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INCOME TAX ASSESSMENT ACT 1997 - SECT 418.80

Meaning of greenfields minerals expenditure

  (1)   An entity's greenfields minerals expenditure for an income year is the sum of:

  (a)   the amounts of any deductions to which the entity is entitled under section   40 - 25 for that income year in relation to declines in value that:

  (i)   are declines in value of * depreciating assets used for * exploration or prospecting for * minerals in an area to which subsection   (3) of this section applies; and

  (ii)   are worked out under subsection   40 - 80(1); and

  (b)   the amounts of any deductions for that income year to which the entity is entitled in relation to expenditure:

  (i)   that is of a kind referred to in subsection   40 - 730(1); and

  (ii)   in relation to which the entity satisfies one or more of paragraphs 40 - 730(1)(a) to (c); and

  (iii)   that is expenditure on exploration or prospecting for minerals in an area to which subsection   (3) of this section applies.

  (2)   For the purposes of subsection   (1), disregard a deduction to the extent that it relates to:

  (a)   matters other than:

  (i)   declines in value of * depreciating assets used for; or

  (ii)   expenditure on;

    * exploration or prospecting for * minerals in an area to which subsection   (3) of this section applies; or

  (b)   exploration or prospecting for * petroleum or oil shale; or

  (c)   activities (such as feasibility studies) undertaken to identify the viability of a mineral resource rather than its existence.

  (3)   This subsection applies to an area:

  (a)   that is in Australia; and

  (b)   in relation to which the entity * holds a * mining, quarrying or prospecting right at the time of incurring the expenditure, or is the transferee under a * farm - in farm - out arrangement; and

  (c)   that has not been identified as containing a mineral resource that is at least inferred in a report prepared in accordance with the requirements of:

  (i)   unless subparagraph   (ii) applies--the document that is known as the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves and that took effect on 20   December 2012; or

Note:   This document is commonly referred to as the JORC Code (2012 Edition).

  (ii)   such other document as the regulations prescribe; and

  (d)   that is not, and is not in, any of the following:

  (i)   the coastal sea of Australia (within the meaning of subsection   15B(4) of the Acts Interpretation Act 1901 );

  (ii)   an area referred to in subsection   960 - 505(2).

  (4)   For the purposes of paragraph   (3)(c), disregard any mineral resource, identified in a report of a kind referred to in that paragraph, that does not include * minerals the * exploration or prospecting for which involved:

  (a)   use of assets referred to in paragraph   (1)(a); or

  (b)   expenditure referred to in paragraph   (1)(b).

  (5)   The Commissioner may request an entity that is a * greenfields minerals explorer in an income year to prepare, within the period specified in the request, a report that:

  (a)   is of the kind referred to in paragraph   (3)(c); and

  (b)   relates to an area in relation to which the entity has * greenfields minerals expenditure for the income year.

The request may specify the manner in which, and the form in which, the report is to be prepared.


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