Resource Super Profits Tax (RSPT)

A controversial proposal in response to the Henry Review announced by the Federal Government this week was a 40% Resources Rent Tax. This is not good news for large mining companies as it would be a significant tax increase, making Australian mining projects among the most highly taxed in the world and therefore threaten their ability to compete on a global scale.

From 1 July 2012, the proposed features of a RSPT of 40% on profits from exploitation of non-renewable resources are as follows:

• applies to all mining and petroleum projects;
• 40% of assessable resource profits (assessable revenue less deductible expenses including capital allowances);
• losses carried forward with interest to preserve value;
• tax credit for losses if business ceases;
• receipts calculated from sale of resources;
• deductions limited to cost of extracting resources and getting them to the taxing point;
• taxing point – the point at which revenue and costs determined for assessing RSPT (eg mine gate or well head);
• RSPT payments deductible for income tax purposes; and
• refundable tax offset for exploration expenditure.

These reforms were somewhat expected changes as a means of providing the Federal Government with additional revenue.

For more information please contact your Baker Affleck accountant or tax consultant on (07) 5538 3088 or click here and we will contact you