Private ruling: 40-730 deduction
Published: November 2012
Date scheme commenced: ACo is a mining company that has incurred expenditure in respect of feasibility studies in relation to a transportation joint venture project.

Ruling: Q1: Whether the expenditure is deductible under section 8-1of the ITAA 1997? | A1: No | Q2: Whether the expenditure will be deductible under Subdivision 40-H of the ITAA 1997? | A2: No | Q3: Whether the expenditure will be deductible under Subdivision 40-I of the ITAA 1997? | A3: Yes

Relevant facts and circumstances: ACo is a mining company that has incurred expenditure in respect of feasibility studies in relation to a transportation joint venture project.

Relevant legislative provisions: Subdivision 40-I of the ITAA 1997

Reasons for decision: Detailed Reasoning - Detailed reasoning: ACo's expenditure is capital in nature as it secures a long term advantage and therefore it will not be deductible under section 8-1 of the ITAA 1997. | Detailed Reasoning - Question 2: Whether the expenditure will be deductible under Subdivision 40-H of the ITAA 1997? | Detailed Reasoning - Detailed reasoning: ACo's costs in respect of the feasibility studies will not be deductible pursuant to section 40-730 of the ITAA 1997 as it does not constitute exploration or prospecting as defined. | Detailed Reasoning - Question 3: Whether the expenditure will be deductible under Subdivision 40-I of the ITAA 1997? | Detailed Reasoning - Detailed reasoning: ACo's expenditure meets the requirements of Subdivision 40-I of the ITAA 1997 as it constitutes a project amount, and it will be deductible under this subdivision.

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