PETROLEUM RESOURCE RENT TAX ASSESSMENT AMENDMENT BILL 2011

i Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

Contents

1 Short

title

...........................................................................................

2 Commencement

.................................................................................

3 Schedule(s)

........................................................................................

Schedule 1--Extension to onshore projects etc.

Petroleum Resource Rent Tax Assessment Act 1987

Schedule 2--Assessable receipts

Part 1--Amendments commencing on 1 July 2012

Petroleum Resource Rent Tax Assessment Act 1987

Part 2--Amendments commencing on Proclamation

Petroleum Resource Rent Tax Assessment Act 1987

Schedule 3--Deductible expenditure

Petroleum Resource Rent Tax Assessment Act 1987

Schedule 4--Starting base for onshore petroleum projects and

the North West Shelf project

Part 1--Main amendments

Petroleum Resource Rent Tax Assessment Act 1987

Part 2--Other amendments

Petroleum Resource Rent Tax Assessment Act 1987

Schedule 5--Consolidated groups

Part 1--Main amendments

Petroleum Resource Rent Tax Assessment Act 1987

Part 2--Other amendments

Income Tax Assessment Act 1997

Petroleum Resource Rent Tax Assessment Act 1987

Schedule 6--Other amendments

Part 1--Amendments related to clean energy package

Petroleum Resource Rent Tax Assessment Act 1987

Part 2--Amendments related to repeal of an Act

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 1

A Bill for an Act to amend the Petroleum Resource

Rent Tax Assessment Act 1987, and for other

purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Petroleum Resource Rent Tax

Assessment Amendment Act 2011.

2 Commencement

(1) Each provision of this Act specified in column 1 of the table

commences, or is taken to have commenced, in accordance with

column 2 of the table. Any other statement in column 2 has effect

according to its terms.

2 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1. Sections 1 to 3

and anything in

this Act not

elsewhere covered

by this table

The day this Act receives the Royal Assent.

2. Schedule 1,

items 1 to 10

1 July 2012.

1 July 2012

3. Schedule 1,

item 11

1 July 2012.

However, the provision(s) do not commence

at all if the Tax Laws Amendment (2011

Measures No. 8) Act 2011 receives the

Royal Assent on or before 1 July 2012.

4. Schedule 1,

items 12 to 24

1 July 2012.

1 July 2012

5. Schedule 1,

item 25

The later of:

(a) the start of 1 July 2012; and

(b) immediately after the commencement of

Schedule 2 to the Tax Laws Amendment

(2011 Measures No. 8) Act 2011.

However, the provision(s) do not commence

at all if the event mentioned in paragraph (b)

does not occur.

6. Schedule 1,

items 26 to 46

1 July 2012.

1 July 2012

7. Schedule 2,

Part 1

1 July 2012.

1 July 2012

8. Schedule 2,

Part 2

A single day to be fixed by Proclamation.

However, if the provision(s) do not

commence within the period of 6 months

beginning on the day this Act receives the

Royal Assent, they commence on the day

after the end of that period.

9. Schedules 3

and 4

1 July 2012.

1 July 2012

10. Schedule 5,

item 1

1 July 2012.

1 July 2012

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 3

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

11. Schedule 5,

items 2 to 5

The later of:

(a) immediately after the commencement of

the provision(s) covered by table item 2;

and

(b) immediately after the commencement of

Schedule 3 to the Minerals Resource

Rent Tax (Consequential Amendments

and Transitional Provisions) Act 2011.

However, the provision(s) do not commence

at all if the event mentioned in paragraph (b)

does not occur.

12. Schedule 5,

items 6 to 12

1 July 2012.

1 July 2012

13. Schedule 6,

Part 1

The later of:

(a) immediately after the commencement of

the provision(s) covered by table item 2;

and

(b) immediately after the commencement of

section 3 of the Clean Energy Act 2011.

However, the provision(s) do not commence

at all if the event mentioned in paragraph (b)

does not occur.

14. Schedule 6,

Parts 2 and 3

1 July 2012.

1 July 2012

Note:

This table relates only to the provisions of this Act as originally

enacted. It will not be amended to deal with any later amendments of

this Act.

(2) Any information in column 3 of the table is not part of this Act.

Information may be inserted in this column, or information in it

may be edited, in any published version of this Act.

3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or

repealed as set out in the applicable items in the Schedule

concerned, and any other item in a Schedule to this Act has effect

according to its terms.

Schedule 1 Extension to onshore projects etc.

4 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

Schedule 1--Extension to onshore projects

etc.

Petroleum Resource Rent Tax Assessment Act 1987

1 Section 2 (definition of access authority)

Repeal the definition, substitute:

access authority means:

(a) a petroleum access authority within the meaning of the

Offshore Petroleum and Greenhouse Gas Storage Act 2006;

(b) an authority or right (however described) under another

Australian law to carry on, in relation to petroleum, specified

operations in a specified area (other than an authority or right

that is an exploration permit, retention lease, production

licence or infrastructure licence).

Note:

The Resources Minister may determine that an authority or right

is, or is not, an authority or right of a kind mentioned in this

paragraph: see section 2AA.

2 Section 2 (paragraph (a) of the definition of applicable

commencement date)

After "(b)", insert "or (c)".

3 Section 2 (at the end of the definition of applicable

commencement date)

Add:

; or (c) if the project is an onshore petroleum project or the North

West Shelf project, or if an onshore petroleum project is a

pre-combination project in relation to the project--1 July

2012.

4 Section 2 (definition of block)

Repeal the definition, substitute:

block means:

Extension to onshore projects etc. Schedule 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 5

(a) in relation to an offshore area--a block within the meaning

of the Offshore Petroleum and Greenhouse Gas Storage Act

2006; or

(b) in relation to an onshore area--an area (however described)

referred to in another Australian law relating to exploration

for, or recovery of, petroleum.

5 Section 2 (definition of eligible production licence)

Repeal the definition.

6 Section 2 (definition of excluded fee)

Repeal the definition, substitute:

excluded fee means:

(a) 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; or

(b) a similar amount payable, under another Australian law, in

relation to the grant of an exploration permit, retention lease

or production licence.

7 Section 2 (definition of exploration permit)

Repeal the definition, substitute:

exploration permit means:

(a) a petroleum exploration permit within the meaning of the

Offshore Petroleum and Greenhouse Gas Storage Act 2006;

(b) an authority or right (however described) under another

Australian law:

(i) to explore for petroleum in an area; or

(ii) to recover petroleum on an appraisal basis in that area;

(iii) to carry on such operations, and execute such works, in

the area as are necessary for those purposes;

that is not an authority or right to recover petroleum other

than on an appraisal basis.

Schedule 1 Extension to onshore projects etc.

6 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

Note:

The Resources Minister may determine that an authority or right

is, or is not, an authority or right of a kind mentioned in this

paragraph: see section 2AA.

8 Section 2 (definition of exploration permit area)

Repeal the definition, substitute:

exploration permit area means:

(a) a petroleum exploration permit area within the meaning of

the Offshore Petroleum and Greenhouse Gas Storage Act

2006; or

(b) the area covered by an authority or right mentioned in

paragraph (b) of the definition of exploration permit.

9 Section 2 (definition of holder of a registered interest)

Repeal the definition, substitute:

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:

(a) an entry has been made under subsection 494(3) of the

Offshore Petroleum and Greenhouse Gas Storage Act 2006;

(b) an entry has been made in a register mentioned in

paragraph (b) of the definition of registered holder.

10 Section 2 (definition of infrastructure licence)

Repeal the definition, substitute:

infrastructure licence means:

(a) an infrastructure licence within the meaning of section 7 of

the Offshore Petroleum and Greenhouse Gas Storage Act

2006; or

(b) an authority or right (however described) under another

Australian law to construct and operate facilities in a

specified area for engaging in any of the following activities

(other than an authority or right that is an exploration permit,

retention lease, production licence or pipeline licence):

(i) remote control of facilities, structures or installations

used to recover petroleum in a production licence area;

Extension to onshore projects etc. Schedule 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 7

(ii) processing petroleum recovered in any place, including

converting petroleum into another form by physical or

chemical means, or both, and partial processing of

petroleum;

(iii) storing petroleum before it is transported to another

place;

(iv) preparing petroleum for transport to another place (for

example, pumping or compressing);

(v) activities related to any of the above.

Note:

The Resources Minister may determine that an authority or right

is, or is not, an authority or right of a kind mentioned in this

paragraph: see section 2AA.

11 Section 2 (after paragraph (e) of the definition of

marketable petroleum commodity)

Insert:

(ea)

shale

oil;

12 Section 2

Insert:

North West Shelf project means the petroleum project referred to

in subsection 19(1B).

13 Section 2

Insert:

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.

14 Section 2

Insert:

onshore area, in relation to a State or Territory, means the area of

the State or Territory that is not part of that State's or Territory's

offshore area within the meaning of the Offshore Petroleum and

Greenhouse Gas Storage Act 2006 and is not within the Joint

Petroleum Development Area within the meaning of that Act.

15 Section 2

Schedule 1 Extension to onshore projects etc.

8 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

Insert:

onshore petroleum project means a petroleum project for which:

(a) no part of the production licence area is a petroleum

production licence area within the meaning of the Offshore

Petroleum and Greenhouse Gas Storage Act 2006; and

(b) no part of the production licence area is an area within the

Joint Petroleum Development Area within the meaning of

that Act.

16 Section 2 (definition of petroleum)

Repeal the definition, substitute:

petroleum means:

(a) petroleum within the meaning of the Offshore Petroleum and

Greenhouse Gas Storage Act 2006; or

(b)

oil

shale.

However, petroleum does not include a taxable resource within the

meaning of the Minerals Resource Rent Tax Act 2011.

17 Section 2 (definition of pipeline licence)

Repeal the definition, substitute:

pipeline licence means:

(a) a pipeline licence within the meaning of the Offshore

Petroleum and Greenhouse Gas Storage Act 2006; or

(b) an authority or right (however described) under another

Australian law:

(i) to construct a pipeline in a specified area in accordance

with any specified conditions; and

(ii) to construct in that area specified pumping stations, tank

stations and valve stations at specified positions; and

(iii) to operate that pipeline and those pumping stations, tank

stations and valve stations; and

(iv) to carry on such operations, to execute such works and

to do all such other things in that area as are necessary

for, or incidental to, the construction or operation of that

pipeline and those pumping stations, tank stations and

valve stations.

Extension to onshore projects etc. Schedule 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 9

Note:

The Resources Minister may determine that an authority or right

is, or is not, an authority or right of a kind mentioned in this

paragraph: see section 2AA.

18 Section 2 (paragraph (a) of the definition of

pre-combination project)

Omit "eligible".

19 Section 2 (at the end of the definition of production

licence)

Add:

; or (c) an authority or right (however described) under another

Australian law to undertake activities for the recovery of

petroleum from an area (other than an authority or right that

is an exploration permit or a retention lease).

Note:

The Resources Minister may determine that an authority or right

is, or is not, an authority or right of a kind mentioned in this

paragraph: see section 2AA.

20 Section 2 (definition of production licence area)

Repeal the definition, substitute:

production licence area means the following:

(a) a petroleum production licence area within the meaning of

the Offshore Petroleum and Greenhouse Gas Storage Act

2006;

(b) the area covered by an authority or right mentioned in

paragraph (c) of the definition of production licence;

and, in relation to the Greater Sunrise project, includes the Western

Greater Sunrise area.

21 Section 2 (definition of registered holder)

Repeal the definition, substitute:

registered holder means:

(a) in relation to a title under the Offshore Petroleum and

Greenhouse Gas Storage Act 2006--the registered holder

within the meaning of that Act; and

(b) in relation to an authority or right (however described) under

another Australian law--the person whose name is shown in

Schedule 1 Extension to onshore projects etc.

10 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

the register (however described) kept under the relevant

Australian law concerned.

22 Section 2 (definition of retention lease)

Repeal the definition, substitute:

retention lease means:

(a) a petroleum retention lease within the meaning of the

Offshore Petroleum and Greenhouse Gas Storage Act 2006;

(b) an authority or right (however described) under another

Australian law:

(i) to explore for petroleum in an area; or

(ii) to recover petroleum on an appraisal basis in that area;

(iii) to carry on such operations, and execute such works, in

the area as are necessary for those purposes;

that is not an authority or right to recover petroleum other

than on an appraisal basis, and that is granted on the basis

that the area contains petroleum and that recovery of that

petroleum is likely to become commercially viable in the

future.

Note:

The Resources Minister may determine that an authority or right

is, or is not, an authority or right of a kind mentioned in this

paragraph: see section 2AA.

23 Section 2 (definition of retention lease area)

Repeal the definition, substitute:

retention lease area means:

(a) a petroleum retention lease area within the meaning of the

Offshore Petroleum and Greenhouse Gas Storage Act 2006;

(b) the area covered by an authority or right mentioned in

paragraph (b) of the definition of retention lease.

24 After section 2

Insert:

Extension to onshore projects etc. Schedule 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 11

2AA Determinations relating to certain defined terms

(1) An authority or right under an Australian law is taken, for the

purposes of this Act, to be an authority or right mentioned in one of

the paragraphs to which this section applies if the Resources

Minister determines, by legislative instrument, that it is an

authority or right of that kind.

(2) An authority or right under an Australian law is taken, for the

purposes of this Act, not to be an authority or right mentioned in

one of the paragraphs to which this section applies if the Resources

Minister determines, by legislative instrument, that it is not an

authority or right of that kind.

(3) This section applies to the following paragraphs in section 2:

(a) paragraph (b) of the definition of access authority;

(b) paragraph (b) of the definition of exploration permit;

(d) paragraph (b) of the definition of pipeline licence;

(e) paragraph (c) of the definition of production licence;

(f) paragraph (b) of the definition of retention lease.

25 After paragraph 2E(2)(e)

Insert:

(ea)

shale

oil;

26 Subsection 19(1)

After "(1A)", insert "and (1B)".

27 Subsection 19(1)

Omit "an eligible", substitute "a".

28 Subsection 19(1)

Omit "eligible" (second occurring).

29 After subsection 19(1A)

Insert:

(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

Schedule 1 Extension to onshore projects etc.

12 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

North West Shelf exploration permits and that are in force from

time to time.

30 Subsection 19(2)

Omit "eligible" (wherever occurring).

31 Paragraph 19(2B)(a)

Omit "an eligible", substitute "a".

32 Paragraph 19(2B)(b)

Omit "eligible".

33 Paragraph 19(2C)(a)

Omit "an eligible", substitute "a".

34 Paragraph 19(2C)(b)

Omit "eligible".

35 Subsection 19(3)

Omit "eligible" (wherever occurring).

36 Subsection 20(1)

Repeal the subsection, substitute:

(1) Subject to this section, where within the qualifying period in

relation to a production licence in relation to a petroleum project,

the Resources Minister, whether on application, request or

otherwise, 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

projects--the respective operations, facilities and other things

that are involved, have been involved or will be involved in

any further processing or treating of any petroleum or

Extension to onshore projects etc. Schedule 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 13

marketable petroleum commodity produced in relation to the

projects; and

(d) to the extent (if any) that the projects are not onshore

petroleum projects--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.

(1A) Despite subsection (1), the Minister cannot specify, under that

subsection:

(a) a production licence relating to the North West Shelf project;

(b) if one of the projects is not an onshore petroleum project--a

production licence relating to:

(i) an onshore petroleum project existing on 30 June 2012;

(ii) if a pre-combination project in relation to a combined

project is such a project--the combined project.

37 Subsection 20(2)

Omit "eligible" (first occurring).

38 Paragraph 20(2)(a)

Repeal the paragraph, substitute:

(a) the period of 90 days after the latest of the following:

(i) the time the licence comes into force;

(ii) the commencement of this Act;

(iii) if the licence relates to an onshore petroleum project--

the start of 1 January 2013; or

39 Paragraph 20(2)(b)

Omit "eligible".

40 Subsection 20(4)

After "sale of" insert "petroleum or".

Schedule 1 Extension to onshore projects etc.

14 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

41 Subsections 20(6) and (7)

Omit "eligible" (wherever occurring).

42 Clause 1 of the Schedule (paragraph (a) of the definition of

starting day)

Omit "or the Bass Strait project", substitute ", the Bass Strait project or

the North West Shelf project".

43 Clause 1 of the Schedule (after paragraph (c) of the

definition of starting day)

Insert:

(ca) in relation to the North West Shelf project--the earlier of the

day on which the exploration permit known as WA-1-P was

granted and the day on which the exploration permit known

as WA-28-P was granted; or

44 Subclause 13(1) of the Schedule

Omit "subclauses (2) and (3)", substitute "subclause (2)".

45 Subclause 13(3) of the Schedule

Repeal the subclause.

46 Transitional

Division 2 of Part VIII of the Petroleum Resource Rent Tax Assessment

Act 1987 (collection by instalments) does not apply, in respect of the

year of tax commencing on 1 July 2012, in relation to an onshore

petroleum project or the North West Shelf project.

Assessable receipts Schedule 2

Amendments commencing on 1 July 2012 Part 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 15

Schedule 2--Assessable receipts

Part 1--Amendments commencing on 1 July 2012

Petroleum Resource Rent Tax Assessment Act 1987

1 At the end of subsection 23(1)

Add:

; (f) assessable incidental production receipts.

2 Subsection 23(2)

Omit "(e)", substitute "(f)".

3 Section 28

Before "For", insert "(1)".

4 At the end of section 28

Add:

(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 2011.

5 After section 29

Insert:

29A Assessable incidental production receipts

(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

Schedule 2 Assessable receipts

Part 1 Amendments commencing on 1 July 2012

16 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

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

and

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: The following are some examples:

(a) water from a water treatment facility that is an integral part of a

coal seam gas project is sold;

(b) excess electricity that is produced as part of the petroleum project

is sold.

(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.

6 Paragraph 30(a)

Omit "or assessable employee amenities receipts", substitute ",

assessable employee amenities receipts or assessable incidental

production receipts".

7 At the end of paragraphs 31(b) and (c)

Add "or".

8 After paragraph 31(e)

Insert:

; or (ea) assessable incidental production receipts;

9 Paragraph 31(f)

Omit "except in the case of the Bass Strait Project", substitute "unless

paragraph (g) or (h) applies".

10 At the end of section 31

Add:

; or (h) in the case of an onshore petroleum project or the North West

Shelf project--at any time on or after 1 July 2012, including

Assessable receipts Schedule 2

Amendments commencing on 1 July 2012 Part 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 17

a time before the project commenced or after the project has

ceased.

11 At the end of Division 2 of Part V

Add:

31AA Eligible real expenditure--onshore petroleum projects and

the North West Shelf project

Despite section 45, this Division applies in relation to:

(a) an onshore petroleum project; or

(b) the North West Shelf project; or

a pre-combination project;

as if eligible real expenditure could be incurred in relation to such a

project at any time, including a time before 1 July 2012.

12 Paragraphs 57(1)(a) and (2)(a)

Omit "24, 25, 27, 28 or 29", substitute "23".

13 Transitional

(1)

For the purposes of applying section 31 of the Petroleum Resource Rent

Tax Assessment Act 1987 to an onshore petroleum project or the North

West Shelf project, treat any receipts:

(a) of a kind referred to in that section; and

(b) derived before 1 July 2012 in relation to activities undertaken

in relation to the project on or after that day;

as having been derived in the financial year in which the activities are

undertaken.

(2)

For the purposes of applying subparagraph 28(b)(ii) of the Petroleum

Resource Rent Tax Assessment Act 1987 in relation to an onshore

petroleum project or the North West Shelf project, disregard any

receipts:

(a) of a kind referred to in that subparagraph; and

(b) that relate to resource tax expenditure incurred in relation to

the project before 1 July 2012.

Schedule 2 Assessable receipts

Part 2 Amendments commencing on Proclamation

18 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

Part 2--Amendments commencing on Proclamation

Petroleum Resource Rent Tax Assessment Act 1987

14 Paragraph 24(1)(a)

After "any petroleum" insert "(other than project natural gas (within the

meaning of the regulations) to which paragraph (f) applies)".

15 Subparagraph 24(1)(d)(ii)

Repeal the subparagraph.

16 At the end of subsection 24(1)

Add:

; and (f) where:

(i) any project natural gas (within the meaning of the

regulations) recovered from the project is or has been

sold; and

(ii) the regulations apply to the project natural gas;

the amount worked out in accordance with the regulations.

Deductible expenditure Schedule 3

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 19

Schedule 3--Deductible expenditure

Petroleum Resource Rent Tax Assessment Act 1987

1 Section 2

Insert:

Aboriginal person has the meaning given by subsection 4(1) of the

Aboriginal and Torres Strait Islander Act 2005.

2 Section 2

Insert:

Australian law has the meaning given by subsection 995-1(1) of

the Income Tax Assessment Act 1997.

3 Section 2 (definition of eligible real expenditure)

After "general project expenditure", insert ", resource tax expenditure".

4 Section 2

Insert:

production licence notice, in relation to a petroleum project,

means:

(a) a notice issued under subsection 258(7) of the Offshore

Petroleum and Greenhouse Gas Storage Act 2006 in relation

to the project; or

(b) a notice issued by a State or Territory authority that specifies

the day that sufficient information has been provided to

determine the application for the production licence in

relation to the project.

5 Section 2

Insert:

Torres Strait Islander has the meaning given by subsection 4(1) of

the Aboriginal and Torres Strait Islander Act 2005.

6 At the end of paragraph 19(4)(b)

Add:

Schedule 3 Deductible expenditure

20 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

; (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.

7 After paragraph 32(f)

Insert:

(fa)

resource

tax

expenditure;

8 Subsection 33(1)

Omit "or the Bass Strait project", substitute ", the Bass Strait project or

the North West Shelf project".

9 Subsection 34(1)

Omit "or the Bass Strait project", substitute ", the Bass Strait project or

the North West Shelf project".

10 Subsection 34A(1)

Omit "or the Bass Strait project", substitute ", the Bass Strait project or

the North West Shelf project".

11 Paragraph 34A(1)(a)

Repeal the paragraph, substitute:

(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

12 Subsection 34A(3)

After "Bass Strait project", insert "or the North West Shelf project".

13 Subsection 35(1)

Omit "or the Bass Strait project", substitute ", the Bass Strait project or

the North West Shelf project".

Deductible expenditure Schedule 3

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 21

14 After section 35B

Insert:

35C Resource tax expenditure

(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.

(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

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.

(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

Schedule 3 Deductible expenditure

22 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

(i) the expenditure is a royalty, or would be a royalty if the

petroleum were owned by the Commonwealth, or a

State or Territory, 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.

(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 2011.

(5) For the purposes of subsection (1), (2) or (3), 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;

(d) the class 1 GDP factor expenditure;

(e) the class 2 augmented bond rate 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.

Deductible expenditure Schedule 3

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 23

available excess means so much of the excess as does not exceed

the resource tax expenditure incurred in the assessable year.

(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.

15 Subparagraph 37(1)(b)(vi)

Omit "and".

16 At the end of paragraph 37(1)(b)

Add:

(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

17 Section 44

Before "For", insert "(1)".

18 At the end of section 44

Add:

(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;

(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

Schedule 3 Deductible expenditure

24 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

rights of Aboriginal persons or Torres Strait Islanders in

relation to land or waters.

19 After paragraph 58B(1)(a)

Insert:

(aa) if the election was made by the person within 30 days after

the commencement of Schedule 1 to the Petroleum Resource

Rent Tax Assessment Amendment Act 2011--1 July 2012; or

20 Clause 1 of the Schedule (definition of relevant

pre-commencement day)

Repeal the definition, substitute:

relevant pre-commencement day, in relation to a petroleum

project, means:

(a) if the petroleum project is not a combined project, the Bass

Strait project or the North West Shelf project--the day

occurring 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; or

(b) if the petroleum project is a combined project, the Bass Strait

project or the North West Shelf project--the day occurring 5

years before the earlier of the following:

(i) the earliest day specified in a production licence notice

in relation to a pre-combination project in relation to the

project;

(ii) the earliest day a production licence was issued in

relation to a pre-combination project in relation to the

project.

Starting base for onshore petroleum projects and the North West Shelf project

Schedule 4

Main amendments Part 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 25

Schedule 4--Starting base for onshore

petroleum projects and the North West

Shelf project

Part 1--Main amendments

Petroleum Resource Rent Tax Assessment Act 1987

1 Section 2 (at the end of the definition of assessment)

Add:

Note:

Under clause 23 of Schedule 2, assessments may also be made for

starting base purposes.

2 Section 2 (definition of eligible real expenditure)

Before "or closing-down expenditure", insert ", acquired exploration

expenditure, starting base expenditure".

3 Section 2

Insert:

starting base amount has the meaning given by Division 1 of

Part 3 of Schedule 2.

4 Section 2

Insert:

starting base asset has the meaning given by clause 10 of

Schedule 2.

5 Section 2

Insert:

value, of a starting base asset, means:

(a) if, under Part 2 of Schedule 2, the book value approach is the

valuation approach for the interest, in a petroleum project, to

which the asset relates--the book value of the asset, worked

out under Division 3 of Part 3 of that Schedule; or

(b) if, under Part 2 of Schedule 2, the market value approach is

the valuation approach for the interest, in a petroleum project,

Schedule 4 Starting base for onshore petroleum projects and the North West Shelf

project

Part 1 Main amendments

26 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

to which the asset relates--the market value of the asset,

worked out under Division 3 of Part 3 of that Schedule.

6 Section 31

Before "For the purposes of", insert "(1)".

7 At the end of section 31

Add:

(2) Despite paragraph (1)(h), an assessable receipt that is an assessable

receipt because of clause 21 of Schedule 2 may be derived at any

time, including a time before the project commences or after the

project ceases.

8 Before paragraph 32(g)

Insert:

(fb) acquired exploration expenditure;

(fc) starting base expenditure;

9 Subsection 34A(5) (at the end of the definition of class 2

general project expenditure)

Add "(other than acquired exploration expenditure or starting base

expenditure)".

10 Before section 36

Insert:

35D Acquired exploration expenditure

(1) For the purposes of this Act, a reference to the acquired exploration

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 financial year commencing on 1 July

2009--the person's acquired exploration expenditure amount

in relation to the project, under clause 19 of Schedule 2; or

(b) in relation to any subsequent financial year--any amount that

is taken by subsection (3) or (4) or Division 5 to be acquired

exploration expenditure incurred by the person in relation to

the project in the financial year.

Starting base for onshore petroleum projects and the North West Shelf project

Schedule 4

Main amendments Part 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 27

(2) For the purposes of this Act, a reference to the acquired exploration

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 (4) or

Division 5 to be acquired exploration 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 acquired exploration expenditure; or

(ii) any amount that is taken by subsection (3) or (4) or

Division 5 to be acquired exploration expenditure;

incurred by the person in relation to the pre-combination

projects in relation to the project in the financial year.

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

(a) the sum of:

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

and

(ii) the class 1 augmented bond rate exploration

expenditure; and

(iii) the class 2 augmented bond rate general expenditure;

and

(iv) the class 1 GDP factor expenditure; and

(v) the class 2 augmented bond rate exploration

expenditure; and

(vi) the class 2 GDP factor expenditure; and

(vii) the resource tax expenditure; and

(viii) the acquired exploration 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; and

(b) the next financial year starts not later than 5 years after

2 May 2010;

the person is taken to incur, in relation to the project and on the

first day of the next financial year, an amount of acquired

exploration expenditure worked out in accordance with the

formula:

Available excess

Augmented bond rate

�

Schedule 4

Starting base for onshore petroleum projects and the North West Shelf

project

Part 1

Main amendments

28 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

where:

augmented bond rate means the long term bond rate in relation to

the assessable year plus 1.15.

available excess means so much of the excess as does not exceed

the acquired exploration expenditure incurred in the assessable

year.

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

(a) the sum of:

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

and

(ii) the class 1 augmented bond rate exploration

expenditure; and

(iii) the class 2 augmented bond rate general expenditure;

and

(iv) the class 1 GDP factor expenditure; and

(v) the class 2 augmented bond rate exploration

expenditure; and

(vi) the class 2 GDP factor expenditure; and

(vii) the resource tax expenditure; and

(viii) the acquired exploration 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; and

(b) the next financial year starts later than 5 years after 2 May

2010;

the person is taken to incur, in relation to the project and on the

first day of the next financial year, an amount of acquired

exploration 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.

Starting base for onshore petroleum projects and the North West Shelf project

Schedule 4

Main amendments Part 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 29

available excess means so much of the excess as does not exceed

the acquired exploration expenditure incurred in the assessable

year.

35E Starting base expenditure

(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:

(i) if the look-back approach is not the valuation approach

for the person's interest in the project under Part 2 of

Schedule 2--the person's starting base amount in

relation to the interest; or

(ii) if subparagraph (i) does not apply--an amount included

in the person's starting base expenditure in relation to

the project under clause 18 of Schedule 2; 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.

Note: For

starting base amounts, see Division 1 of Part 3 of Schedule 2.

(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.

(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

Schedule 4

Starting base for onshore petroleum projects and the North West Shelf

project

Part 1

Main amendments

30 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

(d) the class 1 GDP factor expenditure; and

(e) the class 2 augmented bond rate exploration expenditure; and

(f) the class 2 GDP factor expenditure; and

(g) the resource tax expenditure; and

(h) the acquired exploration expenditure; and

(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.

(4) The reference in paragraph (1)(a) to the starting base financial year

for a petroleum project is a reference to:

(a) if the look-back approach is not the valuation approach for

the person's interest in the project under Part 2 of

Schedule 2--the earliest financial year, after 30 June 2012, in

which a production licence relating to the project is in

existence; or

(b) if paragraph (a) of this subsection does not apply--the

financial year commencing on 1 July 2009.

11 Section 45

Repeal the section, substitute:

Starting base for onshore petroleum projects and the North West Shelf project

Schedule 4

Main amendments Part 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 31

45 Time of incurring of expenditure

Petroleum projects generally

(1) For the purposes of this Act, eligible real expenditure may be

incurred by a person in relation to a petroleum project (other than

an onshore petroleum project, 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.

Onshore petroleum projects

(2) For the purposes of this Act, eligible real expenditure may be

incurred by a person in relation to an onshore petroleum project:

(a) if the project, or the exploration permit or retention lease

from which the production licence to which the project

relates is derived, came into existence before 2 May 2010--

at any time on or after the starting base day under

subsection (5) for the person's interest in the project,

including a time before the project commences or after the

project ceases; or

(b) if the project, or the exploration permit or retention lease

from which the production licence to which the project

relates is derived, came into existence on or after 2 May

2010--at any time on or after 2 May 2010, including a time

before the project commences or after the project ceases.

The Bass Strait project

(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

(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 the starting base day under subsection (5) for

the person's interest in the project, including a time after the

project ceases.

Schedule 4

Starting base for onshore petroleum projects and the North West Shelf

project

Part 1

Main amendments

32 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

Starting base days

(5) For the purposes of paragraph (2)(a) or subsection (4), the starting

base day for a person's interest in an onshore petroleum project, or

in the North West Shelf project, is:

Starting base days

Item

If ...

The starting base day is ...

the look-back approach is not the valuation

approach for the interest that the person

holds in the project

1 July 2012

(a) the look-back approach is the valuation

approach for the interest; and

(b) the person who held the interest at the

start of 2 May 2010 had first acquired

the interest, or (being a company) had

been acquired, on or after 1 July 2007

the day on which that

acquisition occurred

(a) the look-back approach is the valuation

approach for the interest; and

(b) item 2 does not apply

1 July 2002

Note:

Eligible real expenditure incurred before 1 July 2012 in relation to an

onshore petroleum project that came into existence before 2 May

2010, or in relation to the North West Shelf project, is taken into

account in a person's starting base amount under Schedule 2, if the

look-back approach does not apply to the person's interest in the

project.

(6) For the purposes of subsection (5), a person holding an interest in

an onshore petroleum project or the North West Shelf project is

taken:

(a) to have acquired the interest if, and when, the person is taken

to have acquired that interest for the purposes of clause 18 of

Schedule 2; and

(b) (not being an individual) to have been acquired if, and when,

the person is taken to have been acquired for the purposes of

that clause.

Starting base for onshore petroleum projects and the North West Shelf project

Schedule 4

Main amendments Part 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 33

Resource tax expenditure

(7) Despite subsections (1), (2), (3) and (4), resource tax expenditure

cannot be incurred by a person, in relation to a petroleum project,

before 1 July 2012.

12 After subparagraph 48(1)(a)(ia)

Insert:

(ib) if section 35E does not apply in relation to the financial

year in which the transaction is or was entered into, and

the look-back approach is not the valuation approach for

vendor's interest in the project under Part 2 of

Schedule 2--to have incurred starting base expenditure,

in relation to the project, of the starting base amount in

relation to the vendor's interest; and

13 After subsection 48(2)

Insert:

(2A) Expenditure that the purchaser, or a purchaser, is taken to have

incurred by subparagraph (1)(a)(ib) is taken to have been so

incurred in the first financial year in relation to which section 35E

applies in relation to the project.

14 After paragraph 48A(5)(c)

Insert:

(ca)

if:

(i) section 35E does not apply in relation to the transfer

year; and

(ii) the look-back approach is not the valuation approach for

vendor's interest in the project under Part 2 of

Schedule 2;

to have incurred starting base expenditure, in relation to the

project, of the transfer percentage of the starting base amount

in relation to the vendor's interest; and

15 After subsection 48A(7)

Insert:

Schedule 4

Starting base for onshore petroleum projects and the North West Shelf

project

Part 1

Main amendments

34 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

Time when purchaser taken to have incurred expenditure to which

paragraph (5)(ca) applies

(7A) Expenditure that the purchaser, or any of the purchasers, is taken

by paragraph (5)(ca) to have incurred is taken to have been so

incurred in the first financial year in relation to which section 35E

applies in relation to the project.

16 At the end of the Act

Add:

Schedule 2--Starting base for onshore

petroleum projects and the North

West Shelf project

Note:

See sections 35D and 35E.

Part 1--Preliminary

1 Object of this Schedule

The object of this Schedule is to recognise the value, when

resource tax reforms were announced on 2 May 2010, of:

(a) onshore petroleum projects; and

(b) the North West Shelf project;

by allowing certain amounts to be included in the deductible

expenditure for the projects.

2 Definitions

In this Schedule:

accounting standard has the same meaning as in the Corporations

Act 2001.

arrangement has the meaning given by subsection 995-1(1) of the

Income Tax Assessment Act 1997.

auditing standard has the same meaning as in the Corporations

Act 2001.

Starting base for onshore petroleum projects and the North West Shelf project

Schedule 4

Main amendments Part 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 35

CGT asset has the meaning given by subsection 995-1(1) of the

Income Tax Assessment Act 1997.

cost base has the meaning given by subsection 995-1(1) of the

Income Tax Assessment Act 1997.

depreciating asset has the meaning given by subsection 995-1(1)

of the Income Tax Assessment Act 1997.

entity has the meaning given by subsection 995-1(1) of the Income

Tax Assessment Act 1997.

hold, in relation to a starting base asset, has the meaning given by

clause 11.

interim expenditure, in relation to a person's starting base asset

relating to a petroleum project, has the meaning given by

clause 15.

market value has a meaning affected by Subdivision 960-S of the

Income Tax Assessment Act 1997.

mining, quarrying or prospecting information has the meaning

given by subsection 995-1(1) of the Income Tax Assessment Act

1997.

project activity: a thing done is a project activity in relation to a

petroleum project if it is done in carrying on or providing the

operations, facilities and other things (including services and

amenities) of a kind referred to in section 37 or 38 in relation to the

project.

starting base return means a return of the kind referred to in

clause 22, that complies with all the requirements of that clause

and section 388-75 in Schedule 1 to the Taxation Administration

Act 1953.

Part 2--Choosing a valuation approach

3 Choosing a valuation approach

(1) A person may choose the valuation approach for:

Schedule 4

Starting base for onshore petroleum projects and the North West Shelf

project

Part 1

Main amendments

36 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

(a) an interest that, on 30 June 2013, the person holds in an

onshore petroleum project or the North West Shelf project; or

(b) an interest that the person may in the future hold in such a

project, if the project:

(i) does not exist at the time the person makes the choice;

and

(ii) would, if it later came into existence, be derived from an

exploration permit or retention lease in which the person

held an interest at that time.

(2) The choice is not valid unless the person gives to the

Commissioner a valid starting base return.

(3) The choice must specify whether the person has chosen:

(a) the book value approach; or

(b) the market value approach; or

Note 1:

The book value approach and the market value approach affect a

person's starting base amount under Part 3, through the valuation of

starting base assets under Division 3 of that Part and the way in which

interim expenditure is taken into account under Division 4 of that Part.

Note 2:

There is no starting base amount if the look-back approach applies,

but expenditure incurred before 1 July 2012 may be eligible real

expenditure: see subsections 45(2), (4) and (5).

(4) The choice is irrevocable after:

(a) 30 August 2013; or

(b) if, under paragraph 22(2)(c), the Commissioner allows

further time for the person to give a starting base return--

after that time elapses.

(5) The choice applies to:

(a) the year of tax commencing on 1 July 2012; and

(b) all later years of tax.

Note:

Making a choice obliges the person to give to the Commissioner a

starting base return under clause 22.

4 Restriction on specifying the book value approach

(1) The choice cannot specify the book value approach unless:

(a) during the 18 months preceding 2 May 2010, a person who

held in that period:

Starting base for onshore petroleum projects and the North West Shelf project

Schedule 4

Main amendments Part 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 37

(i) the interest in the onshore petroleum project or the

North West Shelf project; or

(ii) if that interest did not exist in that period--an interest in

the exploration permit or retention lease mentioned in

subparagraph 3(1)(b)(ii);

prepared a financial report relating to the interest in

accordance with accounting standards; and

(b) the report relates to a financial period that ended in the 18

months preceding 2 May 2010; and

standards.

(2) If, during the 18 months preceding 2 May 2010, the person was a

part of a consolidated entity (within the meaning of the

Corporations Act 2001), for the purposes of paragraph (1)(a), treat

any financial report for the consolidated entity, relating to the

interest, as a report that the person prepared.

5 The valuation approach for starting base assets

The valuation approach for an interest in an onshore petroleum

project or the North West Shelf project is the approach specified in

a choice under clause 3 relating to:

(a) the interest; or

(b) an interest in an exploration permit or retention lease from

which the interest is derived.

Part 3--Starting base amounts

Division 1--Starting base amounts

6 When a person has a starting base amount

A person has a starting base amount in relation to an interest in a

petroleum project if:

(a) the project is an onshore petroleum project or is the North

West Shelf project; and

(b) the person holds the interest; and

(c)

either:

Schedule 4

Starting base for onshore petroleum projects and the North West Shelf

project

Part 1

Main amendments

38 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

(i) the production licence relating to the project existed at

the start of 1 July 2012; or

(ii) there existed at that time an exploration permit, or a

retention lease, from which is derived the production

licence to which the project relates; and

(d) the look-back approach is not the valuation approach for the

interest under Part 2; and

(e) there are one or more starting base assets relating to the

interest.

Note:

In order for a starting base asset to relate to an interest in a petroleum

project, the production licence relating to the project, or the retention

lease or exploration permit from which it is derived, must have existed

just before 2 May 2010: see clause 10.

7 The amount of the starting base amount

(1) If, under Part 2, the book value approach is the valuation approach

for an interest in an onshore petroleum project or the North West

Shelf project, the amount of the starting base amount relating to the

interest is the sum of:

(a) the book values, worked out under Division 3, of all the

starting base assets, relating to the interest, to which

subclause (3) applies; and

(b) the adjusted interim expenditure amounts relating to the

interest, worked out under clause 16.

(2) If, under Part 2, the market value approach is the valuation

approach for an interest in an onshore petroleum project or the

North West Shelf project, the amount of the starting base amount

relating to the interest is the sum of:

(a) unless clause 8 applies--the market values, worked out under

Division 3, of all the starting base assets, relating to the

interest, to which subclause (3) applies; and

(b) if clause 8 applies--the amount worked out under subclause

8(2); and

interest.

(3) This subclause applies to a starting base asset if, at all times

between 2 May 2010 and 30 June 2012, the person holding the

asset simultaneously held:

Starting base for onshore petroleum projects and the North West Shelf project

Schedule 4

Main amendments Part 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 39

(a) the interest in the project; or

(b) if, for some or all of that period, the project did not exist--an

interest in a retention lease, or in an exploration permit, from

which the project is derived.

Note:

This subsection allows for a transfer of the starting base asset between

2 May 2010 and 30 June 2012, if it matches a transfer of the interest.

8 Alternative valuation method for coal seam gas projects

(1) This clause applies if:

(a) under Part 2, the market value approach is the valuation

approach for an interest in an onshore petroleum project; and

(b) the project includes a known reserve of coal seam gas; and

(c)

either:

(i) the interest, or another interest in the project, was

acquired, by any person, between 1 July 2007 and

2 May 2010; or

(ii) a company that held the interest, or another interest in

the project, was acquired, by any person, between 1 July

2007 and 2 May 2010; and

(d) the person who chose the market value approach in relation

to the interest (the interest holder) chooses under

subclause (4) of this clause to apply the alternative valuation

method for coal seam gas projects.

(2) For the purposes of paragraph 7(2)(b), the amount worked out

under this subclause is:

$0.60

Estimated reserves

Production since estimate

�

where:

estimated reserves is:

(a) if paragraph (b) does not apply--the most recent approved

estimate, made before 2 May 2010, of the proved, probable

and possible reserves of coal seam gas for the project,

expressed in gigajoules; or

(b) if the interest holder does not hold the entire interest in the

project--the portion of that estimate, expressed in gigajoules,

of those reserves that reflects the interest holder's interest in

the project.

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40 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

production since estimate is:

(a) if paragraph (b) does not apply--the amount of coal seam gas

produced from the project, expressed in gigajoules, between

the day on which that approved estimate was made and

2 May 2010; or

(b) if the interest holder does not hold the entire interest in the

project--the portion of that production, expressed in

gigajoules, that reflects the interest holder's interest in the

project.

(3) To be an approved estimate for the purposes of subclause (2), an

estimate of the proved, probable and possible reserves of coal seam

gas for the project must have been:

(a) determined in accordance with the requirements of the

document known as the Petroleum Resources Management

System, issued by the Society of Petroleum Engineers, as in

force at the time the estimate was made; and

(b) independently certified as being determined in accordance

with the requirements of that document as so in force.

(4) The interest holder may choose to apply the alternative valuation

method for coal seam gas projects.

(5) The choice is not valid unless the interest holder gives it to the

Commissioner:

(a) in the approved form; and

(b) on or before 30 August 2013, or within a further time that the

Commissioner allows.

(6) The choice is irrevocable, and applies to:

(a) the year of tax commencing on 1 July 2012; and

(b) all later years of tax.

(7) For the purposes of paragraph (1)(c):

(a) a person holding an interest in the project is taken to have

acquired the interest if, and when, the person is taken to have

acquired that interest for the purposes of clause 18; and

(b) a company holding an interest in the project is taken to have

been acquired if, and when, the company is taken to have

been acquired for the purposes of that clause.

Starting base for onshore petroleum projects and the North West Shelf project

Schedule 4

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Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 41

9 Reducing the starting base amount

(1) Despite clause 7, a starting base amount under that clause is

reduced by the sum of all the reductions (if any) required by

subclauses (2) and (3) of this clause in relation to any starting base

assets to which the starting base amount relates.

Use etc. that is not related to project activities

(2) Reduce the starting base amount to the extent (if any) that the

amount relates to a starting base asset that, during the starting base

period relating to the asset, was used, or being constructed for use,

for a purpose other than carrying on project activities relating to

the petroleum project.

Use etc. that equates to excluded expenditure

(3) Reduce the starting base amount (or, if that amount is reduced

under subclause (2), that amount as so reduced) to the extent (if

any) that the amount:

(a) relates to a starting base asset that, during the starting base

period relating to the asset, was used, or being constructed

for use, for carrying on project activities relating to the

petroleum project; but

(b) would have been excluded expenditure if it had been an

amount of expenditure that the person holding the interest in

the project incurred.

(4) However, subclause (3) does not apply if:

(a) under Part 2, the market value approach is the valuation

approach for the person's starting base assets relating to the

petroleum project; and

(b) the amount would have been excluded expenditure only

because of paragraph 44(e), (f) or (g).

Note:

Subclause (4) ensures that a starting base amount in relation to an

interest in a petroleum project is not reduced under the market value

approach.

Starting base period

(5)

The

starting base period in relation to a starting base asset is a

period, between 2 May 2010 and 1 July 2012:

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42 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

(a) during which a person held both the asset and the interest in

the project; and

(b) during which the asset was, for any purpose, used or being

constructed for use.

Division 2--Starting base assets

10 Meaning of starting base asset

(1) Property, or a legal or equitable right that is not property, is a

starting base asset relating to an interest in an onshore petroleum

project or the North West Shelf project if:

(a) either of the following existed just before 2 May 2010:

(i) the production licence relating to the project, or (if the

project is a combined project) a pre-combination project

in relation to the project;

(ii) a retention lease, or exploration permit, from which the

project (or pre-combination project) is derived; and

(b) on 2 May 2010, the property or right was used, or being

constructed for use, in carrying on project activities relating

to the project (or pre-combination project); and

interest under Part 2.

(2) Despite subclause (1):

(a) if, under Part 2, the book value approach is the valuation

approach for the interest in the petroleum project, the

following are not starting base assets:

(i) rights and interests constituting the petroleum project;

(ii) mining, quarrying or prospecting information, or rights

to such information;

(iii)

goodwill;

and

(b) property, or a legal or equitable right, is not, and is taken

never to have been, a starting base asset if:

(i) a valid choice has not been made under section 3

specifying the valuation approach for the interest; or

(ii) a valid starting base return that covers the property or

right has not been given to the Commissioner.

Starting base for onshore petroleum projects and the North West Shelf project

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Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 43

(3) If, under Part 2, the market value approach is the valuation

approach for the person's starting base assets relating to the interest

in the petroleum project, treat:

(a) any mining, quarrying or prospecting information; or

(b) any rights to such information;

as property, or a legal or equitable right, for the purposes of

subsection (1).

(4) Despite subsection (1), something that has already become a

starting base asset relating to an interest in a petroleum project

derived from a particular retention lease or exploration permit

cannot become a starting base asset relating to an interest in

another petroleum project derived from that lease or permit.

(5) This Schedule applies to any improvement to, or any fixture on,

land as if it were an asset separate from the land, whether the

improvement or fixture is removable or not.

11 Holding a starting base asset

(1)

person

holds a starting base asset relating to an onshore

petroleum project or the North West Shelf project if:

(a) the asset is a depreciating asset that the person holds (within

the meaning of section 40-40 of the Income Tax Assessment

Act 1997); or

(b) the person would hold the asset (within the meaning of that

section) if it were a depreciating asset.

(2) However, a person who is entitled to the interest in a petroleum

project is taken to hold the rights and interests constituting the

interest in the project.

Division 3--Valuation of starting base assets

12 The book value of a starting base asset

(1) If, under Part 2, the book value approach is the valuation approach

for an interest in an onshore petroleum project or the North West

Shelf project, the book value of a starting base asset relating to the

interest is the book value under subclause (2) or (3).

(2)

If:

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44 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

(a) the value of the asset is recorded in the accounts from which

the most recent audited financial report before 2 May 2010

was prepared; and

(b) the financial report relates to a financial period that ended in

the 18 months preceding that day;

the book value of the asset is as follows:

Long term bond

Accepted value

rate for the

1.05

valuation period

�

where:

accepted value is:

(a) the value recorded in those accounts, unless paragraph (b)

applies; or

(b) if that value is inconsistent with an auditor's report on the

financial report--a value that is consistent with the auditor's

report.

long term bond rate for the valuation period is the long term bond

rate for the valuation period under subclause (4).

n is the number of days in that valuation period, divided by 365.

(3) However, the initial book value of the asset is zero if the value of

the asset is not recorded as mentioned in subclause (2).

(4) The valuation period for the asset is the period:

(a)

starting:

(i) on the day the financial report mentioned in

paragraph (2)(a) was prepared, unless subparagraph (ii)

of this paragraph applies; or

(ii) if the value of the asset recorded in the accounts from

which the financial report was produced is inconsistent

with an auditor's report on the financial report--on the

day of the auditor's report; and

(b) ending at the end of 30 June 2012.

13 The market value of a starting base asset

(1) If, under Part 2, the market value approach is the valuation

approach for an interest in an onshore petroleum project or the

Starting base for onshore petroleum projects and the North West Shelf project

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Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 45

North West Shelf project, the market value of a starting base asset

relating to the interest is the market value of the asset on 1 May

2010.

(2) However, if the asset is a right or interest constituting the interest

in the project, in working out its market value for the purposes of

this section, disregard any liability of the person to make any

payments, of a kind known as private override royalty payments,

relating to:

(a) petroleum recovered from:

(i) the production licence area in relation to the project; or

(ii) an exploration permit area for an exploration permit

from which the production licence to which the project

relates is derived; or

(iii) a retention lease area for a retention lease from which

the production licence to which the project relates is

derived; or

(b) marketable petroleum commodities produced from such

petroleum.

14 Partial disposal of a starting base asset before 1 July 2012

(1) The book value under clause 12, or the market value under

clause 13, of a starting base asset relating to an interest that a

person holds in an onshore petroleum project or the North West

Shelf project is reduced to the extent (if any) that any of the

person's interest in the asset is disposed of during the period:

(a) starting on the day provided under subclause (2); and

(b) ending at the end of 30 June 2012.

(2) The period starts:

(a) if, under Part 2, the book value approach is the valuation

approach for the interest:

(i) on the day of the financial report (if any) mentioned in

paragraph 12(2)(a) of this Schedule in relation to the

accounts in which the value of the asset is recorded; or

(ii) if subparagraph (i) of this paragraph does not apply--on

2 May 2010; or

(b) if, under Part 2, the market value approach is the valuation

approach for the interest--on 2 May 2010.

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46 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

(3) Treat, for the purposes of this clause, as a disposal of part of the

person's interest in the starting base asset an arrangement that has

the effect of transferring to another person part of the benefits or

entitlements that the person has in relation to the asset.

Division 4--Interim expenditure

15 Meaning of interim expenditure

(1) An amount of expenditure that a person incurs relating to an

interest in an onshore petroleum project or the North West Shelf

project is interim expenditure relating to the interest to the extent

that:

(a)

the

amount:

(i) relates to a depreciating asset that is used, or being

constructed for use, on 1 July 2012 in carrying on

project activities relating to the project; and

(ii) is included in the cost of the asset under

Subdivision 40-C of the Income Tax Assessment Act

1997; and

(iii) was incurred during the period starting on the day

provided under subclause (3) or (4) and ending at the

end of 30 June 2012; or

(b)

the

amount:

(i) relates to a CGT asset that is not a depreciating asset

and that is used, or being constructed for use, on 1 July

2012 in carrying on project activities relating to the

project; and

(ii) is included in the cost base of the asset; and

(iii) was incurred during the period starting on the day

provided under subclause (3) or (4) and ending at the

end of 30 June 2012; or

(c)

the

amount:

(i) is mining capital expenditure (within the meaning of the

Income Tax Assessment Act 1997) relating to project

activities relating to the project; and

(ii) was incurred between 2 May 2010 and 30 June 2012.

(2) However, if the asset is a CGT asset (but not a depreciating asset),

treat the amount of the interim expenditure as not including any

Starting base for onshore petroleum projects and the North West Shelf project

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Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 47

part of the amount that consists of the third element of the cost

base under subsection 110-25(4) of the Income Tax Assessment Act

1997.

Start of the expenditure period

(3) If, under Part 2, the book value approach is the valuation approach

for the interest in the petroleum project, the period starts:

(a) if subclause (5) applies to the asset:

(i) on the day of the financial report (if any) mentioned in

paragraph 12(2)(a) of this Schedule in relation to the

accounts in which the value of the asset is recorded; or

(ii) if subparagraph (i) of this paragraph does not apply--on

2 May 2010; or

(b) otherwise--on the first day, before the end of 30 June 2012,

from which the person held the asset at all times until the end

of 30 June 2012.

Example: The person bought an asset on 1 January 2011 and sold it on 1 May

2011. The person bought the asset again on 1 June 2011 and still held

it at the end of 30 June 2012.

The expenditure incurred in buying the asset the first time (on

1 January 2011) is not interim expenditure, because the person did not

hold the asset until the end of 30 June 2012, as required by

paragraph (3)(b).

The expenditure incurred in buying the asset the second time (on

1 June 2011) is interim expenditure (if it is covered by

paragraph (1)(a)), because the person held the asset until the end of

30 June 2012.

(4) If, under Part 2, the market value approach is the valuation

approach for the interest in the petroleum project, the period starts:

(a) if subclause (5) applies to the asset--on 2 May 2010; or

(b) otherwise--on the first day, before the end of 30 June 2012,

from which the person held the asset at all times until the end

of 30 June 2012.

(5) This subclause applies to an asset if, at all times between 2 May

2010 and 30 June 2012, the person holding the asset

simultaneously held:

(a) the interest in the project; or

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48 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

(b) if, for some or all of that period, the project did not exist--an

interest in a retention lease, or in an exploration permit, from

which the project is derived.

(6) For the purposes of subclauses (3) to (5), an amount of expenditure

to which paragraph (1)(c) applies is taken to be an asset that the

person incurring the expenditure holds from the day the

expenditure was incurred until the day on which the person ceases

to hold the interest in the project.

Excluded expenditure

(7) Despite subclause (1), the amount is not interim expenditure to the

extent (if any) that the amount would have been excluded

expenditure if it had been incurred after 1 July 2012.

16 Adjusted interim expenditure amounts

(1)

If:

(a) under Part 2, the book value approach is the valuation

approach for an interest in an onshore petroleum project or

the North West Shelf project; and

(b) a person holding an interest in the project incurred an amount

of interim expenditure relating to the interest;

there is an adjusted interim expenditure amount relating to the

interest.

(2) The adjusted interim expenditure amount is as follows:

Long term bond

Amount of the

rate for the interim

1.05

interim expenditure

valuation period

�

where:

long term bond rate for the interim valuation period is the long

term bond rate for the interim valuation period under subclause (3).

n is the number of days in the interim valuation period, divided by

365.

(3) The interim valuation period for an amount of interim expenditure

is the period:

Starting base for onshore petroleum projects and the North West Shelf project

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(a) starting on the day on which the person holding the interest in

the petroleum project incurred the amount; and

(b) ending at the end of 30 June 2012.

17 Partial disposal of an asset before 1 July 2012

(1)

If:

(a) a person incurs interim expenditure relating to an interest that

a person holds in an onshore petroleum project or the North

West Shelf project; and

(b) the interim expenditure relates to a depreciating asset or a

CGT asset; and

between 2 May 2010 and 1 July 2012;

the amount of the interim expenditure is taken to be reduced to the

extent the person's interest in the asset is disposed of.

(2) Treat, for the purposes of this clause, as a disposal of part of the

person's interest in the asset an arrangement that has the effect of

transferring to another person part of the benefits or entitlements

that the person has in relation to the asset.

Part 4--The look-back approach

Note:

Section 45 deals generally with when eligible real expenditure may be

incurred in relation to onshore petroleum projects and the North West

shelf project, including under the look-back approach. This Part deals

with some specific issues under the look-back approach, in particular

issues relating to the costs of acquiring projects.

18 Expenditure incurred in acquiring interests in petroleum projects

Interests acquired between 1 July 2007 and 2 May 2010

(1)

If:

(a) under Part 2, the look-back approach is the valuation

approach for an interest in an onshore petroleum project or

the North West Shelf project; and

(b) during the period between 1 July 2007 and 2 May 2010,

either or both of the following events occurred:

(i) a person acquired the interest;

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50 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

(ii) if the person holding the interest is a company--the

person was acquired by another company;

the starting base expenditure, incurred by the person referred to in

paragraph (b) in relation to the last such event to occur in relation

to the interest during that period, includes the expenditure

(acquisition expenditure) referred to in subsection (2).

(2) The acquisition expenditure is whichever of the following is

applicable:

(a) the expenditure incurred by the person in acquiring the

interest;

(b) the expenditure incurred by the other company in making the

acquisition.

(3) Despite subclause (1), the starting base expenditure incurred by the

person in relation to the project does not include acquisition

expenditure to the extent (if any) that the acquisition expenditure

reflects the value of things that are not project activities relating to

the project.

(4) Despite subclause (1), the starting base expenditure incurred by the

person in relation to the project does not include acquisition

expenditure to the extent that the expenditure relates to an acquired

exploration expenditure amount.

(5) Acquisition expenditure included under subclause (1) in the

starting base expenditure incurred by the person is taken, for the

purposes of this Act, to have been incurred on 2 May 2010.

Interests acquired before 30 June 2007

(6) If, under Part 2, the look-back approach is the valuation approach

for an interest in an onshore petroleum project or the North West

Shelf project, the eligible real expenditure incurred by the person

holding the interest does not include:

(a) if the person acquired the interest before 30 June 2007--

expenditure (acquisition expenditure) incurred by the person

in acquiring the interest; or

(b) if the person is a company that was acquired by another

company before 30 June 2007--expenditure (acquisition

expenditure) incurred by the other company in making the

acquisition.

Starting base for onshore petroleum projects and the North West Shelf project

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Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 51

Acquisitions

(7) For the purposes of this clause and clause 19, the person holding an

interest in an onshore petroleum project or the North West Shelf

project is taken to have acquired the interest if and only if:

(a) in a case where the project existed on 2 May 2010--the

person purchased the interest; or

(b) in a case where the project did not exist on 2 May 2010--the

person purchased:

(i) the exploration permit or retention lease from which the

production licence to which the project relates is

derived; or

(ii) an interest in the exploration permit or retention lease.

The acquisition is taken to have occurred when the transaction was

first entered into that, when complete, had the effect of transferring

the interest, or the permit or lease.

(8) For the purposes of this clause and clause 19:

(a) a company is taken to have been acquired by another

company if and only if the company became a subsidiary of

the other company; and

(b) the acquisition is taken to have occurred when:

(i) the transaction was first entered into that, when

complete, had the effect of the first becoming a

subsidiary of the other company; or

(ii) an agreement to enter into that transaction;

was first entered into; and

acquisition expenditure relating to the acquisition includes

any expenditure the company incurred in acquiring any

interest in the other company:

(i) during the period between 1 July 2007 and 2 May 2010;

(ii) under an agreement entered into during the period

between 1 July 2007 and 2 May 2010.

Note:

Section 2B defines a subsidiary.

(9) However, paragraph (8)(c) does not apply to acquisition

expenditure to the extent (if any) that the acquisition expenditure

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52 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

reflects the value of things that are not project activities relating to

the petroleum project in which the other company holds an interest.

19 Acquired exploration expenditure amounts

(1)

If:

(a) under Part 2, the look-back approach is the valuation

approach for an interest in an onshore petroleum project or

the North West Shelf project; and

(b)

either:

(i) the person holding the interest acquired the interest

during the period between 1 July 2007 and 2 May 2010;

(ii) the person holding the interest is a company that was

acquired during the period between 1 July 2007 and

2 May 2010; and

(c)

expenditure

that:

(i) the person holding the interest incurred in acquiring the

interest; or

(ii) the person making the acquisition of the company

holding the interest incurred in making the acquisition;

would, apart from subclause 18(4), be included under

clause 18 in the starting base expenditure incurred by the

person holding the interest;

the person holding the interest is taken, for the purposes of this

Act, to have an acquired exploration expenditure amount in

relation to the project equal to the amount of acquisition

expenditure allocated to exploration assets and evaluation assets, as

recorded in a financial report that satisfies subclause (2).

(2) The financial report satisfies this subclause if:

(a) it has been audited; and

(b) it was prepared in accordance with the accounting standards

(within the meaning of the Corporations Act 2001); and

(3) The acquired exploration expenditure amount is taken, for the

purposes of this Act, to be acquired exploration expenditure

incurred by the person holding the interest on 2 May 2010.

Starting base for onshore petroleum projects and the North West Shelf project

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Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 53

20 Restriction applying the look-back approach in certain cases

Despite section 45 and clauses 18 and 19, if:

(a) under Part 2, the look-back approach is the valuation

approach for an interest in an onshore petroleum project or

the North West Shelf project; and

(b) particular expenditure would, apart from this clause, be

eligible real expenditure incurred by a person in relation to

the project; and

(c)

either:

(i) if the expenditure was incurred between 1 July 2010 and

30 June 2012--the person has not kept and retained

records, relating to the expenditure, that would meet the

requirements of section 112; or

(ii) if the expenditure was incurred between 1 July 2002 and

30 June 2010--the person has not kept and retained

records that enable the amount and nature of the

expenditure to be reasonably substantiated;

the eligible real expenditure incurred by the person in relation to

the project does not include that expenditure.

21 Certain receipts taken to be assessable receipts

If:

(a) under Part 2, the look-back approach is the valuation

approach for an interest in an onshore petroleum project or

the North West Shelf project; and

(b) between the starting base day under subsection 45(5) and

30 June 2012, the person incurred, in relation to particular

property, expenditure that would have been eligible real

expenditure incurred by the person in relation to the project if

the person were to incur it after 30 June 2012; and

circumstances arose relating to the property that would have

caused an assessable receipt of one of the following kinds to

be derived in relation to the property if those circumstances

were to arise after 30 June 2012:

(i) an assessable property receipt;

(ii) an assessable miscellaneous compensation receipt;

(iii) an assessable employee amenities receipt;

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54 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

an amount equal to what would have been the amount of that

assessable receipt is taken, for the purposes of this Act, to be an

assessable receipt of that kind derived by the person, in relation to

the project, in the financial year in which the circumstances arose.

Part 5--Starting base returns and assessments

22 Starting base returns

(1) A person must give to the Commissioner a starting base return if

the person wishes to choose a valuation approach under clause 3 in

relation to a petroleum project.

(2) A starting base return is not valid unless:

(a) it is in the approved form; and

(b) it is signed by or on behalf of the person giving the return;

and

or within a further time that the Commissioner allows.

(3) Without limiting the information that the approved form may

require, the starting base return must provide the following

information:

(a) the valuation approach chosen under clause 3 in relation to

the petroleum project;

(b) if the book value approach or market value approach was

chosen--the amount of the starting base amount relating to

the person's interest in the project;

eligible real expenditure incurred before 1 July 2012 relating

to the person's interest in the project.

23 Starting base assessments

(1) If a person has given to the Commissioner a valid starting base

return relating to a petroleum project, the Commissioner is taken to

have made, in accordance with what the person specified in the

return, an ascertainment (a starting base assessment) of:

(a) if the book value approach or market value approach is the

valuation approach relating to the person's interest in the

Starting base for onshore petroleum projects and the North West Shelf project

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Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 55

project--the amount of the starting base amount relating to

the person's interest in the project; or

(b) if the look-back approach is the valuation approach relating

to the person's interest in the project--the amount and kind

of eligible real expenditure incurred before 1 July 2012

relating to the person's interest in the project.

(2) The starting base assessment is taken to have been made on the day

the starting base return is given to the Commissioner.

(3) On and after the day the Commissioner is taken to have made the

starting base assessment, the return is taken to be a notice of the

starting base assessment:

(a) under the hand of the Commissioner; and

(b) given to the person on the day the Commissioner is taken to

have made the starting base assessment.

(4) The starting base assessment is taken, from the time it is made, to

be an assessment for the purposes of:

(a) section 65 (validity of assessments); and

(b) section 66 (objections to assessments); and

(d) section 106 (evidence).

(5) Without limiting subclause (4), from the first time an assessment (a

general assessment) is made of the person's taxable profit (or that

the person has no taxable profit), in relation to the project and a

year of tax commencing on or after 1 July 2012:

(a) the starting base assessment is taken, for the purposes of this

Act, to form part of the general assessment; and

(b) any objection against the general assessment under section 66

must not relate to matters to which the starting base

assessment relates; and

of Part VI must not relate to matters to which the starting

base assessment relates, except to the extent necessary to

give effect to the starting base assessment (including the

starting base assessment as amended).

(6) Without limiting subsection 67(2), the Commissioner may amend a

general assessment at any time to the extent necessary to give

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56 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

effect to the starting base assessment (including the starting base

assessment as amended).

17 Transitional

For the purposes of applying clause 13 of Schedule 2 to the Petroleum

Resource Rent Tax Assessment Act 1987 in relation to working out the

market value of a starting base asset, disregard any liability relating to

receipts to which subitem 13(1) of Schedule 2 to the Petroleum

Resource Rent Tax Assessment Amendment Act 2011 applies.

Starting base for onshore petroleum projects and the North West Shelf project

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Other amendments Part 2

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 57

Part 2--Other amendments

Petroleum Resource Rent Tax Assessment Act 1987

18 Section 2 (at the end of paragraphs (a) to (f) of the

definition of long term bond rate)

Add "and".

19 Section 2 (paragraph (h) of the definition of long term

bond rate)

After "subsequent financial year", insert "that is earlier than the

financial year commencing on 1 July 2012".

20 Section 2 (at the end of the definition of long term bond

rate)

Add:

; 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.

21 Section 2 (at the end of the definition of post-30 June 2008

petroleum project)

Add ", and includes an onshore petroleum project and the North-West

shelf project".

22 Section 2

Insert:

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

Schedule 4

Starting base for onshore petroleum projects and the North West Shelf

project

Part 2

Other amendments

58 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

(ii) the exploration permit area of the exploration permit to

which the retention lease is related.

23 Section 2 (definition of transferable exploration

expenditure)

Omit "the Schedule", substitute "Schedule 1".

24 Section 2 (notes 1 and 2 at the end of the definition of

transferable exploration expenditure)

Omit "the Schedule", substitute "Schedule 1".

25 After section 4

Insert:

4A Holding an interest--petroleum project

Petroleum projects generally

(1) For the purposes of this Act, a person is taken to have held, at a

particular time, an interest 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.

(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

(3) For the purposes of this Act, a person is taken to have held, at a

particular time, an interest 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:

Starting base for onshore petroleum projects and the North West Shelf project

Schedule 4

Other amendments Part 2

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 59

(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:

(i) a time before the project combination certificate came

into force; and

(ii) a time after the earliest of the production licences in

relation to the pre-combination projects came into force;

one or more of the production licence areas in relation to the

pre-combination projects; or

licences in relation to the pre-combination projects came into

force--the earliest pre-licence area to arise in relation to any

of the pre-combination projects.

The Bass Strait project and the North West Shelf project

(4) For the purposes of this Act, a person is taken to have held, at a

particular time, an interest 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 the production licence

areas in relation to that project.

4B Holding an interest--exploration permit

For the purposes of this Act, a person is taken to have held an

interest 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.

4C Holding an interest--retention lease

For the purposes of this Act, a person is taken to have held an

interest 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:

Schedule 4

Starting base for onshore petroleum projects and the North West Shelf

project

Part 2

Other amendments

60 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

(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.

26 Subsection 22(1) (note)

Omit "the Schedule", substitute "Schedule 1".

27 Subsection 35A(1)

Omit "the Schedule", substitute "Schedule 1".

28 Subsection 35A(1) (note)

Omit "the Schedule", substitute "Schedule 1".

29 Subsection 35A(2)

Omit "the Schedule" (wherever occurring), substitute "Schedule 1".

30 Subsection 35A(2) (note)

Omit "the Schedule", substitute "Schedule 1".

31 Subsection 35B(1)

Omit "the Schedule", substitute "Schedule 1".

32 Subsection 35B(1) (note)

Omit "the Schedule", substitute "Schedule 1".

33 Subsection 35B(2)

Omit "the Schedule" (wherever occurring), substitute "Schedule 1".

34 Subsection 35B(2) (note)

Omit "the Schedule", substitute "Schedule 1".

35 Section 36A (note)

Omit "the Schedule", substitute "Schedule 1".

36 Subsection 36B(1) (note)

Omit "the Schedule", substitute "Schedule 1".

Starting base for onshore petroleum projects and the North West Shelf project

Schedule 4

Other amendments Part 2

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 61

37 At the end of section 44

Add:

Note:

Under the look-back approach under Schedule 2, some excluded

expenditure relating to onshore petroleum projects or the North West

Shelf project may be included in eligible real expenditure.

38 Subsections 45A(2) and (4), 45B(2) and (4) and 45D(2)

Omit "the Schedule", substitute "Schedule 1".

39 Subparagraph 45D(3)(b)(ii)

Omit "the Schedule", substitute "Schedule 1".

40 Paragraphs 45E(1)(b) and (c) and (3)(c)

Omit "the Schedule", substitute "Schedule 1".

41 Subparagraph 48(1)(a)(ia)

Omit "the Schedule", substitute "Schedule 1".

42 Paragraph 48A(5)(c)

Omit "the Schedule", substitute "Schedule 1".

43 At the end of section 61

Add:

Note:

For starting base assessments, see clause 23 of Schedule 2.

44 At the end of subsection 67(2)

Add:

Note:

The Commissioner may also amend an assessment at any time to give

effect to a starting base assessment, see subclause 23(6) of Schedule 2.

45 Paragraphs 97(1A)(c) and 98A(1)(b)

Omit "the Schedule", substitute "Schedule 1".

46 Schedule (heading)

Repeal the heading, substitute:

Schedule 4

Starting base for onshore petroleum projects and the North West Shelf

project

Part 2

Other amendments

62 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

Schedule 1--Provisions relating to incurring

and transfer of exploration

expenditure on or after 1 July 1990

47 Clause 1 of the Schedule (definition of pre-licence area)

Repeal the definition.

48 Clauses 2 and 3 of the Schedule

Repeal the clauses.

49 Part 1A of the Schedule (heading)

Repeal the heading, substitute:

Part 1A--Special rules relating to the transfer of

certain expenditure

50 At the end of Part 1A of the Schedule

Add:

4C Certain onshore or North West Shelf expenditure is not

transferable

Despite paragraphs 7(b), 8(5)(c), 11(b), 12(4)(c) and 18(3)(e) of

this Schedule and subclauses 18(1) and 18(2) of this Schedule,

amounts of exploration expenditure incurred, before 1 July 2012,

in relation to:

(a) an onshore petroleum project; or

(b) the North West Shelf project;

are not transferable under section 45A, 45B or 45C.

51 Clause 5 of the Schedule (paragraph (a) of the definition of

notional taxable profit)

After "class 2 GDP factor expenditure", insert ", resource tax

expenditure, acquired exploration expenditure, starting base

expenditure".

Schedule 5

Consolidated groups

Part 1

Main amendments

64 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

Schedule 5--Consolidated groups

Part 1--Main amendments

Petroleum Resource Rent Tax Assessment Act 1987

1 At the end of Part V

Add:

Division 8--Consolidated groups

58N Choice to consolidate

(1) A head company of a consolidated group or a MEC group or a

provisional head company of a MEC group may, in writing, choose

to apply this Division in relation to the group.

(2) However, subsection (1) does not apply if a notice has not been

given to the Commissioner under section 703-58 or 719-76 of the

Income Tax Assessment Act 1997 in relation to the group.

(3) The choice is not valid unless it is in the approved form, and the

head company or the provisional head company gives it to the

Commissioner:

(a) within 21 days after making the choice; or

(b) within such further period as the Commissioner allows.

(4) The choice is irrevocable, and:

(a) has effect on and after the day the choice is made; and

(b) does not have effect after the consolidated group or MEC

group ceases to exist.

Note:

The head company's interests in petroleum projects just before a

consolidated group or MEC group ceases to exist would be transferred

at the time the group ceases to exist: see section 58R.

58P Single entity rule

(1) If a person is a subsidiary member of the consolidated group or

MEC group for any period in which the choice is in effect, the

person and any other subsidiary member of the group are taken for

the purposes covered by subsection (2) to be parts of the head

Consolidated groups Schedule 5

Main amendments Part 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 65

company or provisional head company of the group, rather than

separate persons, during that period.

Note:

Despite the single entity rule, a subsidiary member of the group is

jointly and severally liable for a liability of the head company: see

section 721-10 of the Income Tax Assessment Act 1997.

(2) The purposes covered by this subsection are:

(a) working out the head company's and subsidiary member's

interests in onshore petroleum projects for any year of tax in

which any of the period occurs or any later year of tax; and

(b) working out any tax that is payable in relation to such an

interest for any such year of tax; and

arising in relation to such an interest for any such year of tax.

Examples: The following are some examples of consequences of the single entity

rule:

(a) a subsidiary member's interest in an onshore petroleum project

becomes a part of the head company's aggregated interest in the

project;

(b) a subsidiary member's assessable receipts and deductible

expenditure relating to the interest are inherited by the head

company along with the interest;

becoming a member of the group (and any interest charges

associated with such a liability) remain liabilities of the

subsidiary member and not the head company.

58Q Interests taken to be transferred to head company etc. on

joining

If, because of the application of section 58P, a person is taken at a

particular time to start being part of the head company or

provisional head company, section 48 applies as if each of the

person's interests in onshore petroleum projects just before that

time had been transferred to the head company or provisional head

company.

58R Interests taken to be transferred to leaving entity on leaving

(1)

If:

(a) at a particular time, a person stops being taken, because of

section 58P, to be part of the head company or provisional

head company; and

Schedule 5

Consolidated groups

Part 1

Main amendments

66 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

(b) the entitlement comprising the person's interest in an onshore

petroleum project just after that time is all of the entitlement

comprising the company's interest in the project just before

that time;

section 48 applies as if the person's interest in the project just after

that time had been transferred from the company under a

transaction of a kind referred to in subsection 48(1A).

(2)

If:

(a) at a particular time, a person stops being taken, because of

section 58P, to be part of the head company or provisional

head company; and

(b) the entitlement comprising the person's interest in an onshore

petroleum project just after that time is part, but not all, of the

entitlement comprising the company's interest in the project

just before that time;

section 48A applies as if the person's interest in the project just

after that time had been transferred from the company under a

transaction of a kind referred to in subsection 48A(1).

58S Acquisition of consolidated group by another consolidated

group etc.

If a member of a consolidated group or MEC group (the

relinquishing group) becomes a member of another consolidated

group or MEC group (the acquiring group) at a particular time

(the acquisition time):

(a) first apply subsection 58R(1) or (2) (as the case requires) in

relation to the member ceasing to be a member of the

relinquishing group as if section 58P did not apply in relation

to the member just after the acquisition time; and

(b) then apply section 58Q in relation to the member becoming a

member of the acquiring group as if section 58P did not

apply in relation to the member just before the acquisition

time.

58T Effect of choice to continue group after shelf company becomes

new head company

(1) If a company (the interposed company) chooses under subsection

124-380(5) of the Income Tax Assessment Act 1997 that a

Consolidated groups Schedule 5

Main amendments Part 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 67

consolidated group is to continue in existence at and after the time

referred to in that subsection as the completion time, for the

purposes of this Act:

(a) the group is taken not to have ceased to exist under

subsection 703-5(2) of that Act because the company referred

to in subsection 124-380(5) of that Act as the original

company ceases to be the head company of the group; and

(b) the interposed company is taken to have become the head

company of the consolidated group at the completion time;

and

company at that time.

Note:

A further result is that the original company is taken to have become a

subsidiary member of the group at that time.

(2) For the purposes referred to in subsection 58P(2) in relation to a

year of tax ending after the completion time, everything that

happened in relation to the original company before the completion

time:

(a) is taken to have happened in relation to the interposed

company instead of in relation to the original company; and

(b) is taken to have happened in relation to the interposed

company instead of what would (apart from this section) be

taken to have happened in relation to the interposed company

before that time;

as if, at all times before the completion time, the interposed

company had been the original company, and the original company

had been the interposed company.

Note:

This section treats the original company and the interposed company

as having in effect exchanged identities throughout the period before

the completion time, but without affecting any of the original

company's other attributes.

58U Effect of change of head company or provisional head company

of a MEC group

(1) For the purposes referred to in subsection 58P(2) in relation to a

year of tax:

(a)

if:

(i) a company (the old head company) is the head

company of a

MEC group at the end of an income year

Schedule 5

Consolidated groups

Part 1

Main amendments

68 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

(within the meaning of the Income Tax Assessment Act

1997); and

(ii) a different company (the new head company) is the

head company of the group at the start of the next

income year (the transition time); or

(b)

if:

(i) a company (also the old head company) is the

provisional head company of a

MEC group just before

a cessation event (within the meaning of that Act)

happens to the company; and

(ii) a different company (also the new head company) is the

provisional head company of the group just after that

cessation event (also the transition time);

everything that happened in relation to the old head company

before the transition time is taken to have happened in relation to

the new head company instead, as if the new head company had

been the old head company at all times before the transition time.

Note 1:

This section treats the new head company as having in effect assumed

the identity of the old head company throughout the period before the

transition time, but without affecting any of the other attributes of the

old head company.

Note 2:

A further result is that the old head company is taken to have become

a subsidiary member of the group at the transition time.

(2) However, this section does not apply in relation to a year of tax

ending on or before the transition time.

58V Effect of group conversions involving MEC groups

(1) This section applies if, at a particular time (the conversion time):

(a) a consolidated group (the new group) is created from a

MEC group (the old group); or

(b) a MEC group (the new group) is created from a consolidated

group (the old group).

(2) For the purposes referred to in subsection 58P(2) in relation to a

year of tax ending after the conversion time:

(a) the new group is taken to be a continuation of the old group;

and

(b) the old group is taken not to have ceased to exist for the

purposes of subsection 58N(4); and

Consolidated groups Schedule 5

Main amendments Part 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 69

the old group before the conversion time is taken instead to

have happened in relation to:

(i) if the head company of the old group is the same entity

as the head company of the new group--that entity in its

role as head company of the new group; or

(ii) otherwise--the head company of the new group (as if

the head company of the new group had been the head

company of the old group at all times before the

conversion time).

Schedule 5

Consolidated groups

Part 2

Other amendments

70 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

Part 2--Other amendments

Income Tax Assessment Act 1997

2 At the end of subsection 703-50(1)

Add:

Note 3:

A group that is consolidated for income tax purposes may also

consolidate for the purposes of the Petroleum Resource Rent Tax

Assessment Act 1987 (see section 58N of that Act).

3 At the end of subsection 719-50(1)

Add:

Note 3:

A group that is consolidated for income tax purposes may also

consolidate for the purposes of the Petroleum Resource Rent Tax

Assessment Act 1987 (see section 58N of that Act).

4 Subsection 721-10(2) (at the end of the table)

Add:

subsection 82(1) or (2) of the Petroleum

Resource Rent Tax Assessment Act 1987

(when tax assessed under that Act is

payable)

the year of tax (within the

meaning of that Act) to which

the tax assessed under that Act

relates

100

subsection 82(3) of the Petroleum

Resource Rent Tax Assessment Act 1987

(shortfall interest charge on shortfall in

tax assessed under that Act)

the year of tax (within the

meaning of that Act) to which

the

shortfall interest charge

relates

105

section 95 of the Petroleum Resource

Rent Tax Assessment Act 1987

(when

instalment of tax is payable)

the instalment period (within

the meaning of that Act) in

relation to the instalment

110

subsection 98C(4) of the Petroleum

Resource Rent Tax Assessment Act 1987

(when instalment transfer interest charge

is due)

the instalment transfer charge

period (within the meaning of

that Act) in relation to the

charge

5 At the end of section 721-10

Add:

(5) Items 95, 100, 105 and 110 of the table in subsection (2) only

apply in relation to tax-related liabilities that are due and payable

by the

head company because it chooses, under section 58N of the

Consolidated groups Schedule 5

Other amendments Part 2

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 71

Petroleum Resource Rent Tax Assessment Act 1987, to apply

Division 8 of Part V of that Act in relation to the

consolidated

group.

Petroleum Resource Rent Tax Assessment Act 1987

6 Section 2

Insert:

consolidated group has the meaning given by subsection 995-1(1)

of the Income Tax Assessment Act 1997.

7 Section 2

Insert:

created:

(a) in relation to a consolidated group--has the meaning given

by section 703-15 of the Income Tax Assessment Act 1997;

and

(b) in relation to a MEC group--has the meaning given by

section 719-25 of that Act.

8 Section 2 (definition of head company)

Repeal the definition, substitute:

head company:

(a) of a designated company group--has the meaning given by

section 2BA; and

(b) of a consolidated group or a MEC group--has the meaning

given by subsection 995-1(1) of the Income Tax Assessment

Act 1997.

9 Section 2

Insert:

MEC group has the meaning given by subsection 995-1(1) of the

Income Tax Assessment Act 1997.

10 Section 2

Insert:

Schedule 5

Consolidated groups

Part 2

Other amendments

72 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

member:

(a) in relation to a consolidated group--has the meaning given

by section 703-15 of the Income Tax Assessment Act 1997;

and

(b) in relation to a MEC group--has the meaning given by

section 719-25 of that Act.

11 Section 2

Insert:

provisional head company of a MEC group has the meaning given

by subsection 995-1(1) of the Income Tax Assessment Act 1997.

12 Section 2

Insert:

subsidiary member has the meaning given by subsection 995-1(1)

of the Income Tax Assessment Act 1997.

Other amendments Schedule 6

Amendments related to clean energy package Part 1

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 73

Schedule 6--Other amendments

Part 1--Amendments related to clean energy

package

Petroleum Resource Rent Tax Assessment Act 1987

1 At the end of subsection 28(1)

Add:

; (c) amounts receivable by the person in respect of the sale of free

carbon units (within the meaning of the Clean Energy Act

2011):

(i) that the person received under the Jobs and

Competitiveness Program (within the meaning of that

Act); and

(ii) that relate to the petroleum project.

2 After paragraph 44(i)

Insert:

(ia) payments of unit shortfall charge under the Clean Energy Act

2011; or

Schedule 6

Other amendments

Part 2

Amendments related to repeal of an Act

74 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

Part 2--Amendments related to repeal of an Act

Petroleum Resource Rent Tax Act 1987

3 The whole of the Act

Repeal the Act.

4 Application

The amendment made by item 3 of this Schedule applies in relation to

the year of tax beginning on 1 July 1986 and later years of tax.

5 Transitional

To the extent that:

(a) a person has paid or pays, in relation to a year of tax ending

before the commencement of this Schedule, an amount in

respect of a liability for tax that the Petroleum Resource Rent

Tax Act 1987 purported to impose on the person for that year;

and

(b) the amount has not been repaid to the person;

the payment of the amount is taken, by this item, to have discharged or

to discharge the person's liability to pay tax imposed by the Petroleum

Resource Rent Tax (Imposition--General) Act 2011, the Petroleum

Resource Rent Tax (Imposition--Customs) Act 2011 or the Petroleum

Resource Rent Tax (Imposition--Excise) Act 2011 (as the case requires)

in relation to that year of tax.

Other amendments Schedule 6

Other amendments Part 3

Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011 75

Part 3--Other amendments

Crimes (Taxation Offences) Act 1980

6 Subsection 3(1) (paragraph (a) of the definition of

petroleum resource rent tax)

Repeal the paragraph, substitute:

(a) tax imposed by any of the following:

(i)

the

Petroleum Resource Rent Tax (Imposition--

General) Act 2011;

(ii)

the

Petroleum Resource Rent Tax (Imposition--

Customs) Act 2011;

(iii)

the

Petroleum Resource Rent Tax (Imposition--Excise)

Act 2011;

as assessed under the Petroleum Resource Rent Tax

Assessment Act 1987; and

Excise Tariff Act 1921

7 Subsection 3(1) (definition of Resource Rent Tax area)

Repeal the definition, substitute:

Resource Rent Tax area means an area that, for the purposes of

the Petroleum Resource Rent Tax Assessment Act 1987:

(a)

the:

(i) exploration permit area of an exploration permit other

than one of the North West Shelf exploration permits; or

(ii) retention lease area of a retention lease that is related to

an exploration permit other than one of the North West

Shelf exploration permits; or

(iii) production licence area of a production licence that is

related to an exploration permit other than one of the

North West Shelf exploration permits; and

(b) is not an onshore area within the meaning of that Act.

Schedule 6

Other amendments

Part 3

Other amendments

76 Petroleum Resource Rent Tax Assessment Amendment Bill 2011 No. , 2011

Income Tax Assessment Act 1997

8 Subsection 995-1(1) (definition of petroleum resource rent

tax)

Repeal the definition, substitute:

petroleum resource rent tax means tax imposed by any of the

following:

(a)

the

Petroleum Resource Rent Tax (Imposition--General) Act

2011;

(b)

the

Petroleum Resource Rent Tax (Imposition--Customs) Act

2011;

(c)

the

Petroleum Resource Rent Tax (Imposition--Excise) Act

2011;

as assessed under the Petroleum Resource Rent Tax Assessment

Act 1987.

Petroleum Resource Rent Tax Assessment Act 1987

9 Section 2 (definition of tax)

Repeal the definition, substitute:

tax means tax imposed by any of the following:

(a)

the

Petroleum Resource Rent Tax (Imposition--General) Act

2011;

(b)

the

Petroleum Resource Rent Tax (Imposition--Customs) Act

2011;

(c)

the

Petroleum Resource Rent Tax (Imposition--Excise) Act

2011.

10 After paragraph 31(a)

Insert:

; or (aa) assessable tolling receipts; or

11 Paragraphs 34A(1)(b), (2)(b), (2)(c) and (3)(b)

Omit "section 48", substitute "Division 5".

12 Subsection 98B(3) (definition of instalment transfer tax)

Commonwealth of Australia Bills

PETROLEUM RESOURCE RENT TAX ASSESSMENT AMENDMENT BILL 2011