The Government has released draft legislation and explanatory material for the proposed amendments to extend the immediate deductibility of exploration expenditure provided to mining and petroleum explorers to geothermal energy explorers. This had been announced on 24 March 2011. The proposed amendments to the ITAA 1997 are designed to allow geothermal energy explorers to deduct immediately the cost of the tangible and intangible depreciating assets they acquire if they first use the assets for exploration and prospecting provided certain criteria are met. The draft legislation is on the Treasury website.
Geothermal energy explorers would be entitled to equivalent treatment for their exploration or prospecting expenditure incurred on or after 1 July 2012 as that extended to mining and petroleum explorers. This includes an immediate tax deduction for the cost of depreciating assets first used for exploration or prospecting on or after 1 July 2012, provided certain criteria are met.
DATE OF EFFECT: applies to depreciating assets first used for geothermal energy exploration or prospecting on or after 1 July 2012 and expenditure incurred on geothermal energy exploration or prospecting on or after 1 July 2012.
COMMENTS are due by 22 June 2012.
[LTN 101, 28/5]