On 14 May 2013 the Deputy Prime Minister and Treasurer announced a package of reforms to protect the corporate tax base from erosion and loopholes.
One area of reform relates to a tax concession that is meant to support genuine exploration but is instead being claimed for the costs of acquiring mining rights and information, where the price paid reflects the value of natural resources that have already been discovered.
The Government will better target this immediate deduction for expenditure on depreciating assets first used in exploration so that it supports genuine exploration activity. This will help ensure the sustainability of this important concession for the resources industry.
The majority of expenditure on depreciating assets first used for exploration will continue to benefit from an immediate deduction, maintaining support for genuine exploration activity, which is typically high-risk.
The proposals paper Targeting the immediate deduction for mining rights and information first used for exploration describes these proposed changes to the tax law. The purpose of this consultation is to provide interested parties with an opportunity to provide feedback on the proposals paper. This feedback is valuable in ensuring the effective implementation of this measure.