subsection (2)):


    (a) must not be transferred again in relation to the financial year; and


    (b) must not be counted again as expenditure incurred, or taken to be incurred, by a person:


    (i) when working out the liability of the person to tax in relation to a later financial year; or

    (ii) when working out, in accordance with Part 2, 3 or 4 of Schedule 1, whether there is expenditure that is transferable by the person in relation to a later financial year.

    SECTION 45E   INSTALMENT TRANSFERS AND ANNUAL TRANSFERS  

    45E(1)  
    Subject to this section, the following provisions apply in relation to instalment periods in the same way as they apply in relation to financial years:


    (a) this Division;


    (b) Schedule 1;


    (c) definitions or other provisions of this Act as they apply for the purpose of this Division or Schedule 1.

    Note:

    A person who contravenes section 45A or 45B as the section applies in relation to an instalment period commits an offence: see subsections 45A(5) and 45B(5).

    45E(2)  
    The provisions mentioned in subsection (1) apply under that subsection only to the extent necessary to require or permit the making of transfers of expenditure in relation to instalment periods.

    45E(3)  
    For the purpose of subsection (1), the following assumptions apply in relation to any petroleum project and an instalment period in a financial year:


    (a) the instalment period is taken to be a financial year;


    (b) the amounts taken by subsections 33(3), 34(3), 34A(4), 35(3) and 36(1) (including because of section 48) to be incurred by any person in relation to any project on the first day of the financial year are instead taken to be only the instalment percentages of those amounts;


    (c) the amounts that would, for the purposes of Schedule 1, be the incurred exploration expenditure amounts in relation to financial years before that financial year are instead taken to be only the instalment percentages of those amounts.

    45E(4)  
    In this Act, an annual transfer is a transfer of an amount of expenditure in accordance with this Division in its application to a financial year.

    45E(5)  
    In this Act, an instalment transfer is a transfer of an amount of expenditure in accordance with this Division in its application under this section to an instalment period.

    45E(6)  
    Despite subsection 45D(3), if an instalment transfer of an amount of expenditure is made in relation to an instalment period in a financial year, the instalment transfer does not prevent the transfer of all (or a part) of that expenditure being made again:


    (a) in relation to a later instalment period; or


    (b) in relation to the financial year or a later financial year (as an annual transfer).

    Note:

    In some circumstances, interest may be charged in relation to an instalment transfer if the expenditure cannot be transferred again under this Division as an annual transfer: see section 98A.

    45E(7)  
    In this section:

    instalment period
    includes a period in a financial year that would be an instalment period if the financial year were a year of tax.

    Division 4 - Tax credits  

    SECTION 46   CREDITS IN RESPECT OF CLOSING-DOWN EXPENDITURE  

    46(1)  
    If, in relation to a petroleum project, the sum of any closing-down expenditure and any other deductible expenditure incurred by a person in a year of tax exceeds the assessable receipts derived by the person in the year of tax:


    (a) so much of the excess as does not exceed the amount of the closing-down expenditure is the person's excess closing-down expenditure for the year of tax; and


    (b) the person is entitled to a credit of the lesser of the following amounts:


    (i) an amount equal to 40% of the excess closing-down expenditure for the year of tax;

    (ii) the total amount of any tax in respect of the project (including in the case of a combined project any pre-combination project in relation to the project) paid or payable by the person in relation to previous years of tax, reduced by the total amount of any credits allowed or allowable to the person under this section in relation to the project in relation to any previous years of tax.
    Greater Sunrise closing-down credits

    46(2)  


    However, for the purposes of the operation of paragraph (1)(a) in relation to a Greater Sunrise project, the amount that is so much of the excess as does not exceed the amount of the closing-down expenditure is taken to be the amount worked out using the following formula:


    Initial excess × Apportionment percentage figure
    100

    where:

    apportionment percentage figure
    has the meaning given by subsection 2C(2).

    initial excess
    means the amount that is so much of the excess as does not exceed the amount of the closing-down expenditure under paragraph (1)(a) ignoring this subsection.

    SECTION 47   APPLICATION OF CREDITS