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Minerals Resource Rent Tax Bill 2011

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2010-2011

 

The Parliament of the

Commonwealth of Australia

 

HOUSE OF REPRESENTATIVES

 

 

 

Minerals Resource Rent Tax Bill 2011

 

 

(1)     Clause  2-1 , page 3 (line 25) , omit “ $50 million ”, substitute “ $75 million ”.

[low profit offsets]

(2)     Clause  2-1 , page 3 (line 27) , omit “ $50 million and $100 million ”, substitute “ $75 million and $125 million ”.

[low profit offsets]

(3)     Division  45 , clauses  45-1 to 45-10 , page 43 (line 2) to page 45 (line 14) , omit the Division, substitute:

Division 45 Low profit offsets

Guide to Division 45

45-1   What this Division is about

A miner is entitled to an offset for an MRRT year if the miner’s group mining profit for the year is less than $125 million.

If that profit is less than or equal to $75 million, an offset reduces the amount of MRRT the miner must pay for the year to nil.

An offset phases out between profits of $75 million and $125 million, so that the miner is not immediately subjected to a full MRRT liability when the miner’s group profit exceeds $75 million.

Table of sections

Operative provisions

45-5          Low profit offset—profits not greater than $75 million

45-10        Low profit offset—profits greater than $75 million and less than $125 million

Operative provisions

45-5   Low profit offset—profits not greater than $75 million

             (1)  A miner has an offset for an * MRRT year if the sum of the * mining profits (the miner’s group mining profit ) for the year of each mining project interest of the following * entities is less than or equal to $75 million:

                     (a)  the miner;

                     (b)  an entity * connected with the miner;

                     (c)  an * affiliate of the miner;

                     (d)  an entity of which the miner is an affiliate;

                     (e)  an affiliate of an entity covered by paragraph (b);

                      (f)  an entity connected with an entity covered by paragraph (b), (c) or (d).

Note 1:       An offset under this section reduces the amount of MRRT that a miner must pay for an MRRT year: see section 10-15.

Note 2:       If the MRRT year is not a 12-month period, the miner’s group mining profit is affected by section 190-20 (substituted accounting periods).

             (2)  The amount of the miner’s offset for the * MRRT year is the sum of the miner’s * MRRT liabilities for each of the miner’s mining project interests for the year.

45-10   Low profit offset—profits greater than $75 million and less than $125 million

             (1)  A miner with a group mining profit greater than $75 million and less than $125 million for an * MRRT year has an offset for that year if the amount worked out using the following formula is greater than zero:

where:

miner’s group MRRT allowances is the sum of the * MRRT allowances for each mining project interest for the year that an * entity mentioned in subsection 45-5(1) has.

miner’s share of group mining profit is the sum of the miner’s * mining profit for each of its mining project interests for the year, divided by the miner’s group mining profit for the year.

taper amount is the difference between the miner’s group mining profit for the year and $50 million.

Note 1:       An offset under this section reduces the amount of MRRT that a miner must pay for an MRRT year: see section 10-15.

Note 2:       If the MRRT year is not a 12-month period, the miner’s group MRRT allowances and the miner’s share of group mining profit are affected by section 190-20 (substituted accounting periods).

             (2)  The amount of the miner’s offset for the * MRRT year is the amount worked out using the formula in subsection (1), multiplied by the * MRRT rate.

Example:    For the 2013-14 MRRT year, Pinder Mines Ltd has a total mining profit of $80 million, a group mining profit of $100 million, group MRRT allowances of $10 million and a taper amount of $50 million ($100 million - $50 million). The amount worked out using the formula in subsection (1) is $18 million: (($75 million - $50 million) - $10 million) × 4 / 5 × 3 / 2 . Multiplying this amount by the MRRT rate gives Pinder Mines Ltd an offset for the year of $4.05 million.

[low profit offsets]

(4)     Clause  190-20 , page 210 (lines 1 to 4) , omit the example, substitute:

Example:    A miner with a mining profit of $45 million for a transitional accounting period of 120 days will not have a low profit offset under section 45-5 or 45-10, because that profit is adjusted by multiplying it by 365/120, making the profit $136.88 million.

[substituted accounting periods]

(5)     Clause  190-20 , page 210 (lines 12 to 22) , omit the example, substitute:

Example:    A miner has a mining profit of $30 million, and MRRT allowances of $5 million, for a transitional accounting period of 120 days. The miner has no connected entities, or affiliates, that are miners.

                   Under subsection (1), the mining profit is adjusted to $91.25 million, and the MRRT allowances are adjusted to $15.2 million. Under subsection 45-10(1), the amount of the miner’s offset would be $6.26 million (which would exceed the miner’s MRRT liability of $5.63 million, so MRRT would not be payable).

                   However, under subsection (2) of this section, that amount is multiplied by 120/365, making the offset $2.06 million (which would reduce the miner’s MRRT liability to $3.57 million).

[substituted accounting periods]