Source: Australian Tax Forum Journal Article
Published Date: 1 Oct 2019
Income tax subsequent to a resource rent tax (RRT) in the production phase of petroleum resource projects where the risk of losing RRT deductions is low should, in order to maintain the RRT's neutral impact, be applied: first, to pre'taxes cash flow cut by the RRT tax rate; and, second, to the minimal-risk assets created by substitution of RRT loss carry'forward (with long'term government bond rate (LTBR) uplift) for immediate cash rebates for losses. Absent income tax on the minimal'risk assets, RRT loss uplift would be set at a post'income tax level. Leaving the minimal'risk assets embedded in aggregate post'RRT flows for income tax purposes, as under traditional RRT design, justifies uplift at pre'tax LTBR but, compared to ideal assimilation of RRT and income tax, imposes investment distortions and, potentially, greater income tax impost on investors.
Sorry, this is subscriber only content.
To gain access to this material and much more - Subscribe Now.
(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).
Already a Subscriber? Login now
The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.
Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.
The Tax Institute
(ABN 45 008 392 372 (PRV14016))
The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009.
All materials provided on this site are protected by copyright and are owned by or licensed to TTI.
Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.