Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 418.85

  (1)   An entity must not create * exploration credits for an income year of a total amount that exceeds the entity's * maximum exploration credit amount for the income year.

  (2)   An entity's maximum exploration credit amount for an income year (the credit year ) is the smallest of the following amounts:

  (a)   the entity's * greenfields minerals expenditure for the credit year multiplied by the entity's * corporate tax rate for the credit year;

  (b)   the entity's * tax loss for the credit year multiplied by the entity's corporate tax rate for the credit year;

  (c)   the sum of:

  (i)   the entity's * exploration credits allocation for the credit year; and

  (ii)   the entity's * unused allocation of exploration credits from the income year immediately preceding the credit year.

Note:   The entity cannot have an unused allocation of exploration credits from the 2020 - 21 income year: see subsection   418 - 82(3A).

  (3)   In working out the entity's * greenfields minerals expenditure for the credit year for the purposes of paragraph   (2)(a), reduce that greenfields minerals expenditure by the sum of:

  (a)   all * recoupments that the entity receives in relation to the entity's greenfields minerals expenditure for the credit year; and

  (b)   if:

  (i)   an amount has been included in the entity's assessable income because a * balancing adjustment event occurs for a * depreciating asset; and

  (ii)   all or part of the amount of the deduction to which the entity is entitled under section   40 - 25 for the credit year in relation to the decline in value of the asset is included in the entity's greenfields minerals expenditure for that year;

    so much of the amount of that deduction as was included in that greenfields minerals expenditure.

  (4)   In working out the entity's * tax loss for the credit year for the purposes of paragraph   (2)(b), reduce that tax loss by the sum of:

  (a)   all * recoupments that the entity receives in relation to the entity's * greenfields minerals expenditure for the credit year; and

  (b)   any part of the entity's tax loss for the credit year that would not be deductible in the income year immediately following the credit year; and

  (c)   if:

  (i)   an amount has been included in the entity's assessable income because a * balancing adjustment event occurs for a * depreciating asset; and

  (ii)   all or part of the amount of the deduction to which the entity is entitled under section   40 - 25 for the credit year in relation to the decline in value of the asset is included in the entity's greenfields minerals expenditure for that year;

    so much of the amount of that deduction as was included in that greenfields minerals expenditure.

  (5)   For the purposes of paragraph   (4)(b), assume that the entity's assessable income for the income year immediately following the credit year is sufficient to allow the entity to utilise the whole of that * tax loss in relation to the credit year.

  (6)   A failure to comply with this section does not invalidate the creation of an * exploration credit.