Commonwealth: Petroleum Resource Rent Tax Assessment Act 1987 (Cth)

Petroleum Resource Rent Tax Assessment Act 1987 No. 142, 1987 Compilation No. 51 Compilation date: 11 December 2024 Includes amendments: Act No. 136, 2024 About this compilation This compilation This is a compilation of the Petroleum Resource Rent Tax Assessment Act 1987 that shows the text of the law as amended and in force on 11 December 2024 (the compilation date). The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law. Uncommenced amendments The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the Register for the compiled law. Application, saving and transitional provisions for provisions and amendments If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes. Editorial changes For more information about any editorial changes made in this compilation, see the endnotes. Modifications If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the Register for the compiled law. Self‑repealing provisions If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes. Contents Part I—Preliminary 1 Short title 1A Application of the Criminal Code Part II—Interpretation 2 Defined terms 2A GDP factor 2B Group companies, subsidiaries, basic company groups and overall company groups 2BA Designated company groups 2C Greater Sunrise apportionments 2D Future closing‑down expenditure 2E Marketable petroleum commodity 3 Petroleum pools 4 Relationship between licences, permits and leases etc. 4A Holding an interest—petroleum project 4B Holding an interest—exploration permit 4C Holding an interest—retention lease 5 Petroleum exploration and recovery in relation to certain areas 6 Termination of use of property in relation to a petroleum project 7 Property installed ready for use 8 Consideration not in cash 9 Amounts credited, reinvested etc. to be taken to be receivable 10 Translation of amounts into Australian currency 11 Residence 12 Partnerships 13 Unincorporated associations 14 Application of Act Part III—Administration 15 General administration of Act 16 Annual report Part IV—Petroleum projects 19 Petroleum project 20 Combining of petroleum projects Part V—Liability to taxation Division 1—Liability to tax on taxable profit 21 Liability to pay tax 22 Taxable profit Division 2—Assessable receipts 22B Effect of GST etc. on assessable receipts 23 Assessable receipts 24 Assessable petroleum receipts 24A Assessable tolling receipts 25 Assessable exploration recovery receipts 26 Amounts notionally derived where no sale of petroleum etc. 27 Assessable property receipts 28 Assessable miscellaneous compensation receipts 29 Assessable employee amenities receipts 29A Assessable incidental production receipts 30 Reduction of amount of assessable property etc. receipts 31 Time of derivation of receipts 31A Eligible real expenditure and the Bass Strait project 31AA Eligible real expenditure—North West Shelf project Division 3—Deductible expenditure 31B Effect of input tax credits etc. on deductible expenditure 32 Deductible expenditure 33 Class 1 augmented bond rate general expenditure 34 Class 1 augmented bond rate exploration expenditure 34A Class 2 uplifted general expenditure 35 Class 1 GDP factor expenditure 35A Class 2 uplifted exploration expenditure 35B Class 2 GDP factor expenditure 35C Resource tax expenditure 35E Starting base expenditure 35F Augmented denied deductible expenditure 36 Class 1 augmented bond rate exploration and class 1 GDP factor expenditures in relation to project groups 36A Designated frontier areas for 2004 36B Designated frontier areas for 2005 to 2009 36C Uplifted frontier expenditure 37 Exploration expenditure 38 General project expenditure 39 Closing‑down expenditure 40 Bad debts 41 Effect of procuring the carrying on of operations etc. by others 42 Expenditure on property for partial project use 43 Deferred use of property on project etc. 44 Excluded expenditure 45 Time of incurring of expenditure Division 3A—Transfer of exploration expenditure incurred on or after 1 July 1990 45A Transfer of expenditure—general 45B Transfer of expenditure—group companies 45C Commissioner's power to make transfers of expenditure 45D Effect of transfer of expenditure 45E Instalment transfers and annual transfers Division 4—Tax credits 46 Credits in respect of closing‑down expenditure 47 Application of credits Division 5—Effect of certain transactions 48 Transfer of entire entitlement to assessable receipts 48A Transfer on or after 1 July 1993 of part of entitlement to assessable receipts 49 Transfer before 1 July 1984 of partial entitlement to assessable receipts Division 6—Anti‑avoidance Subdivision A—Arrangements to obtain tax benefits 50 Arrangements 51 Tax benefits 51A The bases for identifying tax benefits 52 Arrangements to which this Subdivision applies 53 Cancellation of tax benefits etc. 55 Operation of Subdivision Subdivision B—Non‑arm's length transactions 56 Arm's length transaction 57 Non‑arm's length receipts 58 Non‑arm's length expenditure Division 7—Functional currency 58A Objects of this Division 58B Person may elect to be bound by the functional currency rules 58C Applicable foreign currency 58D Basic translation rules 58E Translation rule—assessable receipt 58F Translation rule—eligible real expenditure 58G Translation rule—transfer of entire entitlement to assessable receipts 58H Translation rule—transfer of part of entitlement to assessable receipts 58J Translation of taxable profit, or excess closing‑down expenditure, into Australian currency 58K Special translation rules—events that happened before the current election took effect 58L Withdrawal of election 58M Special translation rules—events that happened before the withdrawal of an election took effect Part VI—Returns and assessments Division 1—Returns 59 Annual returns 60 Other returns Division 2—Assessments (general) 61 Making assessments 62 Self‑assessment 63 Default assessments 64 Reliance on information in returns and statements 65 Validity of assessments 66 Objections to assessments Division 3—Assessments (amendment) 67 Amendment of assessments 68 Amended assessments taken to be assessments 69 Amending amended assessments 70 Extended periods for amendment—taxpayer applications and private rulings 71 Extended periods for amendment—Federal Court orders and taxpayer consent 72 Refund of overpaid amounts Part VIII—Collection and recovery of tax Division 1—General 82 When tax and shortfall interest charge payable 85 Unpaid tax and charges 92 Person in receipt or control of money of non‑resident Division 2—Collection by instalments 93 Interpretation 94 Liability to pay instalments of tax 95 When instalment of tax is payable 96 Amount of instalment of tax 97 Notional tax amount 98 Instalment statement 98A Instalment transfer interest charge—liability 98B Instalment transfer interest charge—amount 98C Instalment transfer interest charge—notification and payment 98D Instalment transfer interest charge—remission 99 Application of payments of instalments of tax 100 Unpaid instalments Part X—Miscellaneous 106A Review of certain decisions 109 Agents and trustees 112 Records to be kept and preserved 113 Service on partnerships and associations 114 Regulations Schedule 1—Provisions relating to incurring and transfer of exploration expenditure on or after 1 July 1990 Part 1—Interpretation 1 Defined terms 4 Amounts to be worked out to nearest dollar Part 1A—Special rules relating to the transfer of certain expenditure 4A Certain Greater Sunrise expenditure is not transferable 4B Greater Sunrise transferable exploration expenditure must be adjusted 4C Certain North West Shelf expenditure is not transferable Part 2—Class 2 uplifted exploration expenditure and transferable exploration expenditure 5 Interpretation 6 Matters dealt with in this Part 7 What happens if there is no notional taxable profit 8 What happens if there is a notional taxable profit Part 3—Class 2 GDP factor expenditure and transferable exploration expenditure 9 Interpretation 10 Matters dealt with in this Part 11 What happens if there is no notional taxable profit 12 What happens if there is a notional taxable profit Part 4—Transferable exploration expenditure not incurred in relation to a project 13 Matters dealt with in this Part 14 Assumptions on which amounts to be worked out 15 Non‑transferable expenditure 16 Amounts to be worked out 17 What happens if the notional assessable receipts equal or exceed the notional deductible expenditure 18 What happens if the notional deductible expenditure exceeds the notional assessable receipts Part 5—General rules relating to transfer of exploration expenditure 19 Interpretation 20 Matters dealt with in this Part 21 Rule—must be a notional taxable profit in relation to receiving project 22 Rule—person must have held interests in relation to transferring entity and receiving project 23 Rule—transfer to project with most recent production licence 24 Rule—restriction on transfer of standard uplift expenditure 25 Rule—restriction on transfer of GDP expenditure 26 Rule—total transferred not to exceed notional taxable profit Part 6—Rules relating to transfer of exploration expenditure between group companies 27 Interpretation 28 Situations to which this Part applies 29 Matters dealt with in this Part 30 Rule—must be a notional taxable profit in relation to profit company and receiving project 31 Rule—continuity of interest within company group 32 Rule—transfer to project with most recent production licence 33 Rule—restriction on transfer of standard uplift expenditure 34 Rule—restriction on transfer of GDP expenditure 35 Rule—total transferred not to exceed notional taxable profit Part 7—Compounding of transferred amounts 36 Matters dealt with in this Part 36A Transfer years that start on or after 1 July 2019 37 Transfer years that start before 1 July 2019—expenditure incurred in a standard uplift expenditure year 38 Transfer years that start before 1 July 2019—expenditure incurred in a GDP expenditure year Endnotes Endnote 1—About the endnotes Endnote 2—Abbreviation key Endnote 3—Legislation history Endnote 4—Amendment history An Act about petroleum resource rent tax, and for related purposes Part I—Preliminary 1 Short title This Act may be cited as the Petroleum Resource Rent Tax Assessment Act 1987. 1A Application of the Criminal Code Chapter 2 of the Criminal Code applies to all offences against this Act. Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility. Part II—Interpretation 2 Defined terms In this Act, unless the contrary intention appears: Aboriginal person has the meaning given by subsection 4(1) of the Aboriginal and Torres Strait Islander Act 2005. access authority means a petroleum access authority within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. accounts includes: (a) ledgers; and (b) journals; and (c) statements of financial performance; and (d) profit and loss accounts; and (e) balance‑sheets; and (f) statements of financial position; and also includes statements, reports and notes attached to, or intended to be read with, anything covered by any of the above paragraphs. acquisition has the meaning given by section 195‑1 of the GST Act. agent includes: (a) a person who, for and on behalf of a person out of Australia, has the management or control in Australia of the whole or a part of a business of the second‑mentioned person; and (b) a person declared by the Commissioner, by notice in writing served on the person, to be an agent or the sole agent of a person for the purposes of this Act. annual transfer has the meaning given by subsection 45E(4). applicable commencement date, in relation to a petroleum project, means: (a) unless paragraph (b) or (c) applies—1 July 1986; or (b) if the project is the Bass Strait project, or if the Bass Strait project is a pre‑combination project in relation to the project—1 July 1990; or (c) if the project is the North West Shelf project—1 July 2012. applicable foreign currency has the meaning given by section 58C. apportionment percentage figure: (a) in relation to a year of tax—has the meaning given by subsection 2C(2); and (b) in relation to any other period—has the meaning given by subsection 2C(3). approved form has the meaning given by section 388‑50 in Schedule 1 to the Taxation Administration Act 1953. Note: Forms previously approved by the Commissioner under this Act continue in effect: see item 230 of Schedule 10 to the Tax Laws Amendment (2004 Measures No. 7) Act 2005. assessment means the ascertainment of the amount of a person's taxable profit (or that a person has no taxable profit) in relation to a year of tax and a petroleum project, and of the tax payable on that amount (or that no tax is payable). Australia, when used in a geographical sense, has the same meaning as in the Income Tax Assessment Act 1997. Australian law has the meaning given by subsection 995‑1(1) of the Income Tax Assessment Act 1997. basic company group has the meaning given by section 2B. Bass Strait exploration permit means the exploration permit known as VIC/P1. Bass Strait project means the petroleum project referred to in subsection 19(1A). block has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006. combined project means a petroleum project to which subsection 19(2) applies. Commissioner means the Commissioner of Taxation. company means a body corporate that has a share capital. condensate means a mixture that includes pentane and hexane, where the pentane and hexane comprise more than 50% by weight of the mixture. creditable purpose has the meaning given by section 195‑1 of the GST Act. current apportionment percentage has the meaning given by subsection 2C(1). decreasing adjustment has the meaning given by section 195‑1 of the GST Act. Deputy Commissioner means a Deputy Commissioner of Taxation. designated company group has the meaning given by section 2BA. designated frontier area means that block or those blocks that constitute both: (a) an area or part of an area: (i) specified in section 36A; or (ii) specified in an instrument made under subsection 36B(1); and (b) an exploration permit area. designated frontier expenditure, in relation to a petroleum project and a financial year, means exploration expenditure that is actually incurred: (a) by a person in that year where the eligible exploration or recovery area in relation to the project is a designated frontier area; and (b) during the original period of the exploration permit concerned (before the permit is first renewed or ceases to be in force); other than exploration expenditure that is incurred in evaluating or delineating a petroleum pool (within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006) that has been discovered in a designated frontier area. eligible real expenditure means exploration expenditure, general project expenditure, resource tax expenditure, starting base expenditure or closing‑down expenditure. employee amenities means housing, health, educational, recreational, welfare or other similar facilities and services for, or facilities and services involved in the supply of meals to, employees or dependants of employees, not being facilities and services conducted for the purpose of profit‑making. excess closing‑down expenditure has the meaning given by paragraph 46(1)(a). excluded commodity means a marketable petroleum commodity that: (a) has been sold; (b) after being produced, has been further processed or treated; (c) has been moved away from the place of its production other than to a storage site adjacent to that place; or (d) has been moved away from a storage site adjacent to the place of its production. excluded fee means an amount of a kind referred to in paragraph 113(1)(c), subsection 115(5), paragraph 118(1)(c), subsection 178(4) or paragraph 181(1)(c) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. exploration permit means a petroleum exploration permit within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. exploration permit area means a petroleum exploration permit area within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. external petroleum, in relation to a petroleum project, means petroleum, or constituents of petroleum, recovered from an area or areas other than the production licence area or production licence areas in relation to the project. facilities means land, buildings, plant, equipment and other facilities. financial year means any financial year that commenced or commences on or after 1 July 1979. foreign currency means a currency other than Australian currency. future closing‑down expenditure has the meaning given by section 2D. GDP factor, in relation to a financial year, means the GDP factor for the financial year worked out in accordance with section 2A. general interest charge means the charge worked out under Part IIA of the Taxation Administration Act 1953. Greater Sunrise project means a petroleum project for the recovery of petroleum from one or more of the Greater Sunrise unit reservoirs. Greater Sunrise unit area has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006. Greater Sunrise unit reservoirs has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006. group company has the meaning given by section 2B. GST has the meaning given by section 195‑1 of the GST Act. GST Act means the A New Tax System (Goods and Services Tax) Act 1999. head company, of a designated company group, has the meaning given by section 2BA. holder of a registered interest, in relation to a production licence, means a person holding an interest in the production licence, being an interest created by a dealing in relation to which an entry has been made under subsection 494(3) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. increasing adjustment has the meaning given by section 195‑1 of the GST Act. ineligible project, in relation to a financial year, means a petroleum project that is a pre‑combination project by virtue of the issue of a project combination certificate during the financial year. infrastructure licence has the meaning given by section 7 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. input tax credit has the meaning given by section 195‑1 of the GST Act. instalment of tax means an instalment of tax payable under Division 2 of Part VIII. instalment percentage, in relation to an instalment period in a year of tax, means: (a) in the case of the first instalment period in the year of tax—25%; (b) in the case of the second instalment period in the year of tax—50%; and (c) in the case of the third instalment period in the year of tax—75%. instalment period, in relation to an instalment of tax in a year of tax, means the period commencing at the beginning of the year of tax and ending at the end of the month preceding that in which the instalment is due and payable. instalment transfer has the meaning given by subsection 45E(5). instalment transfer charge period has the meaning given by subsection 98A(4). instalment transfer excess has the meaning given by subsection 98A(1). instalment transfer interest charge has the meaning given by subsection 98A(4). internal petroleum, in relation to a petroleum project, means petroleum, or constituents of petroleum, recovered from the production licence area or production licence areas in relation to the project, where: (a) the petroleum, or the constituents of petroleum, is, or is to be, recovered or processed: (i) by a person entitled to derive assessable receipts in relation to the project; and (ii) for or on behalf of another person who is entitled to derive assessable receipts in relation to the project; or (b) the petroleum, or the constituents of petroleum, is, or is to be, sold: (i) by a person entitled to derive assessable receipts in relation to the project; and (ii) to another person who is entitled to derive assessable receipts in relation to the project. lease derived production licence means a production licence that is derived from a retention lease. liable person has the meaning given by subsection 98A(1). licensed property, in relation to a petroleum project, has the meaning given by paragraph 2D(1)(b). liquefied petroleum gas means a mixture that includes propane and butane, where the propane and butane comprise more than 50% by weight of the mixture. long‑term bond rate means: (a) in relation to the financial year commencing on 1 July 1979—0.1066; and (b) in relation to the financial year commencing on 1 July 1980—0.1258; and (c) in relation to the financial year commencing on 1 July 1981—0.1548; and (d) in relation to the financial year commencing on 1 July 1982—0.1443; and (e) in relation to the financial year commencing on 1 July 1983—0.1272; and (f) in relation to the financial year commencing on 1 July 1984—0.1341; and (g) in relation to the financial year commencing on 1 July 1985—0.1365; and (h) in relation to any subsequent financial year that is earlier than the financial year commencing on 1 July 2012—the average, expressed as a decimal fraction, of the assessed secondary market yields in respect of 10‑year non‑rebate Treasury bonds published by the Reserve Bank during that year or, if no assessed secondary market yield in respect of bonds of that kind was published by the Reserve Bank during the year, the decimal fraction determined by the Treasurer by notice in writing published in the Gazette for the purposes of this definition in relation to the financial year; and (i) in relation to the financial year commencing on 1 July 2012 and any subsequent financial year—has the same meaning as in subsection 995‑1(1) of the Income Tax Assessment Act 1997; and (j) in relation to a period that is not a financial year—has the same meaning as in subsection 995‑1(1) of the Income Tax Assessment Act 1997. marketable petroleum commodity has the meaning given by section 2E. market value, of a commodity, at a particular time, is its market value reduced by an amount equal to the amount of the input tax credit (if any) to which a person would be entitled if: (a) the person had acquired the commodity at that time; and (b) the acquisition had been solely for a creditable purpose. North West Shelf exploration permits means the exploration permits known as WA‑1‑P and WA‑28‑P. North West Shelf project means the petroleum project referred to in subsection 19(1B). notional tax amount has the meaning given by section 97. offence against this Act includes an offence against: (a) the Crimes Act 1914; or (b) the Taxation Administration Act 1953; relating to this Act. officer means a person appointed or engaged under the Public Service Act 1999. oil shale means any shale or other rock (other than coal) from which a fluid consisting of or including hydrocarbons may be extracted or produced. overall company group has the meaning given by section 2B. permit derived production licence means a production licence that is derived from an exploration permit. petroleum means: (a) petroleum within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006; or (b) oil shale. petroleum project or project means a petroleum project within the meaning of subsection 19(1) or (2), and includes the extended meaning given by subsection 19(2B) or (2C). pipeline licence has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006. post‑30 June 2008 petroleum project means a petroleum project, where the production licence, or each production licence, in relation to the project came into force after 30 June 2008, and includes the North‑West shelf project. pre‑1 July 2008 petroleum project means a petroleum project other than a post‑30 June 2008 petroleum project. pre‑combination project, in relation to a combined project, means: (a) any petroleum project that, immediately before the project combination certificate that gave rise to the combined project came into force, was a petroleum project in relation to any one or more of the production licences specified in the certificate; and (b) any petroleum project that is a pre‑combination project in relation to another petroleum project that is a pre‑combination project in relation to the combined project under paragraph (a) or this paragraph. pre‑licence area, in relation to a production licence, means: (a) if the production licence was derived from an exploration permit—the exploration permit area of the exploration permit; or (b) if the production licence was derived from a retention lease—either: (i) the retention lease area of the retention lease; or (ii) the exploration permit area of the exploration permit to which the retention lease is related. processing of external petroleum, in relation to a petroleum project, includes the stabilisation, transportation, storage or recovery of external petroleum in relation to the project. processing of internal petroleum, in relation to a petroleum project, includes the stabilisation, transportation, storage or recovery of internal petroleum in relation to the project. production licence means: (a) a petroleum production licence within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006; or (b) a lawful authority or right (however described) to undertake activities in the Western Greater Sunrise area for the recovery of petroleum from one or more of the Greater Sunrise unit reservoirs. production licence area means a petroleum production licence area within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and, in relation to a Greater Sunrise project, includes the Western Greater Sunrise area. production licence notice, in relation to a petroleum project, means a notice issued under subsection 258(7) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 in relation to the project. project combination certificate means a certificate under section 20. registered holder has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006. re‑inject, in relation to a marketable petroleum commodity produced from petroleum recovered from the eligible exploration or recovery area in relation to a petroleum project, means return the commodity to a natural reservoir in: (a) where the return takes place before any production licence in relation to the project comes into force—any area from which the recovery of petroleum would, at the time of the return, constitute recovery of petroleum from the eligible exploration or recovery area in relation to the project; and (b) in any other case—the production licence area or any of the production licence areas in relation to the project. related charge means: (a) shortfall interest charge, or general interest charge, in relation to tax; or (b) instalment transfer interest charge in relation to an instalment of tax. Resources Department means the Department that: (a) deals with matters arising under section 1 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006; and (b) is administered by the Resources Minister. Resources Minister means the Minister administering section 1 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. retention lease means a petroleum retention lease within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. retention lease area means a petroleum retention lease area within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. sales gas means a substance: (a) which is in a gaseous state when at the temperature of 15°C and a pressure of one atmosphere; and (b) which consists of naturally occurring hydrocarbons, or a naturally occurring mixture of hydrocarbons and non‑hydrocarbons; and (c) the principal constituent of which is methane; and (d) which: (i) if it is to be used as a feedstock for conversion to another product—has been processed so that it is suitable for that use; or (ii) in any other case—has been processed so that it is suitable for direct consumption as energy. Second Commissioner means a Second Commissioner of Taxation. services means water, light, power, access, communications or other services. shortfall interest charge means the charge worked out under Division 280 in Schedule 1 to the Taxation Administration Act 1953. starting base amount, in relation to a person's interest in a petroleum project, means the amount (if any) assessed as the starting base amount in relation to the person's interest under clause 23 of Schedule 2 as in force before 1 July 2019. subsidiary has the meaning given by section 2B. tax means tax imposed by any of the following: (a) the Petroleum Resource Rent Tax (Imposition—General) Act 2012; (b) the Petroleum Resource Rent Tax (Imposition—Customs) Act 2012; (c) the Petroleum Resource Rent Tax (Imposition—Excise) Act 2012. this Act includes: (a) the regulations; and (b) Part IVC of the Taxation Administration Act 1953, insofar as that Part relates to this Act. Torres Strait Islander has the meaning given by subsection 4(1) of the Aboriginal and Torres Strait Islander Act 2005. transferable exploration expenditure in relation to a person and a financial year, means expenditure that is, according to Schedule 1, transferable by the person in relation to the financial year. Note 1: the following provisions of Schedule 1 provide for expenditure to be transferable: • paragraph 7(b) • paragraph 8(5)(c) • paragraph 11(b) • paragraph 12(4)(c) • subclause 18(1) • subclause 18(2) • paragraph 18(3)(e). Note 2: Special rules apply in relation to the transfer of Greater Sunrise exploration expenditure: see Part 1A of Schedule 1. Tribunal means the Administrative Review Tribunal. trustee includes: (a) a person appointed or constituted trustee by act of parties, by order or declaration of a court, or by operation of law; or (b) an executor, administrator or other personal representative of a deceased person; or (c) a guardian or committee; or (d) a receiver or receiver and manager; or (e) a liquidator of a company; or (ea) an administrator, within the meaning of the Corporations Act 2001, of a company; or (eb) an administrator of a deed of company arrangement executed by a company under Part 5.3A of that Act; or (f) a person: (i) having or taking upon himself or herself the administration or control of any real or personal property affected by any express or implied trust; (ii) acting in any fiduciary capacity; or (iii) having the possession, control or management of any real or personal property of a person under any legal or other disability. unincorporated association does not include a joint venture. uplifted frontier expenditure has the meaning given by section 36C. Western Greater Sunrise area has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006. year of tax, in relation to a person in relation to a petroleum project, means a financial year commencing on or after the applicable commencement date, being: (a) except in a case to which paragraph (b) applies—the first financial year in which assessable petroleum receipts are derived by the person in relation to the project or a subsequent financial year; or (b) if the project is a combined project and the person has, in a financial year before the financial year in which the project combination certificate in relation to the project comes into force, derived assessable petroleum receipts in relation to any of the pre‑combination projects in relation to the combined project—the financial year in which the project combination certificate comes into force or a subsequent financial year. 2A GDP factor (1) For the purposes of this Act, the GDP factor for a financial year is the number (calculated to 3 decimal places) worked out by dividing the GDP deflator for the financial year by the GDP deflator for the immediately preceding financial year. (2) For the purposes of subsection (1), the GDP deflator for a financial year is the Implicit Price Deflator for Expenditure on Gross Domestic Product first published by the Australian Statistician in respect of the financial year. (3) If the Australian Statistician changes the index reference period for the GDP deflator, then, for the purposes of the application of subsection (1) after the change takes place, regard must be had only to the GDP deflator in terms of the new index reference period. (4) Where the GDP factor worked out under subsection (1) for a financial year would, if it were calculated to 4 decimal places, end with a number greater than 4, the GDP factor worked out under that subsection for that financial year is taken to be the GDP factor calculated to 3 decimal places under that subsection and increased by 0.001. 2B Group companies, subsidiaries, basic company groups and overall company groups Group company—period (1) For the purposes of this Act, a company is a group company in relation to another company and a period if: (a) one of the companies was a subsidiary of the other company; or (b) each of the companies was a subsidiary of the same company; at all times during so much of the period during which both companies were in existence. Group company—time (1A) For the purposes of this Act, a company is a group company in relation to another company at a particular time if, at that time: (a) one of the companies was a subsidiary of the other company; or (b) each of the companies was a subsidiary of the same company. Subsidiary (2) For the purposes of this Act, a company (in this subsection called the subsidiary company) is a subsidiary of another company (in this subsection called the holding company) at a particular time if, at that time: (a) all the shares in the subsidiary company are beneficially owned by: (i) the holding company; or (ii) a company that is, or 2 or more companies each of which is, a subsidiary of the holding company; or (iii) the holding company and a company that is, or 2 or more companies each of which is, a subsidiary of the holding company; and (b) there is no agreement, arrangement or understanding in force under which any person is able, or would be able after that time, to affect rights of the holding company or of a subsidiary of the holding company in relation to the subsidiary company. (3) For the purposes of this Act, where a company is a subsidiary of another company (including a company that is such a subsidiary by virtue of another application or other applications of this subsection), every company that is a subsidiary of the first‑mentioned company is also a subsidiary of the other company. (4) For the purposes of subsection (2), a person is taken to be able to affect rights of a company in relation to another company if the person has a right, power or option (whether because of any provision in the constituent document of either of those companies or because of any agreement or instrument or otherwise) to acquire those rights or do an act or thing that would prevent the first‑mentioned company from exercising those rights for its own benefit or receiving any benefits occurring because of those rights. Basic company group (4A) For the purposes of this Act, a basic company group is a group of companies, where each company in the group is a group company in relation to each other company in the group. Overall company group (4B) For the purposes of this Act, an overall company group is a basic company group that is not a subset of any other basic company group. When company in existence (5) For the purposes of this section, a company is taken to be in existence if it has been incorporated and has not been dissolved. 2BA Designated company groups (1) This section sets out the method for identifying a designated company group for the purposes of this Act. (2) First, identify a particular overall company group. (3) Second, identify all of the members of the overall company group that are entitled to derive assessable receipts in relation to a petroleum project (whether or not the same petroleum project). These members constitute a provisional designated company group. (4) Third, if the following conditions are satisfied in relation to a company (the key company): (a) the key company is a member of the provisional designated company group; (b) the key company is not a subsidiary of any other company in the provisional designated company group; (c) each other company in the provisional designated company group is a subsidiary of the key company; then: (d) the provisional designated company group is a designated company group; and (e) the key company is the head company of that designated company group. (5) Fourth, if: (a) subsection (4) does not apply; and (b) each company in the provisional designated company group is a subsidiary of another company (the key company) that: (i) is a member of the overall company group; and (ii) is not a member of the provisional designated company group; then: (c) both: (i) the key company; and (ii) the members of the provisional designated company group; constitute a designated company group; and (d) the key company is the head company of that designated company group. (6) Subsection (5) has effect subject to subsection (7). (7) If: (a) a designated company group is covered by subsection (5); and (b) the head company of the designated company group is a subsidiary of another company (the higher‑tier company); and (c) the higher‑tier company is a member of the overall company group; and (d) the higher‑tier company is not a member of the provisional designated company group; there is taken not to be a designated company group of which: (e) the higher‑tier company is the head company; and (f) any member of the provisional designated company group is a member. 2C Greater Sunrise apportionments (1) For the purposes of this Act, current apportionment percentage means the percentage applying from time to time under the definition of current apportionment percentage in subsection 286(4) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. (2) For the purposes of this Act, apportionment percentage figure, in relation to a year of tax, means: (a) if the current apportionment percentage did not change during the year of tax—the numerator of the fraction with a denominator of 100 that represents the current apportionment percentage that applied during that year; or (b) if the current apportionment percentage changed during the year of tax—means the amount worked out using the following formula: where: days in tax year means the number of days in the year of tax. first % figure, in relation to a year of tax in which the current apportionment percentage changed, means the numerator of the fraction with a denominator of 100 that represents the current apportionment percentage applying before the change. prior days, in relation to a year of tax in which the current apportionment percentage changed, means the number of days in that year before the current apportionment percentage changed. second % figure, in relation to a year of tax in which the current apportionment percentage changed, means the numerator of the fraction with a denominator of 100 that represents the current apportionment percentage applying after the change. subsequent days, in relation to a year of tax in which the current apportionment percentage changed, means the number of days in that year from and including the day on which the current apportionment percentage changed. (3) For the purposes of this Act, apportionment percentage figure, in relation to a period of days that is not a year of tax, means the amount worked out under subsection (2) as if the period were a year of tax. 2D Future closing‑down expenditure (1) A person has future closing‑down expenditure in relation to a petroleum project if: (a) the project terminates on the cessation of one or more production licences; and (b) on that termination, an infrastructure licence comes into force, or continues in force, permitting the use of any part (the licensed property) of the operation, facilities and other things that comprised the project immediately before the termination; and (c) but for the continued use of the licensed property (as permitted by the infrastructure licence) after that termination, the person would have incurred closing‑down expenditure in relation to the project, with respect to the licensed property. (2) The amount of the person's future closing‑down expenditure is worked out as follows: where: bond rate is the long‑term bond rate in relation to the financial year during which the project terminates. future closing‑down costs is the payments (not being excluded expenditure), whether of a capital or revenue nature, that the person would expect: (a) the person; or (b) another person who becomes responsible for carrying on operations involved in closing down the licensed property; to be liable to make in carrying on operations involved in closing down the licensed property. It includes any environmental restoration as a consequence of closing down the licensed property. years of operation is the number of years after the termination of the project over which the licensed property is expected to be used as permitted by the infrastructure licence. (3) For the purposes of the definition of future closing‑down costs in subsection (2), if the person intends to make alterations or additions to the licensed property after the termination of the project, the payments referred to in that definition are to be disregarded to the extent that they relate to the alterations or additions. (4) In subsection (2): year means a period of 12 months. Example: On the termination of a petroleum project and the coming into force of an infrastructure licence, a person has future closing‑down costs of $1 million. The licensed property is expected to be used as permitted by the infrastructure licence for 10 years, and the bond rate in relation to the financial year in question is 5%. The amount of the person's future closing‑down expenditure is: 2E Marketable petroleum commodity (1) A marketable petroleum commodity is a product listed in subsection (2) that: (a) is produced from petroleum for the purpose of: (i) sale; or (ii) use as a feedstock for conversion to another product (whether a product listed in subsection (2) or not); or (iii) direct consumption as energy; and (b) is in its final form for that purpose. (2) The products are as follows: (a) stabilised crude oil; (b) sales gas; (c) condensate; (d) liquefied petroleum gas; (e) ethane; (ea) shale oil; (f) any other product specified in regulations made for the purposes of this paragraph. (3) However, a product cannot be a marketable petroleum commodity if it has been produced wholly or partly from a product that was a marketable petroleum commodity. 3 Petroleum pools (1) Where, for the purposes of the Offshore Petroleum and Greenhouse Gas Storage Act 2006, petroleum recovered from a petroleum pool, within the meaning of that Act, is taken by Division 3 of Part 1.2 of that Act to have been recovered from a particular area or from particular areas in particular proportions, the petroleum shall be taken for the purposes of this Act to have been recovered from that area, or from those areas in those proportions, as the case may be. (2) If, for the purposes of the Offshore Petroleum and Greenhouse Gas Storage Act 2006, petroleum recovered from a part of the seabed is taken by subsection 54(1E) of that Act to have been recovered from a particular area or from particular areas in particular proportions, the petroleum is taken for the purposes of this Act to have been recovered from that area, or from those areas in those proportions, as the case may be. 4 Relationship between licences, permits and leases etc. (1) For the purposes of this Act: (a) a production licence shall be taken to be related to an exploration permit if: (i) because of the grant of the production licence, the exploration permit ceased to be in force in respect of the block or blocks in respect of which the production licence was granted; or (ii) because of the grant of the production licence, a retention lease that was related to the exploration permit ceased to be in force in respect of the block or blocks in respect of which the production licence was granted; (b) a retention lease shall be taken to be related to an exploration permit if, because of the grant of the retention lease, the exploration permit ceased to be in force in respect of the block or blocks in respect of which the retention lease was granted; (c) a production licence shall be taken to be related to a retention lease if, because of the grant of the production licence, the retention lease ceased to be in force in respect of the block or blocks in respect of which the production licence was granted; and (d) where an exploration permit, retention lease or production licence (which permit, lease or licence is in this paragraph referred to as the original authority) is or was renewed, the renewed permit, lease or licence shall be taken to be a continuation of the original authority notwithstanding that the renewal may not have been granted in respect of all of the blocks in respect of which the original authority was granted. (2) For the purposes of this Act: (a) a production licence is derived from an exploration permit if the licence is related to the permit because of subparagraph (1)(a)(i); and (b) a production licence is derived from a retention lease if the licence is related to the lease. 4A Holding an interest—petroleum project Petroleum projects generally (1) For the purposes of this Act, a person is taken to have held, at a particular time, an interest in, or in relation to, a petroleum project if the person was, at that time, entitled to receive receipts from the sale of petroleum, or of marketable petroleum commodities produced from petroleum, recovered from: (a) if the time is a time after the production licence in relation to the project came into force—the production licence area in relation to the project; or (b) if the time is a time before the production licence in relation to the project came into force—a pre‑licence area in relation to the production licence. (2) However, subsection (1) does not apply if the project is a combined project, the Bass Strait project or the North West Shelf project. Combined projects (3) For the purposes of this Act, a person is taken to have held, at a particular time, an interest in, or in relation to, a combined project if the person was, at that time, entitled to receive receipts from the sale of petroleum, or of marketable petroleum commodities produced from petroleum, recovered from: (a) if the time is a time after the project combination certificate came into force—the production licence areas in relation to the project; or (b) if the time is a time before the project combination certificate came into force: (i) any production licence areas in relation to pre‑combination projects relating to the combined project; or (ii) any pre‑licence areas in relation to any of those pre‑combination projects. The Bass Strait project and the North West Shelf project (4) For the purposes of this Act, a person is taken to have held, at a particular time, an interest in, or in relation to,: (a) the Bass Strait project; or (b) the North West Shelf project; if the person was, at that time, entitled to receive receipts from the sale of petroleum, or of marketable petroleum commodities produced from petroleum, recovered from any of the production licence areas in relation to that project. 4B Holding an interest—exploration permit For the purposes of this Act, a person is taken to have held an interest in, or in relation to, an exploration permit at a particular time if the person was, at that time, entitled to receive receipts from the sale of petroleum, or marketable petroleum commodities produced from petroleum, recovered from the exploration permit area. 4C Holding an interest—retention lease For the purposes of this Act, a person is taken to have held an interest in, or in relation to, a retention lease at a particular time if the person was, at that time, entitled to receive receipts from the sale of petroleum, or marketable petroleum commodities produced from petroleum, recovered from: (a) if the time is a time after the retention lease was granted—the retention lease area; or (b) if the time is a time before the retention lease was granted—the exploration permit area of the exploration permit to which the retention lease is related. 5 Petroleum exploration and recovery in relation to certain areas Pre‑1 July 2008 petroleum project (1) For the purposes of the application of this Act (including this section) to a pre‑1 July 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, a production licence area, an exploration permit area or a retention lease area is a reference to exploration for petroleum in, or recovery of petroleum from, the production licence area, the exploration permit area or the retention lease area while the production licence, exploration permit or retention lease concerned is or was in force. (2) For the purposes of the application of this Act to a pre‑1 July 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, the eligible exploration or recovery area in relation to a petroleum project is a reference to exploration for petroleum in, or recovery of petroleum from: (a) where the production licence or any production licence in relation to the project is a permit derived production licence—the exploration permit area in relation to the exploration permit to which the production licence is related (being exploration or recovery occurring either before or after the production licence came into force but not after marketable petroleum commodities cease, otherwise than temporarily, to be produced in relation to the project); (b) where the production licence or any production licence in relation to the project is a lease derived production licence—the retention lease area in relation to the retention lease to which the production licence is related (being exploration or recovery occurring either before or after the production licence came into force but not after marketable petroleum commodities cease, otherwise than temporarily, to be produced in relation to the project); and (c) the production licence area of the production licence, or the production licence areas of the production licences, in respect of the project. (3) For the purposes of subsections (1) and (2), where, at a time when no permit derived production licence in relation to an exploration permit is in force, a retention lease that is related to the exploration permit comes into force, any exploration for, or recovery of, petroleum that occurred while the exploration permit was in force in the block or blocks in respect of which the retention lease was granted and during the period: (a) where paragraph (b) does not apply—before the retention lease came into force; or (b) where, before the retention lease came into force, a permit derived production licence, or permit derived production licences, in relation to the exploration permit were in force—after that production licence or all of those production licences, as the case may be, ceased to be in force and before the retention lease came into force; shall be taken to have occurred in the retention lease area and not in the exploration permit area notwithstanding that the retention lease was not in force at that time. (4) For the purposes of subsection (2), where, but for this subsection, the same exploration for petroleum or recovery of petroleum would be exploration for petroleum in, or recovery of petroleum from, the exploration permit area or the retention lease area in relation to 2 or more production licences, the exploration or recovery shall be taken to relate only to the production licence that first came into force. Post‑30 June 2008 petroleum project (5) For the purposes of the application of this Act (including this section) to a post‑30 June 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, a production licence area, an exploration permit area or a retention lease area is a reference to exploration for petroleum in, or recovery of petroleum from, the production licence area, the exploration permit area or the retention lease area while the production licence, exploration permit or retention lease concerned is or was in force. (6) For the purposes of the application of this Act to a post‑30 June 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, the eligible exploration or recovery area in relation to a petroleum project is a reference to: (a) if the production licence, or any production licence, in relation to the project is a production licence (in this paragraph called the current production licence) derived from an exploration permit (in this paragraph called the prior exploration permit)—exploration for petroleum in, or recovery of petroleum from, the exploration permit area of the prior exploration permit, where the exploration or recovery occurred: (i) before the current production licence came into force; and (ii) if, before the current production licence came into force, there came into force one or more retention leases, or one or more other production licences, derived from the prior exploration permit—after whichever of those retention leases or other production licences last came into force before the current production licence came into force; and (b) if the production licence, or any production licence, in relation to the project is a production licence (in this paragraph called the current production licence) derived from a retention lease (in this paragraph called the prior retention lease)—exploration for petroleum in, or recovery of petroleum from, the retention lease area of the prior retention lease, where the exploration or recovery occurred before the current production licence came into force; and (c) if: (i) the production licence, or any production licence, in relation to the project is a production licence (in this paragraph called the current production licence) derived from a retention lease (in this paragraph called the prior retention lease); and (ii) the prior retention lease was derived from an exploration permit (in this paragraph called the prior exploration permit); exploration for petroleum in, or recovery of petroleum from, the exploration permit area of the prior exploration permit, where the exploration or recovery occurred: (iii) before the prior retention lease came into force; and (iv) if, before the prior retention lease came into force, there came into force one or more other production licences, or one or more other retention leases, derived from the prior exploration permit—after whichever of those other retention leases or other production licences last came into force before the prior retention lease came into force; and (d) exploration for petroleum in, or recovery of petroleum from, the production licence area of the production licence, or the production licence areas of the production licences, in respect of the project. (7) If: (a) paragraph (6)(c) applies to a post‑30 June 2008 petroleum project; and (b) the prior retention lease mentioned in that paragraph is one of a set of 2 or more retention leases that: (i) came into force at the same time; and (ii) were derived from the prior exploration permit mentioned in that paragraph; and (c) the production licence, or the production licences, in relation to one or more other post‑30 June 2008 petroleum projects were derived from one or more of the retention leases included in the set mentioned in paragraph (b) of this subsection; and (d) exploration expenditure incurred in relation to the petroleum project mentioned in paragraph (a) of this subsection is attributable to exploration for petroleum in, or recovery of petroleum from, the exploration permit area of the prior exploration permit; then, for the purposes of the application of this Act to the petroleum project mentioned in paragraph (a) of this subsection, the amount of the exploration expenditure mentioned in paragraph (d) of this subsection is taken to be the amount worked out using the following formula: where: number of retention leases relating to the petroleum project mentioned in paragraph (a) of this subsection means the number of retention leases: (a) from which the production licence, or the production licences, in relation to the petroleum project mentioned in paragraph (a) of this subsection were derived; and (b) that are included in the set mentioned in paragraph (b) of this subsection. total number of retention leases means the number of retention leases that are included in the set mentioned in paragraph (b) of this subsection. unadjusted amount of exploration expenditure means the amount that, apart from this subsection, is the amount of the exploration expenditure mentioned in paragraph (d) of this subsection. 6 Termination of use of property in relation to a petroleum project For the purposes of this Act: (a) a termination of the use of all property in relation to a petroleum project shall be taken to occur where the production licence or all of the production licences in relation to the project cease to be in force; and (b) no termination of the use of property in relation to a petroleum project shall be taken to occur by reason of the specifying of the production licence or production licences in relation to the project in a project combination certificate. 7 Property installed ready for use Where property is installed ready for use for a purpose and held in reserve, the property shall, for the purposes of this Act, be taken to be being used for that purpose. 8 Consideration not in cash For the purposes of this Act, where, upon any transaction, any consideration is liable to be given by way of the provision of property (other than money), the money value of that consideration shall be deemed to have been liable to be given. 9 Amounts credited, reinvested etc. to be taken to be receivable An amount shall be taken to have been receivable by a person although it is not actually to be paid over to the person but is to be reinvested, accumulated, capitalised, carried to any reserve, sinking fund or insurance fund however designated, or otherwise dealt with on behalf of the person or as the person directs. 10 Translation of amounts into Australian currency (1) For the purposes of this Act, an amount in a foreign currency is to be translated into Australian currency. Examples of an amount (2) The following are examples of an amount: (a) an amount of an expense; (b) an amount of an obligation; (c) an amount of a liability; (d) an amount of a receipt; (e) an amount of a payment; (f) an amount of consideration; (g) a value. Translation rule—assessable receipt (3) If: (a) a person derives an assessable receipt in relation to a petroleum project; and (b) the receipt is in a foreign currency; the receipt is to be translated into Australian currency at the exchange rate applicable at the time when the receipt is derived. Translation rule—eligible real expenditure (4) If: (a) a person incurs eligible real expenditure in relation to a petroleum project; and (b) the expenditure is in a foreign currency; the expenditure is to be translated into Australian currency at the exchange rate applicable at the time when the expenditure is incurred. Translation rule—transfer of entire entitlement to assessable receipts (5) If: (a) section 48 applies in relation to a transaction; and (b) a person is a purchaser (within the meaning of section 48) in relation to the transaction; and (c) the person is taken, under section 48, to have derived or incurred an amount; and (d) the vendor (within the meaning of section 48) in relation to the transaction has made an election under section 58B (functional currency); and (e) the election is in effect for the year of tax in which the transfer time (within the meaning of section 48) occurred; and (f) the amount is in the vendor's applicable functional currency; the amount is to be translated from the applicable functional currency into Australian currency at the exchange rate applicable at the transfer time (within the meaning of section 48). Translation rule—transfer of part of entitlement to assessable receipts (6) If: (a) section 48A applies in relation to a transaction; and (b) a person is a purchaser (within the meaning of section 48A) in relation to the transaction; and (c) the person is taken, under section 48A, to have derived or incurred an amount; and (d) the vendor (within the meaning of section 48A) in relation to the transaction has made an election under section 58B (functional currency); and (e) the election is in effect for the year of tax in which the transfer time (within the meaning of section 48A) occurred; and (f) the amount is in the vendor's applicable functional currency; the amount is to be translated from the applicable functional currency into Australian currency at the exchange rate applicable at the transfer time (within the meaning of section 48A). Operation of functional currency provisions unaffected (7) This section does not affect the operation of Division 7 of Part V (functional currency). 11 Residence (1) For the purposes of this Act, a person shall be taken to have been a non‑resident at a particular time if the person was not a resident of Australia at that time. (2) For the purposes of this Act, a person shall be taken to have been a resident of Australia at a particular time if: (a) in the case of a natural person: (i) the person resided in Australia at that time; or (ii) except in a case where the Commissioner is satisfied that that person's permanent place of residence at that time was outside Australia—the person was domiciled in Australia at that time; (b) in the case of a body corporate: (i) the body was incorporated in Australia at that time; or (ii) at that time the body corporate carried on business in Australia and: (A) had its central management and control in Australia; or (B) had its voting power controlled by shareholders who were residents of Australia; or (c) in the case of a partnership or an unincorporated association—any member of the partnership or association was a resident of Australia at that time by virtue of paragraph (a) or (b). 12 Partnerships (1) Subject to this section, this Act applies to a partnership as if the partnership were a person. (2) Where, but for this subsection, an obligation would be imposed on a partnership by virtue of the operation of subsection (1), the obligation is imposed on each partner, but may be discharged by any of the partners. (3) Where, by virtue of the operation of subsection (1), an amount is payable under this Act by a partnership, the partners are jointly and severally liable to pay that amount. (4) Where, by virtue of the operation of subsection (1), an offence against this Act is deemed to have been committed by a partnership, that offence shall be deemed to have been committed by each of the partners. (5) In a prosecution of a person for an offence by virtue of this section, it is a defence if the person proves that the person: (a) did not aid, abet, counsel or procure the act or omission by virtue of which the offence is deemed to have been committed; and (b) was not in any w