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09 Feb 099 Bringing forward deductions to rehabilitate a mine site - TA 2009/3

On 5 February 2009, the ATO issued Taxpayer Alert TA 2009/3 entitled "Bringing forward deductions to rehabilitate a mine site". Under the arrangements referred to in the Taxpayer Alert, a mining company pays an offshore entity to agree to carry out the mine site rehabilitation in the future. They may also use intermediaries or related entities, frequently based in a tax haven, to retain control of the funds. While the mining company seeks an immediate tax deduction for the payment of services, the offshore entity doesn’t declare the payment at the time it is received.

In a media release issued the same day, the Commissioner, Michael D’Ascenzo, warned mining companies to be cautious before entering into arrangements that allow them to claim an immediate deduction for future obligations to rehabilitate a mine site.

For a copy of TA 2009/3, go here.

For a copy of the ATO media release, No 2009/08, 5 February 2009, go here.

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