INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 10AA - Prospecting and mining for petroleum  

SECTION 124AJ   PROSPECTING OR MINING BY CONTRACTORS, PROFIT-SHARING ARRANGEMENTS ETC.  

124AJ(1)   [Work done by others]  

For the purposes of this Division, where the holder of a petroleum prospecting or mining right has, for a consideration provided or to be provided by him, not being a payment of a share of income derived by him from the sale of petroleum or of the products of petroleum or a consideration by way of an assignment or sub-lease of a petroleum prospecting or mining right, procured the performance of work which, if it had been performed by him, would have constituted prescribed petroleum operations or would have constituted exploration or prospecting:

(a) the work shall constitute prescribed petroleum operations or exploration or prospecting, as the case may be, carried on by him and shall not constitute prescribed petroleum operations or exploration or prospecting carried on by the person by whom the work was performed; and

(b) any such consideration shall be deemed to be expenditure incurred by him in the carrying on of prescribed petroleum operations or of exploration or prospecting, as the case may be.

124AJ(2)   [Shared income]  

Where a person who derives income from the sale of petroleum obtained from mining operations carried on by him in an area, or from the sale of products of petroleum so obtained, pays to another person a share of the income so derived in pursuance of an agreement under which:

(a) that other person has carried on prescribed petroleum operations in that area or has engaged in that area in exploration or prospecting for the purpose of discovering petroleum; or

(b) the first-mentioned person has acquired, or has agreed or has an option to acquire, from that other person a petroleum prospecting or mining right or petroleum prospecting or mining information in relation to that area,

the amount so paid to that other person shall, for the purposes of this Division:

(c) be deemed to be income derived by that other person from the sale of petroleum obtained from the carrying on by him of mining operations in that area; and

(d) be deemed not to be expenditure of a kind in respect of which deductions are or have been allowable under this Division incurred by the first-mentioned person.

124AJ(3)   [Right assigned or sub-let]  

Notwithstanding section 21 , where a person has assigned or sub-let a petroleum prospecting or mining right in respect of an area to another person in pursuance of an agreement under which that other person has carried on, or is carrying on, in that area or in another area in respect of which the first-mentioned person holds or has held a petroleum prospecting or mining right, prescribed petroleum operations or has engaged, or is engaging, in that area in exploration or prospecting for the purpose of discovering petroleum, the first-mentioned person shall not be deemed, by virtue of the assignment or sub-lease, to have incurred for the purposes of this Division expenditure of a kind in respect of which deductions are or have been allowable under this Division.