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Thursday, 9 December 1971
Page: 4629

Dr EVERINGHAM (CAPRICORNIA, QUEENSLAND) asked the Treasurer, upon notice:

What taxation, duty, primage and other privileges and restrictions apply to one or more (a) oil and (b) rubber companies in Australia as distinct from most manufacturers.

Mr Snedden - The answer to the honourable member's question is as follows:

There are no special privileges granted to, or restrictions imposed on, rubber companies. Petroleum , exploration companies, however, are paid petroleum search subsidies for certain exploratory surveys and drilling operations. The subsidies are repayable where commercially exploitable discoveries are made. In addition, there is a number of special concessions in the Income Tax Assessment Act for petroleum exploration and mining companies, which are described, briefly, as follows:

Sections 77c and 77b-

Deductions are allowed to shareholders for capital subscriptions to petroleum exploration and mining companies.

Division 10aa-

Special deductions for capital expenditure incurred in the discovery and mining of petroleum in Australia and Papua New Guinea are allowable to a company so engaged and deriving income from the sale of that petroleum and its products. The income derived is free from tax until all allowable capital expenditure is recouped.

Section 44 -

Dividends paid wholly and exclusively out of the income thus freed from tax are exempt.

Division 10aaa -

Capital expenditure incurred on certain facilities used primarily and principally for the transport of petroleum from the well-head to a refinery or other terminal is deductible in equal annual instalments over ten years.

The abovementioned concessions are restricted to petroleum exploration and mining companies. The income tax law does not provide for any special concessions to oil refinery and marketing companies as distinct from other manufacturers.

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