Australia: Greenfields mining tax incentives; registration due 30 September

Greenfields mining tax incentives in Australia

Taxpayers eligible for the exploration development incentive (EDI)—tax incentive measures aimed at encouraging exploration in Australian greenfields mining projects—must file their registration applications with the Australian Taxation Office by 30 September 2015.

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Broadly, the EDI allows companies that participate in the system to convert tax losses into EDI credits, which may be passed through to Australian resident shareholders—either as a refundable tax offset or franking credit depending on the investor profile.

The EDI is limited to companies that are greenfields minerals explorers and have incurred greenfields minerals expenditure. A key threshold requirement to be a greenfields minerals explorer is that the entity (or any associate) has not conducted any mining operations during the current or previous income year.

Whether the expenditure qualifies as greenfields minerals expenditure also needs to be considered—for example, the EDI does not apply to expenditure on areas where a mineral resource has already been identified. The EDI is currently operating as a three-year trial and EDI credits are currently capped at AUS $100 million to be spread over the three-year period.

 

Read a September 2015 report prepared by the KPMG member firm in Australia: Exploration Development Incentive: are you eligible? Register by 30 September

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