On 10 October 2014, Treasury released for comment draft legislation to implement the Government’s election commitment to provide an Exploration Development Incentive.
The proposed Exploration Development Incentive would be available to Australian-resident investors in small mineral exploration companies. Under the incentive, investors may be entitled to the EDI tax offset or additional franking credits where the company in which they are a member issues them an exploration credit.
Companies may issue exploration credits to their shareholders up to a capped amount in an income year, with the cap for a company based on the company’s exploration expenditure and tax loss for the relevant income year, adjusted by a modulation factor to ensure that the total value of credits provided in respect of an income year does not exceed $25m in respect of 2014-15, $35m for 2015-16 and $40m for 2016-17.
COMMENTS are due by 24 October 2014.
[LTN 197, 13/10/14]