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  • Resource Super Profit Tax, Treasury May 2 2010

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    A properly structured Resource Super Profits Tax will bring widespread gains to the nation. The current method of charging is based on royalties 17 3. Royalties tax production rather than profit 17 3. A tax on super profits will do better 19 3.

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    A properly structured Resource Super Profits Tax will bring widespread gains to the nation. The current method of charging is based on royalties 17 3. Royalties tax production rather than profit 17 3. A tax on super profits will do better 19 3.

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    1K views44 pages

    Resource Super Profit Tax, Treasury May 2 2010

    Uploaded by

    peter_martin9335
    A properly structured Resource Super Profits Tax will bring widespread gains to the nation. The current method of charging is based on royalties 17 3. Royalties tax production rather than profit 17 3. A tax on super profits will do better 19 3.

    Copyright:

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    of 44
    RaGletaict, g_ Australan Government TheTreary THE RESOURCE SUPER PROFITS TAX: Mane nec (© commonweath of Australia 20:0 Ison 978-0.682.746009 ‘This work i copyright. Apar from any use as permitted under the Copyright Act 1968, no part may be reproduces by any proces without prior writ petsion for the Cornmeonweslth, Requests and ngs concerning production ane rights shouldbe addressed to the ‘Commonuesth Copyright Administration ‘tlorney General's Department 2-5 National Greut [BARTON ACT 2600 Or pores at hupifwww ag govaulecs ‘This epoca ther related information aisle a wom fururctaxgovay Contents EXECUTIVE SUNMARY Parr A FORMATION SOURCES ARO CONSULTATION PROCESSES. 1 STAKEHOLDER FORMATION AND CONSULTATION. 14 formation documents sn 12 Phaesofconston ronnie 43 Timelinetocommancemant- sense 14 Tengo Referer of Resource Tax Contain Pane wn oe 4 Pag B: THE CAS FOR CHANGE — IMPROVING RESOURCE TAX ARRANGEMENTS 2 WARODUCTON nnn — — [A surng all Auseaions hare inthe tune rom our Roa FeNeWable ESOUTEEE enn 22 promotinginvesimen, production and emeleyment oppertuntesin te etouree sector ———— 13 123. shangthe etre rom our resouresn 2:6 Fealy responsible tx rf61 3 Whvvavea Resounce SuPer Potts TAX. 32. Thecommuity has right to charge for extraction OF F50Uh nnn 22, extracton of resources releases resource softs 33. | Thecarent method af charging isbased on royalties 34 Rojas ax production ater than prof. 35. Ataconsupe pros do Bet nn 36 Apropey structured Resource Soper Profits Tax ll bring widespread gan... 19 Me ResouncE SUPER PROFITS TAX EXPLAINED. 4 THeResounce Suren PROFS TAK AL The Resource Super Pros Tax 42 Tre ResourceSuper Profits Taxrate, 43. The Resource Super Profs Tax coptlezount 444 Thetretment of Resource Super Profs T3565 vennnnnrnrensnnn 26 45. TheResowce Super rots Tax allowance rat. 5 —_TweoNcoMe syste — DETALED DEIGNISSUES 54 Whowilelable for Resource Super Prot Ta nn $2 whenresorces wb subject ote Resource Soper POM Tem 53 _Tesingpolt. 54, Asesabereaipts and deductible expenditure. 55 steteandterrtoryryates. 5° Inerction with income toner = 3 57 arrangements or smallbusnes. : 58 Sportin expend nnn ‘he cue Super rasa eum ate ton (6 Traxsmowe ro re Resounet SuPtn PRotts TAX. 64 Busting project and the Retouce Super Profits Tax. 52 Project sbjot to Petru Resource Ret Ta 63 Transtonfor projects int the Resource Supe Profits a 64 Esryacessto the Resource Super Profits Torstar ise. 35 APrenoU ILUSTRATION OFTHE DEFERENCE BETWEEN ROYALTIES AND THE RESOURCE SUPER, PROFTSTAX en Pee Executive summary ‘The Australian Government wil introduce 2 Resource Super Profits Tax (RSPT, as recomended by he Australes Future Tor System review. The RSPT wil ensure al Australians share inthe return, from eur non-enewable resources. The RSPT wil commence on 1 ul 2012 ‘The Australian community owns the mineral and petroleum resources located in Australia and he Australian exclusive economic one. The Ausra’ Future Tax System review found thatthe curent system of resource use charges and ‘mcaton could be substantaly Improved. Current taxes and charges on our non-renewable resources could serve the Australian community Detter, They provide 9 relatively small return to the community when pres fie nd donot ‘eogrise the different investment aves required for diferent project ‘The Australian Governments RSPT wl ensue the community receives a mare consistent share in {he zetuns from our non-renewable resources. It wil lo provde a more efficent mechanien for ‘collecting a share of tse returns and remove inpedimantsto ining vestment anid producto, ‘The RSPT is world cls. sets 3 new benchmark for resource taxation, The RSPT wil bea relatively ‘neural tax, wth minimal dstorins to investment and production decison ‘The RSFT wil be payable a a rate of 40 per cent on the reslsed value of resource deposts, ease as the diference between the revenues generated ffom resource erection, ane sociated casts, ‘The RSPT will Be 3 deductible expense for income tax purpares, 0 that after income &a, the fective rate OFRSPT willbe lez than 40 pe cen, Unlike company income tae, under the RSPT the Australian Government wil guarantee to crest fem for the tax value of ther erection and exploration costs, and wl even refund that eet when 8 project winds up Where there are delays in receiving 2 crest for exertion or production costs (for example, through depreciton or loss cary forwara arrangements) entities wll be compensated by on ery allowance ‘The Australian Goverment ®wil provid resource ents witha refundable cet for state royalties ald, The cect wil be avaiable at lest up to the amount of royales Imposed at the tine of ‘ansauncement,incuding scheduled increases, etunding royalties lows the states to contin fo collect a stable stream of revenve ftom royalties, while removing the effects they have on Investment and production, ‘The net effect of aplyng the RSPT and refunding royale wil be that highly profitable projects wil ay additional tx, and ess proftable projects wl 2a ess tax than t preset. The REPT will ot discourage investment. The RSPT wl any tax super profits afc, 60 par cent of ‘he supe profs wl til be avallabe to investors ‘Tre asowce Sper Foe Te fa emtothe maton ‘As commodity ries vary, the ASPT wil ensure the community receives constant share of super Profits. This wl be less pro-yeical for Invests than under the current fax ane royally regime, here the effective tox raterses when commit pies al nd vie verse. Ezistng resource projects wil be transitioned inca the new scheme wth the exception of Petroleum Resouree ent Tax projects fr which optin arrangements wil be developed In consultation with Indus, ‘The transitional acrangements wil provides tox creditn recognition of previous investment made or commited to before the introduction ofthe RSP To reduce the impact ofthe RSPT on cath Fows in {he carly years ofthe scheme, he Australian Government wil 29 allow previous vestrant tobe Geprecated at aceerated rates. These arrangements wil provide a “soft start that substantially reduces RSPT abies inthe early years of the scheme ‘To ensure Investment decisions are not dstrted inthe period before the RSPT commences, capital Investment (investment and exploration) undertaken between announcement ad commencement willbe treated the same as post commencement Investment. ‘The RSPT wil fund a package of measures to promote growth in the resource sector and seross the entre economy, 3s well so ensure we save some oft benef fromm our resources, ‘The resource sector wil be supported by néw inastucture funding to address the potential for cexpacty constraints to emerge. A resource exploration rebate wil also help smell exploration ‘companies serch for new deposit. ‘The brosdereconemy wil benefit from a phase reduction Inthe company ta ct, Sal businesses wil benefit from an early start om the company tax cut and’ simplfstion of deprecation arrangements. The package wil also benefit the ratrement savings of working Austrafars. The superennuation _varantee wl be eradualy Increased, new superanncation concession wil be provide fo lower 'ncome earners and contributions caps fr people aged over 50 wil be Increase to alow them to make catch-up savings. ‘The measures within the Government's tax reform package wil be implemented in 2 fiscally sponsible way, and will be broadly reverue-nevtral. Therefore, the patkoge as. 2 whole I Cortngent on implementation of he REPT ‘The Australin Government wil consult extensively with stakeholders on technical design ksues Auzng the period before the scheme commences. Tis proces wil start with an initial round of

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