The Commonwealth Treasury


Tax Expenditures Statement - 2007

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Natural resource taxes

Tax expenditures for manufacturing and mining

G1 Gas transfer price regulations
Fuel and energy ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
- - * * * * * *
Tax expenditure type:
Deduction
2006 TES code:
New
Commencement date:
1989
*Category:
1-
Expiry date:
-
Legislative reference:
Section 26-20 Income Tax Assessment Act 1997

Fuel and energy ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
- - * * * * * *
Tax expenditure type:
Deduction
2006 TES code:
New
Commencement date:
20 December 2005
*Category:
2+
Expiry date:
-
Legislative reference:
Petroleum Resource Rent Tax Assessment Regulations

For petroleum resource rent tax purposes, the gas transfer price regulations stipulate rules for calculating the gas transfer price where there is no arm’s length transaction. The regulations provide an allowance for capital expenditure which is based on the long term bond rate plus 7 percentage points rather than the benchmark rate (long term bond rate plus 5 per centage points).

G2 Increased deduction for petroleum exploration expenditure in designated offshore frontier areas
Fuel and energy ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
- - * * * * * *
Tax expenditure type:
Deduction
2006 TES code:
G1
Commencement date:
29 March 2004
*Category:
1+
Expiry date:
2008
Legislative reference:
Section 36C Petroleum Resource Rent Tax Assessment Act 1987

For petroleum resource rent tax purposes, petroleum exploration companies receive a 150 per cent uplift on pre-appraisal exploration expenditure conducted in the first term of an exploration permit in a designated frontier area.

G3 Transfer of exploration expenditure between petroleum resource rent tax projects
Fuel and energy ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
* * * * * * * *
Tax expenditure type:
Deduction
2006 TES code:
New
Commencement date:
1 July 1990
*Category:
2+
Expiry date:
-
Legislative reference:
Petroleum Resource Rent Tax Assessment Act 1987

Exploration expenditure can be transferred, under certain circumstances, between projects for petroleum resource rent tax (PRRT) purposes. Under the benchmark, the taxable entity is the project and undeducted expenditure is compounded and applied against future PRRT assessable receipts.

Petroleum

G4 Condensate excise-free status
Fuel and energy ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
150 330 250 320 320 320 320 320
Tax expenditure type:
Exemption
2006 TES code:
G2
Commencement date:
1977
Expiry date:
-
Legislative reference:
Schedule 17(B) of the Excise Tariff Act 1921

Condensate produced in a State or Territory, or inside the outer limits of the territorial sea of Australia, or marketed separately from a crude oil stream, or in the North West Shelf project area is exempt from the crude oil excise. Condensate is a light oil extracted from ‘wet’ gas and primarily processed for use in motor vehicles (commonly known as petrol).

 

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