Petroleum Resource Rent Tax Assessment Act 1987

s 1 — Defined terms

In this Schedule: exploration right means an exploration permit or a retention lease. financial year means the financial year starting on 1 July 1990 or a later financial year. finishing day means: (a) in relation to a petroleum project—the first day on which there is no longer in force any production licence in relation to the project; or (b) in relation to an exploration permit or retention lease—the day on which the permit or lease ceases to be in force. GDP expenditure year , in relation to a petroleum project, means a financial year that ended before the first standard uplift expenditure year in relation to the project. incurred exploration expenditure amount , in relation to a petroleum project that is not a combined project and in relation to a financial year, means the sum of the following: (a) any amounts of exploration expenditure (other than designated frontier expenditure) actually incurred by the person in the financial year in relation to the project; (b) any amounts of uplifted frontier expenditure that the person is taken by section 36C to have incurred in the financial year in relation to the project; (c) any amounts of expenditure that the person is taken by subparagraph 48(1)(a)(ia) or paragraph 48A(5)(c) to have incurred in the financial year in relation to the project. Note: The effect of subsections 35A(2), 35B(2) and 45D(3) must be taken into account when working out an incurred exploration expenditure amount. incurred exploration expenditure amount , in relation to a petroleum project that is a combined project and in relation to a financial year, means the sum of the following: (a) any amounts of: (i) exploration expenditure (other than designated frontier expenditure) actually incurred by the person; and (ii) uplifted frontier expenditure that the person is taken by section 36C to have incurred; in the financial year in relation to the project (not being amounts incurred before the project combination certificate in relation to the project came into force); (b) any amounts of expenditure that the person is taken by subparagraph 48(1)(a)(ia) or paragraph 48A(5)(c) to have incurred in the financial year in relation to the project; (c) if the project combination certificate came into force during the financial year: (i) any amounts of exploration expenditure (other than designated frontier expenditure) actually incurred by the person in the financial year; and (ii) any amounts of uplifted frontier expenditure that the person is taken by section 36C to have incurred in the financial year; and (iii) any amounts of exploration expenditure that the person is taken by section 48 or 48A to have incurred in the financial year; in relation to the pre ‑ combination projects. Note: The effect of subsections 35A(2), 35B(2) and 45D(3) must be taken into account when working out an incurred exploration expenditure amount. relevant pre ‑ commencement day , in relation to a petroleum project, means: (a) if the petroleum project is not a combined project, the Bass Strait project or the North West Shelf project—the day occurring 5 years before the earlier of the following: (i) the day specified in the production licence notice in relation to the project; (ii) the day the production licence was issued in relation to the project; or (b) if the petroleum project is a combined project—the day occurring 5 years before the earlier of the following: (i) the earliest day specified in a production licence notice in relation to a pre ‑ combination project in relation to the project; (ii) the earliest day a production licence was issued in relation to a pre ‑ combination project in relation to the project; or (c) if the petroleum project is the Bass Strait project or the North West Shelf project—the day occurring 5 years before the earlier of the following: (i) the earliest day specified in a production licence notice in relation to the project; (ii) the earliest day a production licence was issued in relation to the project. standard uplift expenditure year , in relation to a petroleum project, means the earlier of the following financial years and each financial year after that financial year: (a) the financial year in which the relevant pre ‑ commencement day occurred; (b) the financial year that starts on 1 July 2019. starting day means: (a) in relation to a petroleum project other than a combined project, the Bass Strait project or the North West Shelf project—the day on which the exploration permit to which the production licence comprising the project is related was granted; or (b) in relation to a combined project—the earliest of the days that, but for the issue of the project combination certificate, would have been starting days in relation to such of the pre ‑ combination projects as were not combined projects; or (c) in relation to the Bass Strait project—the day on which the Bass Strait exploration permit was granted; or (ca) in relation to the North West Shelf project—the earlier of the day on which the exploration permit known as WA ‑ 1 ‑ P was granted and the day on which the exploration permit known as WA ‑ 28 ‑ P was granted; or (d) in relation to an exploration right that is an exploration permit—the day on which the exploration permit was granted; or (e) in relation to an exploration right that is a retention lease—the day on which the exploration permit to which the retention lease is related was granted.

s 1A — Application of the Criminal Code

Chapter 2 of the Criminal Code applies to all offences against this Act. Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

Amendment history: Inserted by No 146 of 2001, effective s 4 and Sch 4 (items 102–115): 15 Dec 2001 (s 2(1))

s 2 — Defined terms

In this Act, unless the contrary intention appears: Aboriginal person has the meaning given by subsection 4(1) of the Aboriginal and Torres Strait Islander Act 2005 . access authority means a petroleum access authority within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . accounts includes: (a) ledgers; and (b) journals; and (c) statements of financial performance; and (d) profit and loss accounts; and (e) balance ‑ sheets; and (f) statements of financial position; and also includes statements, reports and notes attached to, or intended to be read with, anything covered by any of the above paragraphs. acquisition has the meaning given by section 195 ‑ 1 of the GST Act. agent includes: (a) a person who, for and on behalf of a person out of Australia, has the management or control in Australia of the whole or a part of a business of the second ‑ mentioned person; and (b) a person declared by the Commissioner, by notice in writing served on the person, to be an agent or the sole agent of a person for the purposes of this Act. annual transfer has the meaning given by subsection 45E(4). applicable commencement date , in relation to a petroleum project, means: (a) unless paragraph (b) or (c) applies—1 July 1986; or (b) if the project is the Bass Strait project, or if the Bass Strait project is a pre ‑ combination project in relation to the project—1 July 1990; or (c) if the project is the North West Shelf project—1 July 2012. applicable foreign currency has the meaning given by section 58C. apportionment percentage figure : (a) in relation to a year of tax—has the meaning given by subsection 2C(2); and (b) in relation to any other period—has the meaning given by subsection 2C(3). approved form has the meaning given by section 388 ‑ 50 in Schedule 1 to the Taxation Administration Act 1953 . Note: Forms previously approved by the Commissioner under this Act continue in effect : see item 230 of Schedule 10 to the Tax Laws Amendment (2004 Measures No. 7) Act 2005 . assessment means the ascertainment of the amount of a person’s taxable profit (or that a person has no taxable profit) in relation to a year of tax and a petroleum project, and of the tax payable on that amount (or that no tax is payable). Australia , when used in a geographical sense, has the same meaning as in the Income Tax Assessment Act 1997 . Australian law has the meaning given by subsection 995 ‑ 1(1) of the Income Tax Assessment Act 1997 . basic company group has the meaning given by section 2B. Bass Strait exploration permit means the exploration permit known as VIC/P1. Bass Strait project means the petroleum project referred to in subsection 19(1A). block has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . combined project means a petroleum project to which subsection 19(2) applies. Commissioner means the Commissioner of Taxation. company means a body corporate that has a share capital. condensate means a mixture that includes pentane and hexane, where the pentane and hexane comprise more than 50% by weight of the mixture. creditable purpose has the meaning given by section 195 ‑ 1 of the GST Act. current apportionment percentage has the meaning given by subsection 2C(1). decreasing adjustment has the meaning given by section 195 ‑ 1 of the GST Act. Deputy Commissioner means a Deputy Commissioner of Taxation. designated company group has the meaning given by section 2BA. designated frontier area means that block or those blocks that constitute both: (a) an area or part of an area: (i) specified in section 36A; or (ii) specified in an instrument made under subsection 36B(1); and (b) an exploration permit area. designated frontier expenditure , in relation to a petroleum project and a financial year, means exploration expenditure that is actually incurred: (a) by a person in that year where the eligible exploration or recovery area in relation to the project is a designated frontier area; and (b) during the original period of the exploration permit concerned (before the permit is first renewed or ceases to be in force); other than exploration expenditure that is incurred in evaluating or delineating a petroleum pool (within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 ) that has been discovered in a designated frontier area. eligible real expenditure means exploration expenditure, general project expenditure, resource tax expenditure, starting base expenditure or closing ‑ down expenditure. employee amenities means housing, health, educational, recreational, welfare or other similar facilities and services for, or facilities and services involved in the supply of meals to, employees or dependants of employees, not being facilities and services conducted for the purpose of profit ‑ making. excess closing ‑ down expenditure has the meaning given by paragraph 46(1)(a). excluded commodity means a marketable petroleum commodity that: (a) has been sold; (b) after being produced, has been further processed or treated; (c) has been moved away from the place of its production other than to a storage site adjacent to that place; or (d) has been moved away from a storage site adjacent to the place of its production. excluded fee means an amount of a kind referred to in paragraph 113(1)(c), subsection 115(5), paragraph 118(1)(c), subsection 178(4) or paragraph 181(1)(c) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . exploration permit means a petroleum exploration permit within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . exploration permit area means a petroleum exploration permit area within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . external petroleum , in relation to a petroleum project, means petroleum, or constituents of petroleum, recovered from an area or areas other than the production licence area or production licence areas in relation to the project. facilities means land, buildings, plant, equipment and other facilities. financial year means any financial year that commenced or commences on or after 1 July 1979. foreign currency means a currency other than Australian currency. future closing ‑ down expenditure has the meaning given by section 2D. GDP factor , in relation to a financial year, means the GDP factor for the financial year worked out in accordance with section 2A. general interest charge means the charge worked out under Part IIA of the Taxation Administration Act 1953 . Greater Sunrise project means a petroleum project for the recovery of petroleum from one or more of the Greater Sunrise unit reservoirs. Greater Sunrise unit area has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . Greater Sunrise unit reservoirs has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . group company has the meaning given by section 2B. GST has the meaning given by section 195 ‑ 1 of the GST Act. GST Act means the A New Tax System (Goods and Services Tax) Act 1999 . head company , of a designated company group, has the meaning given by section 2BA. holder of a registered interest , in relation to a production licence, means a person holding an interest in the production licence, being an interest created by a dealing in relation to which an entry has been made under subsection 494(3) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . increasing adjustment has the meaning given by section 195 ‑ 1 of the GST Act. ineligible project , in relation to a financial year, means a petroleum project that is a pre ‑ combination project by virtue of the issue of a project combination certificate during the financial year. infrastructure licence has the meaning given by section 7 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . input tax credit has the meaning given by section 195 ‑ 1 of the GST Act. instalment of tax means an instalment of tax payable under Division 2 of Part VIII. instalment percentage , in relation to an instalment period in a year of tax, means: (a) in the case of the first instalment period in the year of tax—25%; (b) in the case of the second instalment period in the year of tax—50%; and (c) in the case of the third instalment period in the year of tax—75%. instalment period , in relation to an instalment of tax in a year of tax, means the period commencing at the beginning of the year of tax and ending at the end of the month preceding that in which the instalment is due and payable. instalment transfer has the meaning given by subsection 45E(5). instalment transfer charge period has the meaning given by subsection 98A(4). instalment transfer excess has the meaning given by subsection 98A(1). instalment transfer interest charge has the meaning given by subsection 98A(4). internal petroleum , in relation to a petroleum project, means petroleum, or constituents of petroleum, recovered from the production licence area or production licence areas in relation to the project, where: (a) the petroleum, or the constituents of petroleum, is, or is to be, recovered or processed: (i) by a person entitled to derive assessable receipts in relation to the project; and (ii) for or on behalf of another person who is entitled to derive assessable receipts in relation to the project; or (b) the petroleum, or the constituents of petroleum, is, or is to be, sold: (i) by a person entitled to derive assessable receipts in relation to the project; and (ii) to another person who is entitled to derive assessable receipts in relation to the project. lease derived production licence means a production licence that is derived from a retention lease. liable person has the meaning given by subsection 98A(1). licensed property , in relation to a petroleum project, has the meaning given by paragraph 2D(1)(b). liquefied petroleum gas means a mixture that includes propane and butane, where the propane and butane comprise more than 50% by weight of the mixture. long ‑ term bond rate means: (a) in relation to the financial year commencing on 1 July 1979—0.1066; and (b) in relation to the financial year commencing on 1 July 1980—0.1258; and (c) in relation to the financial year commencing on 1 July 1981—0.1548; and (d) in relation to the financial year commencing on 1 July 1982—0.1443; and (e) in relation to the financial year commencing on 1 July 1983—0.1272; and (f) in relation to the financial year commencing on 1 July 1984—0.1341; and (g) in relation to the financial year commencing on 1 July 1985—0.1365; and (h) in relation to any subsequent financial year that is earlier than the financial year commencing on 1 July 2012—the average, expressed as a decimal fraction, of the assessed secondary market yields in respect of 10 ‑ year non ‑ rebate Treasury bonds published by the Reserve Bank during that year or, if no assessed secondary market yield in respect of bonds of that kind was published by the Reserve Bank during the year, the decimal fraction determined by the Treasurer by notice in writing published in the Gazette for the purposes of this definition in relation to the financial year; and (i) in relation to the financial year commencing on 1 July 2012 and any subsequent financial year—has the same meaning as in subsection 995 ‑ 1(1) of the Income Tax Assessment Act 1997 ; and (j) in relation to a period that is not a financial year—has the same meaning as in subsection 995 ‑ 1(1) of the Income Tax Assessment Act 1997 . marketable petroleum commodity has the meaning given by section 2E. market value , of a commodity, at a particular time, is its market value reduced by an amount equal to the amount of the input tax credit (if any) to which a person would be entitled if: (a) the person had acquired the commodity at that time; and (b) the acquisition had been solely for a creditable purpose. North West Shelf exploration permits means the exploration permits known as WA ‑ 1 ‑ P and WA ‑ 28 ‑ P. North West Shelf project means the petroleum project referred to in subsection 19(1B). notional tax amount has the meaning given by section 97. offence against this Act includes an offence against: (a) the Crimes Act 1914 ; or (b) the Taxation Administration Act 1953 ; relating to this Act. officer means a person appointed or engaged under the Public Service Act 1999 . oil shale means any shale or other rock (other than coal) from which a fluid consisting of or including hydrocarbons may be extracted or produced. overall company group has the meaning given by section 2B. permit derived production licence means a production licence that is derived from an exploration permit. petroleum means: (a) petroleum within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 ; or (b) oil shale. petroleum project or project means a petroleum project within the meaning of subsection 19(1) or (2), and includes the extended meaning given by subsection 19(2B) or (2C). pipeline licence has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . post ‑ 30 June 2008 petroleum project means a petroleum project, where the production licence, or each production licence, in relation to the project came into force after 30 June 2008, and includes the North ‑ West shelf project. pre ‑ 1 July 2008 petroleum project means a petroleum project other than a post ‑ 30 June 2008 petroleum project. pre ‑ combination project , in relation to a combined project, means: (a) any petroleum project that, immediately before the project combination certificate that gave rise to the combined project came into force, was a petroleum project in relation to any one or more of the production licences specified in the certificate; and (b) any petroleum project that is a pre ‑ combination project in relation to another petroleum project that is a pre ‑ combination project in relation to the combined project under paragraph (a) or this paragraph. pre ‑ licence area , in relation to a production licence, means: (a) if the production licence was derived from an exploration permit—the exploration permit area of the exploration permit; or (b) if the production licence was derived from a retention lease—either: (i) the retention lease area of the retention lease; or (ii) the exploration permit area of the exploration permit to which the retention lease is related. processing of external petroleum , in relation to a petroleum project, includes the stabilisation, transportation, storage or recovery of external petroleum in relation to the project. processing of internal petroleum , in relation to a petroleum project, includes the stabilisation, transportation, storage or recovery of internal petroleum in relation to the project. production licence means: (a) a petroleum production licence within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 ; or (b) a lawful authority or right (however described) to undertake activities in the Western Greater Sunrise area for the recovery of petroleum from one or more of the Greater Sunrise unit reservoirs. production licence area means a petroleum production licence area within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and, in relation to a Greater Sunrise project, includes the Western Greater Sunrise area. production licence notice , in relation to a petroleum project, means a notice issued under subsection 258(7) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 in relation to the project. project combination certificate means a certificate under section 20. registered holder has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . re ‑ inject , in relation to a marketable petroleum commodity produced from petroleum recovered from the eligible exploration or recovery area in relation to a petroleum project, means return the commodity to a natural reservoir in: (a) where the return takes place before any production licence in relation to the project comes into force—any area from which the recovery of petroleum would, at the time of the return, constitute recovery of petroleum from the eligible exploration or recovery area in relation to the project; and (b) in any other case—the production licence area or any of the production licence areas in relation to the project. related charge means: (a) shortfall interest charge, or general interest charge, in relation to tax; or (b) instalment transfer interest charge in relation to an instalment of tax. Resources Department means the Department that: (a) deals with matters arising under section 1 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 ; and (b) is administered by the Resources Minister. Resources Minister means the Minister administering section 1 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . retention lease means a petroleum retention lease within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . retention lease area means a petroleum retention lease area within the meaning of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . sales gas means a substance: (a) which is in a gaseous state when at the temperature of 15°C and a pressure of one atmosphere; and (b) which consists of naturally occurring hydrocarbons, or a naturally occurring mixture of hydrocarbons and non ‑ hydrocarbons; and (c) the principal constituent of which is methane; and (d) which: (i) if it is to be used as a feedstock for conversion to another product—has been processed so that it is suitable for that use; or (ii) in any other case—has been processed so that it is suitable for direct consumption as energy. Second Commissioner means a Second Commissioner of Taxation. services means water, light, power, access, communications or other services. shortfall interest charge means the charge worked out under Division 280 in Schedule 1 to the Taxation Administration Act 1953 . starting base amount , in relation to a person’s interest in a petroleum project, means the amount (if any) assessed as the starting base amount in relation to the person’s interest under clause 23 of Schedule 2 as in force before 1 July 2019. subsidiary has the meaning given by section 2B. tax means tax imposed by any of the following: (a) the Petroleum Resource Rent Tax (Imposition—General) Act 2012 ; (b) the Petroleum Resource Rent Tax (Imposition—Customs) Act 2012 ; (c) the Petroleum Resource Rent Tax (Imposition—Excise) Act 2012 . this Act includes: (a) the regulations; and (b) Part IVC of the Taxation Administration Act 1953 , insofar as that Part relates to this Act. Torres Strait Islander has the meaning given by subsection 4(1) of the Aboriginal and Torres Strait Islander Act 2005 . transferable exploration expenditure in relation to a person and a financial year, means expenditure that is, according to Schedule 1, transferable by the person in relation to the financial year. Note 1: the following provisions of Schedule 1 provide for expenditure to be transferable: • paragraph 7(b) • paragraph 8(5)(c) • paragraph 11(b) • paragraph 12(4)(c) • subclause 18(1) • subclause 18(2) • paragraph 18(3)(e). Note 2: Special rules apply in relation to the transfer of Greater Sunrise exploration expenditure: see Part 1A of Schedule 1. Tribunal means the Administrative Review Tribunal. trustee includes: (a) a person appointed or constituted trustee by act of parties, by order or declaration of a court, or by operation of law; or (b) an executor, administrator or other personal representative of a deceased person; or (c) a guardian or committee; or (d) a receiver or receiver and manager; or (e) a liquidator of a company; or (ea) an administrator, within the meaning of the Corporations Act 2001 , of a company; or (eb) an administrator of a deed of company arrangement executed by a company under Part 5.3A of that Act; or (f) a person: (i) having or taking upon himself or herself the administration or control of any real or personal property affected by any express or implied trust; (ii) acting in any fiduciary capacity; or (iii) having the possession, control or management of any real or personal property of a person under any legal or other disability. unincorporated association does not include a joint venture. uplifted frontier expenditure has the meaning given by section 36C. Western Greater Sunrise area has the same meaning as in the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . year of tax , in relation to a person in relation to a petroleum project, means a financial year commencing on or after the applicable commencement date, being: (a) except in a case to which paragraph (b) applies—the first financial year in which assessable petroleum receipts are derived by the person in relation to the project or a subsequent financial year; or (b) if the project is a combined project and the person has, in a financial year before the financial year in which the project combination certificate in relation to the project comes into force, derived assessable petroleum receipts in relation to any of the pre ‑ combination projects in relation to the combined project—the financial year in which the project combination certificate comes into force or a subsequent financial year.

Amendment history: Amended by No 80 of 1991, item 4 | item 5, effective 1 July 1991 | Amended by No 216 of 1991, Sch 4 item 1953 | Sch 4 item 24, effective s 113: 1 Mar 1992 (s 2(10) and gaz 1992, No GN7) s 123 and 124: 24 Dec 1991 (s 2(1)) | Amended by No 210 of 1992, Sch 2 item 185, effective s 1–3: 24 Dec 1992 s 26(2) and 28(1): 1 Feb 1994 s 29–173 and 177: 23 June 1993 (gaz 1993, No S186) Remainder: 1 Feb 1993 (gaz 1993, No S25) | Amended by No 11 of 1999, item 281 | item 346 | item 347 | item 348 | item 349 | item 3 | item 4, effective Sch 1 (items 281–296): 1 July 1999 (s 2(3)) | Amended by No 146 of 1999, Sch 1 item 14 | Sch 1 item 486 | Sch 1 item 615 | Sch 1 item 732 | Sch 1 item 800 | Sch 1 item 911 | Sch 1 item 995, effective Sch 1 (item 732): 5 Dec 1999 (s 2(1), (2)) | Amended by No 177 of 1999, Sch 6 item 52A | Sch 6 item 8 | Sch 6 item 17 | Sch 6 item 7 | Sch 6 item 9 | Sch 6 item 10 | Sch 6 item 11 | Sch 6 item 12 | Sch 6 item 13 | Sch 6 item 14, effective Sch 8 (items 7–18): 1 July 2000 (s 2(9)) | Amended by No 55 of 2001, Sch 6 item 3 | Sch 3 item 15 | Sch 3 item 413 | Sch 3 item 414 | Sch 4 item 1 | Sch 4 item 2 | Sch 4 item 3 | Sch 4 item 4 | Sch 4 item 5 | Sch 4 item 6 | Sch 4 item 7 | Sch 4 item 8 | Sch 4 item 9 | Sch 4 item 10 | Sch 4 item 11 | Sch 4 item 12 | Sch 4 item 13 | Sch 4 item 14 | Sch 4 item 15 | Sch 4 item 16 | Sch 4 item 17 | Sch 4 item 18 | Sch 5 item 5 | Sch 5 item 2 | Sch 5 item 3 | Sch 5 item 4 | Sch 5 item 6 | Sch 5 item 7 | Sch 5 item 8 | Sch 5 item 9 | Sch 5 item 10 | Sch 5 item 11, effective s 4–14 and Sch 3 (items 413–415): 15 July 2001 (s 2(3) and gaz 2001, No S285) | Amended by No 169 of 2001, Sch 6 item 3 | Sch 1 item 1 | Sch 6 item 1 | Sch 6 item 28, effective Sch 1 (items 1–9): 1 Apr 2002 (s 2(3)) Sch 1 (items 10–12, 15): 1 Oct 2001 s 2(1)) | Amended by No 101 of 2003, Sch 5 item 1 | Sch 5 item 4 | Sch 5 item 5 | Sch 6 item 14 | Sch 6 item 28, effective Sch 5: 14 Oct 2003 | Amended by No 47 of 2004, effective Sch 2 (items 1–18): 7 Feb 2007 | Amended by No 41 of 2005, Sch 11 item 22 | Sch 5 item 1 | Sch 5 item 2 | Sch 5 item 3 | Sch 10 item 225 | Sch 10 item 267 | Sch 10 item 269 | Sch 10 item 271 | Sch 11 item 1, effective Sch 5 and Sch 10 (items 225–230): 1 Apr 2005 | Amended by No 17 of 2006, Sch 2 item 73 | Sch 2 item 74 | Sch 2 item 75 | Sch 2 item 76 | Sch 2 item 77 | Sch 2 item 78 | Sch 2 item 79 | Sch 2 item 80 | Sch 2 item 81 | Sch 2 item 82 | Sch 2 item 83 | Sch 2 item 84 | Sch 2 item 85 | Sch 2 item 86 | Sch 2 item 87 | Sch 2 item 95, effective Sch 2 (items 73–96): 1 July 2008 (s 2(1) item 2) | Amended by No 78 of 2006, Sch 1 item 1 | Sch 1 item 2 | Sch 1 item 3 | Sch 1 item 4 | Sch 1 item 5 | Sch 1 item 6 | Sch 3 item 1 | Sch 3 item 2 | Sch 3 item 3 | Sch 3 item 4 | Sch 4 item 1 | Sch 4 item 2 | Sch 4 item 3 | Sch 4 item 67, effective Sch 1 (items 1–10, 12), Sch 2, Sch 3 (items 1, 2, 4–9), Sch 4 (items 1–24, 38) and Sch 5: 1 July 2006 (s 2(1) items 2, 3, 5–11) Sch 3 (item 3): 1 July 2008 (s 2(1) item 4) | Amended by No 101 of 2006, Sch 2 item 1041 | Sch 2 item 1057 | Sch 5 item 27 | Sch 5 item 1 | Sch 5 item 14, effective Sch 2 (items 1017, 1041–1043) and Sch 6 (items 1, 6–11): 14 Sept 2006 | Amended by No 8 of 2007, Sch 5 item 29 | Sch 5 item 39 | Sch 2 item 2 | Sch 2 item 3 | Sch 2 item 4 | Sch 2 item 14 | Sch 4 item 22, effective Sch 4 (item 22): 15 Mar 2007 | Amended by No 49 of 2007, Sch 7 item 88 | Sch 7 item 89 | Sch 7 item 90 | Sch 7 item 91 | Sch 7 item 92, effective Sch 1 (items 88–94, 97): 1 July 2008 (s 2(1) item 2) | Amended by No 117 of 2008, Sch 1 item 2A | Sch 2 item 59 | Sch 2 item 60 | Sch 2 item 61 | Sch 2 item 62 | Sch 2 item 63 | Sch 2 item 64 | Sch 2 item 65 | Sch 3 item 33 | Sch 3 item 34 | Sch 3 item 35 | Sch 3 item 36 | Sch 3 item 37 | Sch 3 item 38 | Sch 3 item 39 | Sch 3 item 39A | Sch 3 item 39B | Sch 3 item 40 | Sch 3 item 41 | Sch 3 item 42 | Sch 3 item 43 | Sch 3 item 44 | Sch 3 item 45 | Sch 3 item 46 | Sch 3 item 47 | Sch 3 item 48 | Sch 3 item 48A | Sch 4 item 6 | Sch 4 item 7, effective Sch 2 (items 59–65), Sch 3 (items 31AA, 31AB, 33–50, 52–54) and Sch 4 (items 5–9): 22 Nov 2008 (s 2(1) items 3, 4, 6) | Amended by No 47 of 2009, Sch 3 item 1 | Sch 3 item 2 | Sch 3 item 3 | Sch 3 item 4 | Sch 3 item 5 | Sch 3 item 6 | Sch 3 item 7 | Sch 3 item 8 | Sch 3 item 9 | Sch 3 item 10 | Sch 3 item 58D | Sch 3 item 21 | Sch 3 item 22 | Sch 3 item 26 | Sch 3 item 27 | Sch 3 item 28 | Sch 4 item 24, effective Sch 3 (items 1–20): 1 July 2009 Sch 3 (items 21–36): 1 July 2008 Sch 3 (item 37): 12 May 2009 | Amended by No 88 of 2009, Sch 2 item 16 | Sch 2 item 426 | Sch 5 item 209 | Sch 5 item 210 | Sch 5 item 211 | Sch 5 item 233 | Sch 5 item 239 | Sch 5 item 240 | Sch 5 item 241 | Sch 5 item 18 | Sch 6 item 3, effective Sch 5 (items 209–230): 18 Sept 2009 (s 2(1) item 7) | Amended by No 102 of 2009, Sch 1 item 52 | Sch 1 item 68, effective Sch 1 (item 68): 9 Oct 2009 (s 2(1) item 4) | Amended by No 136 of 2011, Sch 2 item 1, effective Sch 2: 29 Nov 2011 (s 2(1) item 2) | Amended by No 18 of 2012, Sch 1 item 1 | Sch 1 item 2 | Sch 1 item 3 | Sch 1 item 4 | Sch 1 item 5 | Sch 1 item 6 | Sch 1 item 7 | Sch 1 item 8 | Sch 1 item 9 | Sch 1 item 10 | Sch 1 item 11 | Sch 1 item 12 | Sch 1 item 13 | Sch 1 item 14 | Sch 1 item 15 | Sch 1 item 16 | Sch 1 item 17 | Sch 1 item 18 | Sch 1 item 19 | Sch 1 item 20 | Sch 1 item 21 | Sch 1 item 22 | Sch 1 item 23 | Sch 1 item 24 | Sch 3 item 1 | Sch 3 item 2 | Sch 3 item 3 | Sch 3 item 4 | Sch 3 item 5 | Sch 4 item 1 | Sch 4 item 2 | Sch 4 item 3 | Sch 4 item 4 | Sch 4 item 5 | Sch 2 item 18 | Sch 2 item 19 | Sch 2 item 20 | Sch 2 item 21 | Sch 2 item 22 | Sch 2 item 23 | Sch 2 item 24 | Sch 5 item 6 | Sch 5 item 7 | Sch 5 item 8 | Sch 5 item 9 | Sch 5 item 10 | Sch 5 item 11 | Sch 5 item 12 | Sch 6 item 9, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 88 of 2013, Sch 7 item 77 | Sch 7 item 78 | Sch 7 item 79 | Sch 7 item 223 | Sch 7 item 234 | Sch 7 item 28 | Sch 7 item 5, effective Sch 7 (items 76–136, 138–166): 1 July 2012 (s 2(1) items 15, 17) Sch 7 (item 137): 29 Sept 2012 (s 2(1) item 16) | Amended by No 96 of 2014, Sch 1 item 47 | Sch 1 item 48 | Sch 1 item 49 | Sch 1 item 50 | Sch 1 item 51 | Sch 8 item 12 | Sch 9 item 5 | Sch 9 item 29, effective Sch 1 (items 47–52, 122–124): 30 Sept 2014 (s 2(1) item 2) | Amended by No 2 of 2015, Sch 2 item 88 | Sch 4 item 2 | Sch 4 item 70 | Sch 4 item 75 | Sch 4 item 25 | Sch 4 item 28, effective Sch 2 (items 2–4, 73, 88, 89, 95–99 and Sch 4 (item 70, 79): 25 Feb 2015 (s 2(1) items 3, 5, 6) Sch 2 (items 35–38): 1 July 2015 (s 2(1) item 4) | Amended by No 43 of 2019, Sch 2 item 1 | Sch 2 item 2 | Sch 2 item 3 | Sch 2 item 4 | Sch 2 item 5 | Sch 2 item 6 | Sch 2 item 7 | Sch 2 item 8 | Sch 2 item 9 | Sch 2 item 10 | Sch 2 item 11 | Sch 2 item 12 | Sch 2 item 13 | Sch 2 item 14 | Sch 2 item 15 | Sch 2 item 16 | Sch 2 item 17 | Sch 2 item 18 | Sch 2 item 19 | Sch 2 item 20 | Sch 2 item 21 | Sch 2 item 22 | Sch 2 item 23 | Sch 2 item 24 | Sch 2 item 25 | Sch 2 item 26 | Sch 2 item 27, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1) | Amended by No 37 of 2024, Sch 2 item 1 | Sch 5 item 1, effective Sch 5: 1 July 2024 (s 2(1) item 4) | Amended by No 38 of 2024, Sch 5 item 1, effective Sch 1 (item 68): 14 Oct 2024 (s 2(1) item 2)

s 2A — GDP factor

(1) For the purposes of this Act, the GDP factor for a financial year is the number (calculated to 3 decimal places) worked out by dividing the GDP deflator for the financial year by the GDP deflator for the immediately preceding financial year. (2) For the purposes of subsection (1), the GDP deflator for a financial year is the Implicit Price Deflator for Expenditure on Gross Domestic Product first published by the Australian Statistician in respect of the financial year. (3) If the Australian Statistician changes the index reference period for the GDP deflator, then, for the purposes of the application of subsection (1) after the change takes place, regard must be had only to the GDP deflator in terms of the new index reference period. (4) Where the GDP factor worked out under subsection (1) for a financial year would, if it were calculated to 4 decimal places, end with a number greater than 4, the GDP factor worked out under that subsection for that financial year is taken to be the GDP factor calculated to 3 decimal places under that subsection and increased by 0.001.

Amendment history: Inserted by No 80 of 1991, item 4, effective 1 July 1991 | Amended by No 4 of 2016, Sch 5 item 5, effective Sch 5 (item 5): 10 Mar 2016 (s 2(1) item 6)

s 2B — Group companies, subsidiaries, basic company groups and overall company groups

Group company—period (1) For the purposes of this Act, a company is a group company in relation to another company and a period if: (a) one of the companies was a subsidiary of the other company; or (b) each of the companies was a subsidiary of the same company; at all times during so much of the period during which both companies were in existence. Group company—time (1A) For the purposes of this Act, a company is a group company in relation to another company at a particular time if, at that time: (a) one of the companies was a subsidiary of the other company; or (b) each of the companies was a subsidiary of the same company. Subsidiary (2) For the purposes of this Act, a company (in this subsection called the subsidiary company ) is a subsidiary of another company (in this subsection called the holding company ) at a particular time if, at that time: (a) all the shares in the subsidiary company are beneficially owned by: (i) the holding company; or (ii) a company that is, or 2 or more companies each of which is, a subsidiary of the holding company; or (iii) the holding company and a company that is, or 2 or more companies each of which is, a subsidiary of the holding company; and (b) there is no agreement, arrangement or understanding in force under which any person is able, or would be able after that time, to affect rights of the holding company or of a subsidiary of the holding company in relation to the subsidiary company. (3) For the purposes of this Act, where a company is a subsidiary of another company (including a company that is such a subsidiary by virtue of another application or other applications of this subsection), every company that is a subsidiary of the first ‑ mentioned company is also a subsidiary of the other company. (4) For the purposes of subsection (2), a person is taken to be able to affect rights of a company in relation to another company if the person has a right, power or option (whether because of any provision in the constituent document of either of those companies or because of any agreement or instrument or otherwise) to acquire those rights or do an act or thing that would prevent the first ‑ mentioned company from exercising those rights for its own benefit or receiving any benefits occurring because of those rights. Basic company group (4A) For the purposes of this Act, a basic company group is a group of companies, where each company in the group is a group company in relation to each other company in the group. Overall company group (4B) For the purposes of this Act, an overall company group is a basic company group that is not a subset of any other basic company group. When company in existence (5) For the purposes of this section, a company is taken to be in existence if it has been incorporated and has not been dissolved.

Amendment history: Inserted by No 80 of 1991, effective 1 July 1991 | Amended by No 55 of 2001, effective s 4–14 and Sch 3 (items 413–415): 15 July 2001 (s 2(3) and gaz 2001, No S285) | Amended by No 78 of 2006, Sch 5 item 1, effective Sch 1 (items 1–10, 12), Sch 2, Sch 3 (items 1, 2, 4–9), Sch 4 (items 1–24, 38) and Sch 5: 1 July 2006 (s 2(1) items 2, 3, 5–11) Sch 3 (item 3): 1 July 2008 (s 2(1) item 4) | Amended by No 47 of 2009, Sch 3 item 3 | Sch 3 item 7 | Sch 3 item 9 | Sch 3 item 10 | Sch 3 item 11 | Sch 3 item 12 | Sch 3 item 13 | Sch 3 item 14 | Sch 3 item 15 | Sch 3 item 16, effective Sch 3 (items 1–20): 1 July 2009 Sch 3 (items 21–36): 1 July 2008 Sch 3 (item 37): 12 May 2009

s 2BA — Designated company groups

(1) This section sets out the method for identifying a designated company group for the purposes of this Act. (2) First, identify a particular overall company group. (3) Second, identify all of the members of the overall company group that are entitled to derive assessable receipts in relation to a petroleum project (whether or not the same petroleum project). These members constitute a provisional designated company group . (4) Third, if the following conditions are satisfied in relation to a company (the key company ): (a) the key company is a member of the provisional designated company group; (b) the key company is not a subsidiary of any other company in the provisional designated company group; (c) each other company in the provisional designated company group is a subsidiary of the key company; then: (d) the provisional designated company group is a designated company group ; and (e) the key company is the head company of that designated company group. (5) Fourth, if: (a) subsection (4) does not apply; and (b) each company in the provisional designated company group is a subsidiary of another company (the key company ) that: (i) is a member of the overall company group; and (ii) is not a member of the provisional designated company group; then: (c) both: (i) the key company; and (ii) the members of the provisional designated company group; constitute a designated company group ; and (d) the key company is the head company of that designated company group. (6) Subsection (5) has effect subject to subsection (7). (7) If: (a) a designated company group is covered by subsection (5); and (b) the head company of the designated company group is a subsidiary of another company (the higher ‑ tier company ); and (c) the higher ‑ tier company is a member of the overall company group; and (d) the higher ‑ tier company is not a member of the provisional designated company group; there is taken not to be a designated company group of which: (e) the higher ‑ tier company is the head company; and (f) any member of the provisional designated company group is a member.

Amendment history: Inserted by No 47 of 2009, Sch 3 item 4 | Sch 3 item 8, effective Sch 3 (items 1–20): 1 July 2009 Sch 3 (items 21–36): 1 July 2008 Sch 3 (item 37): 12 May 2009

s 2C — Greater Sunrise apportionments

(1) For the purposes of this Act, current apportionment percentage means the percentage applying from time to time under the definition of current apportionment percentage in subsection 286(4) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 . (2) For the purposes of this Act, apportionment percentage figure , in relation to a year of tax, means: (a) if the current apportionment percentage did not change during the year of tax—the numerator of the fraction with a denominator of 100 that represents the current apportionment percentage that applied during that year; or (b) if the current apportionment percentage changed during the year of tax—means the amount worked out using the following formula: where: days in tax year means the number of days in the year of tax. first % figure , in relation to a year of tax in which the current apportionment percentage changed, means the numerator of the fraction with a denominator of 100 that represents the current apportionment percentage applying before the change. prior days , in relation to a year of tax in which the current apportionment percentage changed, means the number of days in that year before the current apportionment percentage changed. second % figure , in relation to a year of tax in which the current apportionment percentage changed, means the numerator of the fraction with a denominator of 100 that represents the current apportionment percentage applying after the change. subsequent days , in relation to a year of tax in which the current apportionment percentage changed, means the number of days in that year from and including the day on which the current apportionment percentage changed. (3) For the purposes of this Act, apportionment percentage figure , in relation to a period of days that is not a year of tax, means the amount worked out under subsection (2) as if the period were a year of tax.

Amendment history: Inserted by No 47 of 2004, effective Sch 2 (items 1–18): 7 Feb 2007 | Amended by No 49 of 2007, Sch 7 item 93, effective Sch 1 (items 88–94, 97): 1 July 2008 (s 2(1) item 2) | Amended by No 117 of 2008, Sch 3 item 48B | Sch 4 item 7A, effective Sch 2 (items 59–65), Sch 3 (items 31AA, 31AB, 33–50, 52–54) and Sch 4 (items 5–9): 22 Nov 2008 (s 2(1) items 3, 4, 6) | Amended by No 37 of 2024, Sch 5 item 1 | Sch 5 item 2 | Sch 5 item 3, effective Sch 5: 1 July 2024 (s 2(1) item 4)

s 2D — Future closing ‑ down expenditure

(1) A person has future closing ‑ down expenditure in relation to a petroleum project if: (a) the project terminates on the cessation of one or more production licences; and (b) on that termination, an infrastructure licence comes into force, or continues in force, permitting the use of any part (the licensed property ) of the operation, facilities and other things that comprised the project immediately before the termination; and (c) but for the continued use of the licensed property (as permitted by the infrastructure licence) after that termination, the person would have incurred closing ‑ down expenditure in relation to the project, with respect to the licensed property. (2) The amount of the person’s future closing ‑ down expenditure is worked out as follows: where: bond rate is the long ‑ term bond rate in relation to the financial year during which the project terminates. future closing ‑ down costs is the payments (not being excluded expenditure), whether of a capital or revenue nature, that the person would expect: (a) the person; or (b) another person who becomes responsible for carrying on operations involved in closing down the licensed property; to be liable to make in carrying on operations involved in closing down the licensed property. It includes any environmental restoration as a consequence of closing down the licensed property. years of operation is the number of years after the termination of the project over which the licensed property is expected to be used as permitted by the infrastructure licence. (3) For the purposes of the definition of future closing ‑ down costs in subsection (2), if the person intends to make alterations or additions to the licensed property after the termination of the project, the payments referred to in that definition are to be disregarded to the extent that they relate to the alterations or additions. (4) In subsection (2): year means a period of 12 months. Example: On the termination of a petroleum project and the coming into force of an infrastructure licence, a person has future closing ‑ down costs of $1 million. The licensed property is expected to be used as permitted by the infrastructure licence for 10 years, and the bond rate in relation to the financial year in question is 5%. The amount of the person’s future closing ‑ down expenditure is:

Amendment history: Inserted by No 78 of 2006, Sch 3 item 1 | Sch 3 item 4, effective Sch 1 (items 1–10, 12), Sch 2, Sch 3 (items 1, 2, 4–9), Sch 4 (items 1–24, 38) and Sch 5: 1 July 2006 (s 2(1) items 2, 3, 5–11) Sch 3 (item 3): 1 July 2008 (s 2(1) item 4) | Amended by No 46 of 2011, Sch 1 item 2B | Sch 1 item 2E | Sch 1 item 2F | Sch 2 item 909, effective Sch 2 (items 909, 910) and Sch 3 (items 10, 11): 27 Dec 2011 (s 2(1) items 7, 12)

s 2E — Marketable petroleum commodity

(1) A marketable petroleum commodity is a product listed in subsection (2) that: (a) is produced from petroleum for the purpose of: (i) sale; or (ii) use as a feedstock for conversion to another product (whether a product listed in subsection (2) or not); or (iii) direct consumption as energy; and (b) is in its final form for that purpose. (2) The products are as follows: (a) stabilised crude oil; (b) sales gas; (c) condensate; (d) liquefied petroleum gas; (e) ethane; (ea) shale oil; (f) any other product specified in regulations made for the purposes of this paragraph. (3) However, a product cannot be a marketable petroleum commodity if it has been produced wholly or partly from a product that was a marketable petroleum commodity.

Amendment history: Inserted by No 136 of 2011, Sch 2 item 1, effective Sch 2: 29 Nov 2011 (s 2(1) item 2) | Amended by No 18 of 2012, Sch 1 item 25, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8)

s 3 — Petroleum pools

(1) Where, for the purposes of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 , petroleum recovered from a petroleum pool, within the meaning of that Act, is taken by Division 3 of Part 1.2 of that Act to have been recovered from a particular area or from particular areas in particular proportions, the petroleum shall be taken for the purposes of this Act to have been recovered from that area, or from those areas in those proportions, as the case may be. (2) If, for the purposes of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 , petroleum recovered from a part of the seabed is taken by subsection 54(1E) of that Act to have been recovered from a particular area or from particular areas in particular proportions, the petroleum is taken for the purposes of this Act to have been recovered from that area, or from those areas in those proportions, as the case may be.

Amendment history: Amended by No 17 of 2006, Sch 2 item 2 | Sch 2 item 3 | Sch 2 item 10 | Sch 2 item 11 | Sch 2 item 22 | Sch 2 item 23 | Sch 2 item 24 | Sch 2 item 37 | Sch 2 item 43 | Sch 2 item 56 | Sch 2 item 88 | Sch 2 item 89 | Sch 2 item 95, effective Sch 2 (items 73–96): 1 July 2008 (s 2(1) item 2) | Amended by No 117 of 2008, Sch 1 item 3 | Sch 1 item 4 | Sch 1 item 5 | Sch 3 item 1 | Sch 3 item 2 | Sch 3 item 12 | Sch 3 item 16 | Sch 3 item 25 | Sch 3 item 31A | Sch 3 item 49, effective Sch 2 (items 59–65), Sch 3 (items 31AA, 31AB, 33–50, 52–54) and Sch 4 (items 5–9): 22 Nov 2008 (s 2(1) items 3, 4, 6) | Amended by No 11 of 2017, Sch 1 item 2 | Sch 1 item 3, effective Sch 2 (items 2, 3): 23 Feb 2017 (s 2(1) item 2)

s 4 — Relationship between licences, permits and leases etc.

(1) For the purposes of this Act: (a) a production licence shall be taken to be related to an exploration permit if: (i) because of the grant of the production licence, the exploration permit ceased to be in force in respect of the block or blocks in respect of which the production licence was granted; or (ii) because of the grant of the production licence, a retention lease that was related to the exploration permit ceased to be in force in respect of the block or blocks in respect of which the production licence was granted; (b) a retention lease shall be taken to be related to an exploration permit if, because of the grant of the retention lease, the exploration permit ceased to be in force in respect of the block or blocks in respect of which the retention lease was granted; (c) a production licence shall be taken to be related to a retention lease if, because of the grant of the production licence, the retention lease ceased to be in force in respect of the block or blocks in respect of which the production licence was granted; and (d) where an exploration permit, retention lease or production licence (which permit, lease or licence is in this paragraph referred to as the original authority ) is or was renewed, the renewed permit, lease or licence shall be taken to be a continuation of the original authority notwithstanding that the renewal may not have been granted in respect of all of the blocks in respect of which the original authority was granted. (2) For the purposes of this Act: (a) a production licence is derived from an exploration permit if the licence is related to the permit because of subparagraph (1)(a)(i); and (b) a production licence is derived from a retention lease if the licence is related to the lease.

Amendment history: Amended by No 80 of 1991, item 6, effective 1 July 1991

s 4A — Holding an interest—petroleum project

Petroleum projects generally (1) For the purposes of this Act, a person is taken to have held, at a particular time, an interest in, or in relation to, a petroleum project if the person was, at that time, entitled to receive receipts from the sale of petroleum, or of marketable petroleum commodities produced from petroleum, recovered from: (a) if the time is a time after the production licence in relation to the project came into force—the production licence area in relation to the project; or (b) if the time is a time before the production licence in relation to the project came into force—a pre ‑ licence area in relation to the production licence. (2) However, subsection (1) does not apply if the project is a combined project, the Bass Strait project or the North West Shelf project. Combined projects (3) For the purposes of this Act, a person is taken to have held, at a particular time, an interest in, or in relation to, a combined project if the person was, at that time, entitled to receive receipts from the sale of petroleum, or of marketable petroleum commodities produced from petroleum, recovered from: (a) if the time is a time after the project combination certificate came into force—the production licence areas in relation to the project; or (b) if the time is a time before the project combination certificate came into force: (i) any production licence areas in relation to pre ‑ combination projects relating to the combined project; or (ii) any pre ‑ licence areas in relation to any of those pre ‑ combination projects. The Bass Strait project and the North West Shelf project (4) For the purposes of this Act, a person is taken to have held, at a particular time, an interest in, or in relation to,: (a) the Bass Strait project; or (b) the North West Shelf project; if the person was, at that time, entitled to receive receipts from the sale of petroleum, or of marketable petroleum commodities produced from petroleum, recovered from any of the production licence areas in relation to that project.

Amendment history: Inserted by No 18 of 2012, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 88 of 2013, Sch 7 item 82 | Sch 7 item 83, effective Sch 7 (items 76–136, 138–166): 1 July 2012 (s 2(1) items 15, 17) Sch 7 (item 137): 29 Sept 2012 (s 2(1) item 16)

s 4B — Greater Sunrise transferable exploration expenditure must be adjusted

Transfers from a Greater Sunrise project (1) If, in relation to a year of tax, transferable exploration expenditure is transferred from a Greater Sunrise project to a petroleum project other than a Greater Sunrise project, the amount of that expenditure for the purposes of the other petroleum project is taken to be the amount worked out using the following formula: where: amount transferred means the amount transferred, in relation to the year of tax, from the Greater Sunrise project before that amount is reduced by the operation of this subclause. apportionment percentage figure has the meaning given by subsection 2C(2). Transfers to a Greater Sunrise project (2) If, in relation to a year of tax, transferable exploration expenditure is transferred to a Greater Sunrise project from a petroleum project other than a Greater Sunrise project, the amount of that expenditure for the purposes of the Greater Sunrise project is taken to be the amount worked out using the following formula: where: amount transferred means the amount transferred, in relation to the year of tax, from the project other than the Greater Sunrise project before that amount is increased by the operation of this subclause. apportionment percentage figure has the meaning given by subsection 2C(2).

Amendment history: Inserted by No 18 of 2012, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 88 of 2013, effective Sch 7 (items 76–136, 138–166): 1 July 2012 (s 2(1) items 15, 17) Sch 7 (item 137): 29 Sept 2012 (s 2(1) item 16)

s 4C — Holding an interest—retention lease

For the purposes of this Act, a person is taken to have held an interest in, or in relation to, a retention lease at a particular time if the person was, at that time, entitled to receive receipts from the sale of petroleum, or marketable petroleum commodities produced from petroleum, recovered from: (a) if the time is a time after the retention lease was granted—the retention lease area; or (b) if the time is a time before the retention lease was granted—the exploration permit area of the exploration permit to which the retention lease is related.

Amendment history: Inserted by No 18 of 2012, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 88 of 2013, effective Sch 7 (items 76–136, 138–166): 1 July 2012 (s 2(1) items 15, 17) Sch 7 (item 137): 29 Sept 2012 (s 2(1) item 16)

s 5 — Petroleum exploration and recovery in relation to certain areas

Pre ‑ 1 July 2008 petroleum project (1) For the purposes of the application of this Act (including this section) to a pre ‑ 1 July 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, a production licence area, an exploration permit area or a retention lease area is a reference to exploration for petroleum in, or recovery of petroleum from, the production licence area, the exploration permit area or the retention lease area while the production licence, exploration permit or retention lease concerned is or was in force. (2) For the purposes of the application of this Act to a pre ‑ 1 July 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, the eligible exploration or recovery area in relation to a petroleum project is a reference to exploration for petroleum in, or recovery of petroleum from: (a) where the production licence or any production licence in relation to the project is a permit derived production licence—the exploration permit area in relation to the exploration permit to which the production licence is related (being exploration or recovery occurring either before or after the production licence came into force but not after marketable petroleum commodities cease, otherwise than temporarily, to be produced in relation to the project); (b) where the production licence or any production licence in relation to the project is a lease derived production licence—the retention lease area in relation to the retention lease to which the production licence is related (being exploration or recovery occurring either before or after the production licence came into force but not after marketable petroleum commodities cease, otherwise than temporarily, to be produced in relation to the project); and (c) the production licence area of the production licence, or the production licence areas of the production licences, in respect of the project. (3) For the purposes of subsections (1) and (2), where, at a time when no permit derived production licence in relation to an exploration permit is in force, a retention lease that is related to the exploration permit comes into force, any exploration for, or recovery of, petroleum that occurred while the exploration permit was in force in the block or blocks in respect of which the retention lease was granted and during the period: (a) where paragraph (b) does not apply—before the retention lease came into force; or (b) where, before the retention lease came into force, a permit derived production licence, or permit derived production licences, in relation to the exploration permit were in force—after that production licence or all of those production licences, as the case may be, ceased to be in force and before the retention lease came into force; shall be taken to have occurred in the retention lease area and not in the exploration permit area notwithstanding that the retention lease was not in force at that time. (4) For the purposes of subsection (2), where, but for this subsection, the same exploration for petroleum or recovery of petroleum would be exploration for petroleum in, or recovery of petroleum from, the exploration permit area or the retention lease area in relation to 2 or more production licences, the exploration or recovery shall be taken to relate only to the production licence that first came into force. Post ‑ 30 June 2008 petroleum project (5) For the purposes of the application of this Act (including this section) to a post ‑ 30 June 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, a production licence area, an exploration permit area or a retention lease area is a reference to exploration for petroleum in, or recovery of petroleum from, the production licence area, the exploration permit area or the retention lease area while the production licence, exploration permit or retention lease concerned is or was in force. (6) For the purposes of the application of this Act to a post ‑ 30 June 2008 petroleum project, a reference to exploration for petroleum in, or recovery of petroleum from, the eligible exploration or recovery area in relation to a petroleum project is a reference to: (a) if the production licence, or any production licence, in relation to the project is a production licence (in this paragraph called the current production licence ) derived from an exploration permit (in this paragraph called the prior exploration permit )—exploration for petroleum in, or recovery of petroleum from, the exploration permit area of the prior exploration permit, where the exploration or recovery occurred: (i) before the current production licence came into force; and (ii) if, before the current production licence came into force, there came into force one or more retention leases, or one or more other production licences, derived from the prior exploration permit—after whichever of those retention leases or other production licences last came into force before the current production licence came into force; and (b) if the production licence, or any production licence, in relation to the project is a production licence (in this paragraph called the current production licence ) derived from a retention lease (in this paragraph called the prior retention lease )—exploration for petroleum in, or recovery of petroleum from, the retention lease area of the prior retention lease, where the exploration or recovery occurred before the current production licence came into force; and (c) if: (i) the production licence, or any production licence, in relation to the project is a production licence (in this paragraph called the current production licence ) derived from a retention lease (in this paragraph called the prior retention lease ); and (ii) the prior retention lease was derived from an exploration permit (in this paragraph called the prior exploration permit ); exploration for petroleum in, or recovery of petroleum from, the exploration permit area of the prior exploration permit, where the exploration or recovery occurred: (iii) before the prior retention lease came into force; and (iv) if, before the prior retention lease came into force, there came into force one or more other production licences, or one or more other retention leases, derived from the prior exploration permit—after whichever of those other retention leases or other production licences last came into force before the prior retention lease came into force; and (d) exploration for petroleum in, or recovery of petroleum from, the production licence area of the production licence, or the production licence areas of the production licences, in respect of the project. (7) If: (a) paragraph (6)(c) applies to a post ‑ 30 June 2008 petroleum project; and (b) the prior retention lease mentioned in that paragraph is one of a set of 2 or more retention leases that: (i) came into force at the same time; and (ii) were derived from the prior exploration permit mentioned in that paragraph; and (c) the production licence, or the production licences, in relation to one or more other post ‑ 30 June 2008 petroleum projects were derived from one or more of the retention leases included in the set mentioned in paragraph (b) of this subsection; and (d) exploration expenditure incurred in relation to the petroleum project mentioned in paragraph (a) of this subsection is attributable to exploration for petroleum in, or recovery of petroleum from, the exploration permit area of the prior exploration permit; then, for the purposes of the application of this Act to the petroleum project mentioned in paragraph (a) of this subsection, the amount of the exploration expenditure mentioned in paragraph (d) of this subsection is taken to be the amount worked out using the following formula: where: number of retention leases relating to the petroleum project mentioned in paragraph (a) of this subsection means the number of retention leases: (a) from which the production licence, or the production licences, in relation to the petroleum project mentioned in paragraph (a) of this subsection were derived; and (b) that are included in the set mentioned in paragraph (b) of this subsection. total number of retention leases means the number of retention leases that are included in the set mentioned in paragraph (b) of this subsection. unadjusted amount of exploration expenditure means the amount that, apart from this subsection, is the amount of the exploration expenditure mentioned in paragraph (d) of this subsection.

Amendment history: Amended by No 47 of 2009, Sch 3 item 23 | Sch 3 item 24 | Sch 3 item 25, effective Sch 3 (items 1–20): 1 July 2009 Sch 3 (items 21–36): 1 July 2008 Sch 3 (item 37): 12 May 2009

s 6 — Matters dealt with in this Part

(1) This Part deals with: (a) the calculation of the amount of class 2 uplifted exploration expenditure that a person is taken to have incurred in a financial year in relation to a petroleum project; and (b) the calculation of the amount of expenditure incurred by the person in relation to the project in standard uplift expenditure years that is transferable from the project in relation to the financial year. In this Part, the financial year is called the assessable year . (2) For the avoidance of doubt, the assessable year may be a financial year starting after the finishing day in relation to the petroleum project.

s 7 — What happens if there is no notional taxable profit

If there is no notional taxable profit in relation to the person, the petroleum project and the assessable year: (a) the person is taken not to have incurred any class 2 uplifted exploration expenditure in relation to the project and the assessable year; and (b) all the expenditure included in the incurred exploration expenditure amounts for the standard uplift expenditure years is transferable by the person in relation to the assessable year.

s 8 — What happens if there is a notional taxable profit

(1) This clause applies if there is a notional taxable profit in relation to the person, the petroleum project and the assessable year. (2) For the purposes of this clause, the available exploration expenditure amount for the assessable year equals the incurred exploration expenditure amount in relation to the assessable year. (3) For the purposes of this clause, the available exploration expenditure amount for a standard uplift expenditure year before the assessable year is worked out as follows: (a) if the standard uplift expenditure year is the financial year immediately before the assessable year—multiply the incurred exploration expenditure amount in relation to the standard uplift expenditure year by: (i) if the standard uplift expenditure year starts before 1 July 2019—the long ‑ term bond rate in relation to the standard uplift expenditure year plus 1.15; or (ii) otherwise—the long ‑ term bond rate in relation to the standard uplift expenditure year plus 1.05; (b) if the standard uplift expenditure year is an earlier financial year—work out, in relation to the standard uplift expenditure year and each later financial year ending before the assessable year, an amount in accordance with the formula: where: exploration expenditure amount means: (i) in making the calculation in relation to the standard uplift expenditure year—the incurred exploration expenditure amount in relation to the standard uplift expenditure year; or (ii) in making the calculation in relation to one of the later financial years—the amount calculated under this paragraph in relation to the immediately preceding financial year for the purpose of working out the available exploration expenditure amount for the standard uplift expenditure year. uplift rate , for the financial year in relation to which the calculation is being made (the calculation year ), means: (i) if both the standard uplift expenditure year and the calculation year start before 1 July 2019—the long ‑ term bond rate in relation to the calculation year plus 1.15; or (ii) if the standard uplift expenditure year starts before 1 July 2019 and the calculation year starts on or after 1 July 2019—the long ‑ term bond rate in relation to the calculation year plus 1.05; or (iii) if the standard uplift expenditure year starts on or after 1 July 2019 and the calculation year is 10 or more years after the standard uplift expenditure year—the GDP factor for the calculation year; or (iv) in any other case—the long ‑ term bond rate in relation to the calculation year plus 1.05; (c) if paragraph (a) applies—the available exploration expenditure amount for the standard uplift expenditure year is the amount worked out under that paragraph; (d) if paragraph (b) applies—the available exploration expenditure amount for the standard uplift expenditure year is the amount worked out under that paragraph in relation to the most recent of the later financial years referred to in paragraph (b). (4) If the total of the available exploration expenditure amounts for the assessable year and the previous standard uplift expenditure years is less than or equal to the notional taxable profit: (a) the person is taken to have incurred an amount of class 2 uplifted exploration expenditure in the assessable year in relation to the project equal to the total of those available exploration expenditure amounts; and (b) that class 2 uplifted exploration expenditure is attributable to all the expenditure included in the incurred exploration expenditure amounts for the assessable year and the previous standard uplift expenditure years; and (c) none of the expenditure included in the incurred exploration expenditure amounts for the assessable year and the previous standard uplift expenditure years is transferable by the person in relation to the assessable year. (5) If the total of the available exploration expenditure amounts for the assessable year and the previous standard uplift expenditure years exceeds the notional taxable profit: (a) the person is taken to have incurred an amount of class 2 uplifted exploration expenditure in the assessable year in relation to the project equal to the notional taxable profit; and (b) the expenditure to which that class 2 uplifted exploration expenditure is attributable is to be worked out in accordance with whichever of subclauses (6) and (7) is applicable; and (c) the expenditure included in the incurred exploration expenditure amounts for the assessable year and the previous standard uplift expenditure years that is not expenditure to which that class 2 uplifted exploration expenditure is attributable is transferable by the person in relation to the assessable year. (6) If: (a) class 2 uplifted exploration expenditure is taken to be incurred by subclause (5); and (b) the available exploration expenditure amount for the earliest of the standard uplift expenditure years for which there is such an amount equals or exceeds the notional taxable profit; the class 2 uplifted exploration expenditure is attributable to so much of the expenditure included in the incurred exploration expenditure amount for that standard uplift expenditure year as, if it had been the only expenditure included in that amount, would have made the available exploration expenditure amount for that standard uplift expenditure year equal the notional taxable profit. (7) If: (a) class 2 uplifted exploration expenditure is taken to be incurred by subclause (5); and (b) the notional taxable profit exceeds the available exploration expenditure amount for the earliest of the standard uplift expenditure years for which there is such an amount; the following provisions have effect: (c) add amounts in accordance with the following rules: (i) start with the available exploration expenditure amount for the earliest of the standard uplift expenditure years for which there is such an amount and add to that, in order starting with the next earliest standard uplift expenditure year, the available exploration expenditure amounts for the later standard uplift expenditure years; (ii) if adding the available exploration expenditure amount for a standard uplift expenditure year would make the total exceed the notional taxable profit, add only so much of that amount as makes the total equal the notional taxable profit and do not add the available exploration expenditure amount for any later standard uplift expenditure year; (d) the class 2 uplifted expenditure is attributable to: (i) all the expenditure included in the incurred exploration expenditure amounts for each standard uplift expenditure year in relation to which the whole available exploration expenditure amount was added in accordance with subparagraphs (c)(i) and (ii); and (ii) if, under those subparagraphs, part only of the available exploration expenditure amount for a standard uplift expenditure year was added—so much of the expenditure included in the incurred exploration expenditure amount for that standard uplift expenditure year as, if it had been the only expenditure included in that amount, would have made the available exploration expenditure amount for that standard uplift expenditure year equal the added part.

s 9 — Interpretation

In this Part: notional taxable profit , in relation to a person, a petroleum project and a financial year, means the amount (if any) that would be the taxable profit under subsection 22(1) or (2) in relation to the person, the project and the financial year if: (a) the person had not incurred any class 2 GDP factor expenditure, resource tax expenditure, starting base expenditure, augmented denied deductible expenditure or closing ‑ down expenditure in relation to the project and the financial year; and (b) any expenditure transferred: (i) to the project in relation to the financial year under section 45A; or (ii) to the person in relation to the project and the financial year under section 45B; had not been transferred.

s 10 — Translation of amounts into Australian currency

(1) For the purposes of this Act, an amount in a foreign currency is to be translated into Australian currency. Examples of an amount (2) The following are examples of an amount: (a) an amount of an expense; (b) an amount of an obligation; (c) an amount of a liability; (d) an amount of a receipt; (e) an amount of a payment; (f) an amount of consideration; (g) a value. Translation rule—assessable receipt (3) If: (a) a person derives an assessable receipt in relation to a petroleum project; and (b) the receipt is in a foreign currency; the receipt is to be translated into Australian currency at the exchange rate applicable at the time when the receipt is derived. Translation rule—eligible real expenditure (4) If: (a) a person incurs eligible real expenditure in relation to a petroleum project; and (b) the expenditure is in a foreign currency; the expenditure is to be translated into Australian currency at the exchange rate applicable at the time when the expenditure is incurred. Translation rule—transfer of entire entitlement to assessable receipts (5) If: (a) section 48 applies in relation to a transaction; and (b) a person is a purchaser (within the meaning of section 48) in relation to the transaction; and (c) the person is taken, under section 48, to have derived or incurred an amount; and (d) the vendor (within the meaning of section 48) in relation to the transaction has made an election under section 58B (functional currency); and (e) the election is in effect for the year of tax in which the transfer time (within the meaning of section 48) occurred; and (f) the amount is in the vendor’s applicable functional currency; the amount is to be translated from the applicable functional currency into Australian currency at the exchange rate applicable at the transfer time (within the meaning of section 48). Translation rule—transfer of part of entitlement to assessable receipts (6) If: (a) section 48A applies in relation to a transaction; and (b) a person is a purchaser (within the meaning of section 48A) in relation to the transaction; and (c) the person is taken, under section 48A, to have derived or incurred an amount; and (d) the vendor (within the meaning of section 48A) in relation to the transaction has made an election under section 58B (functional currency); and (e) the election is in effect for the year of tax in which the transfer time (within the meaning of section 48A) occurred; and (f) the amount is in the vendor’s applicable functional currency; the amount is to be translated from the applicable functional currency into Australian currency at the exchange rate applicable at the transfer time (within the meaning of section 48A). Operation of functional currency provisions unaffected (7) This section does not affect the operation of Division 7 of Part V (functional currency).

Amendment history: Repealed and substituted by No 47 of 2009, Sch 3 item 17 | Sch 3 item 58M, effective Sch 3 (items 1–20): 1 July 2009 Sch 3 (items 21–36): 1 July 2008 Sch 3 (item 37): 12 May 2009 | Amended by No 88 of 2013, Sch 7 item 73 | Sch 7 item 85 | Sch 7 item 86 | Sch 7 item 200 | Sch 7 item 201 | Sch 7 item 202, effective Sch 7 (items 76–136, 138–166): 1 July 2012 (s 2(1) items 15, 17) Sch 7 (item 137): 29 Sept 2012 (s 2(1) item 16)

s 11 — Residence

(1) For the purposes of this Act, a person shall be taken to have been a non ‑ resident at a particular time if the person was not a resident of Australia at that time. (2) For the purposes of this Act, a person shall be taken to have been a resident of Australia at a particular time if: (a) in the case of a natural person: (i) the person resided in Australia at that time; or (ii) except in a case where the Commissioner is satisfied that that person’s permanent place of residence at that time was outside Australia—the person was domiciled in Australia at that time; (b) in the case of a body corporate: (i) the body was incorporated in Australia at that time; or (ii) at that time the body corporate carried on business in Australia and: (A) had its central management and control in Australia; or (B) had its voting power controlled by shareholders who were residents of Australia; or (c) in the case of a partnership or an unincorporated association—any member of the partnership or association was a resident of Australia at that time by virtue of paragraph (a) or (b).

s 12 — What happens if there is a notional taxable profit

(1) This clause applies if there is a notional taxable profit in relation to the person, the petroleum project and the assessable year. (2) For the purposes of this clause, the available exploration expenditure amount for a GDP expenditure year is worked out as follows: (a) work out, in relation to the GDP expenditure year and each later financial year ending before the assessable year, an amount in accordance with the formula: where: Exploration expenditure amount means: (i) in making the calculation in relation to the GDP expenditure year—the incurred exploration expenditure amount in relation to the GDP expenditure year; or (ii) in making the calculation in relation to one of the later financial years—the amount calculated under this paragraph in relation to the immediately preceding financial year for the purpose of working out the available exploration expenditure amount for the GDP expenditure year; GDP factor means the GDP factor in relation to the financial year in relation to which the calculation is being made; (b) the available exploration expenditure amount for the GDP expenditure year is the amount worked out under paragraph (a) in relation to the most recent of the later financial years referred to in that paragraph. (3) If the total of the available exploration expenditure amounts for the GDP expenditure years is less than or equal to the notional taxable profit: (a) the person is taken to have incurred an amount of class 2 GDP factor expenditure in the assessable year in relation to the project equal to the total of those available exploration expenditure amounts; and (b) that class 2 GDP factor expenditure is attributable to all the expenditure included in the incurred exploration expenditure amounts for the GDP expenditure years; and (c) none of the expenditure included in the incurred exploration expenditure amounts for the GDP expenditure years is transferable by the person in relation to the assessable year. (4) If the total of the available exploration expenditure amounts for the GDP expenditure years exceeds the notional taxable profit: (a) the person is taken to have incurred an amount of class 2 GDP factor expenditure in the assessable year in relation to the project equal to the notional taxable profit; and (b) the expenditure to which that class 2 GDP factor expenditure is attributable is to be worked out in accordance with whichever of subclauses (5) and (6) is applicable; and (c) the expenditure included in the incurred exploration expenditure amounts for the GDP expenditure years that is not expenditure to which that class 2 GDP factor expenditure is attributable is transferable by the person in relation to the assessable year. (5) If: (a) class 2 GDP factor expenditure is taken to be incurred by subclause (4); and (b) the available exploration expenditure amount for the earliest of the GDP expenditure years for which there is such an amount equals or exceeds the notional taxable profit; the class 2 GDP factor expenditure is attributable to so much of the expenditure included in the incurred exploration expenditure amount for that GDP expenditure year as, if it had been the only expenditure included in that amount, would have made the available exploration expenditure amount for that GDP expenditure year equal the notional taxable profit. (6) If: (a) class 2 GDP factor expenditure is taken to be incurred by subclause (4); and (b) the notional taxable profit exceeds the available exploration expenditure amount for the earliest of the GDP expenditure years for which there is such an amount; the following provisions have effect: (c) add amounts in accordance with the following rules: (i) start with the available exploration expenditure amount for the earliest of the GDP expenditure years for which there is such an amount and add to that, in order starting with the next earliest GDP expenditure year, the available exploration expenditure amounts for the later GDP expenditure years; (ii) if adding the available exploration expenditure amount for a GDP expenditure year would make the total exceed the notional taxable profit, add only so much of that amount as makes the total equal the notional taxable profit and do not add the available exploration expenditure amount for any later GDP expenditure year; (d) the class 2 GDP factor expenditure is attributable to: (i) all the expenditure included in the incurred exploration expenditure amounts for each GDP expenditure year for which the whole available exploration expenditure amount was added in accordance with subparagraphs (c)(i) and (ii); and (ii) if, under those subparagraphs, part only of the available exploration expenditure amount for a GDP expenditure year was added—so much of the expenditure included in the incurred exploration expenditure amount for that GDP expenditure year as, if it had been the only expenditure included in that amount, would have made the available exploration expenditure amount for that GDP expenditure year equal the added part.

s 13 — Unincorporated associations

(1) Subject to this section, this Act applies to an unincorporated association as if the association were a person. (2) Where, but for this subsection, an obligation would be imposed on an unincorporated association by virtue of the operation of subsection (1), the obligation is imposed on each member of the committee of management of the association, but may be discharged by any of those members. (3) Where, by virtue of the operation of subsection (1), an offence against this Act is deemed to have been committed by an unincorporated association, that offence shall be deemed to have been committed by each member of the committee of management of the association. (4) In a prosecution of a person for an offence by virtue of this section, it is a defence if the person proves that the person: (a) did not aid, abet, counsel or procure the act or omission by virtue of which the offence is deemed to have been committed; and (b) was not in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the act or omission by virtue of which the offence is deemed to have been committed. (5) A reference in this section to this Act includes a reference to Part III of the Taxation Administration Act 1953 to the extent to which that Part of that Act relates to this Act.

s 14 — Assumptions on which amounts to be worked out

(1) Amounts worked out under this Part in relation to the exploration permit or retention lease and a period (including a financial year) are to be worked out on the assumptions that: (a) a production licence derived from the permit or lease was in force at all times during the period; and (b) the petroleum project to which that production licence was related consisted only of that production licence. In this Part, the petroleum project referred to in paragraph (b) is called the notional project . (2) Augmented denied deductible expenditure taken to be incurred by a person in a financial year in relation to the notional project is not deductible expenditure actually incurred by the person in relation to the notional project in the financial year.

s 15 — Non ‑ transferable expenditure

(1) For the purposes of this Part, if: (a) the person incurred exploration expenditure, or is taken to have incurred uplifted frontier expenditure, in relation to the notional project in a financial year; and (b) the total amount of assessable receipts derived by the person in relation to the notional project in the financial year equals or exceeds the total amount of deductible expenditure actually incurred by the person in relation to the notional project in the financial year; the total of the amounts of exploration expenditure (other than designated frontier expenditure), and uplifted frontier expenditure, is taken to be non ‑ transferable expenditure incurred by the person in relation to the notional project. (2) For the purposes of this Part, if: (a) the total amount of deductible expenditure actually incurred by the person in relation to the notional project in a financial year exceeds the total amount of assessable receipts derived by the person in relation to the notional project and the financial year; and (b) the total of: (i) any amounts of exploration expenditure (other than designated frontier expenditure) actually incurred by the person; and (ii) any amounts of uplifted frontier expenditure taken to be incurred by the person in respect of designated frontier expenditure actually incurred by the person; in relation to the notional project in the financial year exceeds the excess referred to in paragraph (a) by an amount (the non ‑ transferable amount ); so much of the expenditure as equals the non ‑ transferable amount is taken to be non ‑ transferable expenditure incurred by the person in relation to the notional project. (3) If: (a) subclause (2) applies; and (b) the oldest amount of any exploration expenditure (other than designated frontier expenditure) incurred, or any uplifted frontier expenditure taken to be incurred, by the person in the financial year equals or exceeds the non ‑ transferable amount; the non ‑ transferable expenditure consists of so much of that oldest amount as equals the non ‑ transferable amount. (4) If: (a) subclause (2) applies; but (b) subclause (3) does not apply; the following provisions have effect: (c) add amounts in accordance with the following rules: (i) start with the oldest amount of any exploration expenditure (other than designated frontier expenditure) incurred, or any uplifted frontier expenditure taken to be incurred, by the person in the financial year; (ii) add to that, in order starting with the next oldest amount, each of the other amounts incurred, or taken to be incurred, by the person in the financial year; (iii) if adding an amount of expenditure would make the total exceed the non ‑ transferable amount, add only so much of the amount as makes the total equal the non ‑ transferable amount and do not add any later amount of expenditure; (d) the non ‑ transferable expenditure consists of the amounts of expenditure added together in accordance with paragraph (c).

Amendment history: Amended by No 145 of 2010, Sch 1 item 355 | Sch 2 item 59, effective Sch 2 (items 59, 60): 17 Dec 2010 (s 2(1) item 2)

s 16 — Amounts to be worked out

Work out, in relation to the person, the exploration permit or retention lease and the assessable year, the following amounts: (a) the total of the assessable receipts derived by the person in relation to the notional project during the period starting on 1 July 1990 and ending at the end of the assessable year; (b) the total of the deductible expenditure actually incurred by the person in relation to the notional project during the period starting on 1 July 1990 and ending at the end of the assessable year; (c) the total of: (i) any amounts of exploration expenditure (other than designated frontier expenditure) actually incurred by the person; and (ii) any amounts of uplifted frontier expenditure taken to be incurred by the person in respect of designated frontier expenditure actually incurred by the person; in relation to the notional project during the period starting on 1 July 1990 and ending at the end of the assessable year; (d) the amount worked out under paragraph (c), less the total of the amounts of non ‑ transferable expenditure incurred by the person in relation to the notional project during the period starting on 1 July 1990 and ending at the end of the assessable year. In this Part, the amount worked out under paragraph (a) is called the notional assessable receipts , the amount worked out under paragraph (b) is called the notional deductible expenditure , the amount worked out under paragraph (c) is called the notional exploration expenditure and the amount worked out under paragraph (d) is called the reduced notional exploration expenditure . Note: the effect of subsection 45D(3) must be taken into account when working out the notional deductible expenditure and the notional exploration expenditure.

s 19 — Petroleum project

(1) Subject to subsection (1A) and (1B), for the purposes of this Act, where a production licence is in force and is not specified in a project combination certificate that is in force, there shall be taken to be a petroleum project in relation to the production licence. (1A) For the purposes of this Act, there is taken to be a single petroleum project in relation to all production licences that are related to the Bass Strait exploration permit and that are in force from time to time, unless those licences are specified in a project combination certificate that is in force. (1B) For the purposes of this Act, there is taken to be a single petroleum project in relation to all production licences that are related to the North West Shelf exploration permits and that are in force from time to time. (2) For the purposes of this Act, where 2 or more production licences are specified in a project combination certificate that is in force, there shall be taken to be a petroleum project in relation to such of the production licences as are in force. (2A) If: (a) the production licences that are related to the Bass Strait exploration permit are specified in a project combination certificate; and (b) another production licence that is related to the Bass Strait exploration permit comes into force at a time when the project combination certificate is in force; the certificate has effect after that time as if the production licence referred to in paragraph (b) were specified in the certificate. (2B) For the purposes of this Act, there shall be taken to be included, as part of any petroleum project within the meaning of subsection (1) or (2), the carrying on of any processing of external petroleum wholly or partly using the operations, facilities and other things comprising the project: (a) in the case of a production licence referred to in subsection (1)—while that licence is in force; or (b) in the case of 2 or more production licences referred to in subsection (2)—while any of those licences are in force. Note: Under subsection (4), the operations, facilities and other things comprising the project are limited to those used in relation to petroleum recovered from the one or more production licence areas in relation to the project. (2C) For the purposes of this Act, there is taken to be included, as part of any petroleum project within the meaning of subsection (1) or (2), the carrying on of any processing of internal petroleum wholly or partly using the operations, facilities and other things comprising the project: (a) in the case of a production licence referred to in subsection (1)—while that licence is in force; or (b) in the case of 2 or more production licences referred to in subsection (2)—while any of those licences are in force. (3) For the purposes of this Act, where any one or more, but not all, of the production licences specified in a project combination certificate that is in force ceases to be in force, the combined project shall be taken to continue to exist in relation to the production licence or production licences that remain in force. (4) For the purposes of this Act, a reference to the operations, facilities and other things comprising a petroleum project is a reference to: (a) operations and facilities for the recovery of petroleum from the production licence area or production licence areas in relation to the project; and (b) such of the following as are carried on or provided: (i) operations and facilities involved in moving petroleum so recovered between any storage or processing facilities prior to the production of any marketable petroleum commodity from the petroleum; (ii) operations and facilities involved in the storage, processing or treatment of petroleum so recovered to produce any marketable petroleum commodity from the petroleum; (iii) operations and facilities involved in the moving or storage of any such marketable petroleum commodity before it becomes an excluded commodity; (iv) services, or facilities for the provision of services, in connection with the operations, facilities, amenities and services referred to in this section; (v) employee amenities in connection with the operations, facilities and services referred to in this section; (vi) operations and facilities, carried on or provided, for an environmental purpose, in relation to the carrying on or provision of the operations, facilities and services referred to in this section.

Amendment history: Amended by No 80 of 1991, item 4 | item 7, effective 1 July 1991 | Amended by No 101 of 2003, Sch 5 item 4 | Sch 5 item 7, effective Sch 5: 14 Oct 2003 | Amended by No 47 of 2009, Sch 3 item 29, effective Sch 3 (items 1–20): 1 July 2009 Sch 3 (items 21–36): 1 July 2008 Sch 3 (item 37): 12 May 2009 | Amended by No 18 of 2012, Sch 1 item 12 | Sch 1 item 26 | Sch 1 item 27 | Sch 1 item 28 | Sch 1 item 29 | Sch 1 item 30 | Sch 1 item 31 | Sch 1 item 32 | Sch 1 item 33 | Sch 1 item 34 | Sch 1 item 35 | Sch 3 item 6, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8)

s 20 — Combining of petroleum projects

(1) Subject to this section, where the Resources Minister, in relation to a production licence in relation to a petroleum project, having regard to: (a) the respective operations, facilities and other things that comprise, have comprised or will comprise that project and any other petroleum project or projects existing at the time at which the production licence came into force; and (b) the persons by whom or on whose behalf the operations, facilities and other things referred to in paragraph (a) are being, have been or are proposed to be carried on or provided; and (d) the geological, geophysical and geochemical and other features of the production licence areas in relation to the projects; considers that the projects are sufficiently related to be treated for the purposes of this Act as a single petroleum project, the Minister must issue a certificate under this subsection specifying the production licence or production licences in relation to each of the projects. (1A) Despite subsection (1), the Minister cannot specify, under that subsection, a production licence relating to the North West Shelf project. (3) For the purposes of paragraph (1)(a): (a) a reference to operations, facilities and other things that have comprised a petroleum project includes, in the case of a combined project, a reference to operations, facilities and other things that have comprised the pre ‑ combination projects in relation to the project; and (b) a reference to operations, facilities and other things that will comprise a petroleum project is a reference to operations, facilities and other things that are proposed, by the registered holders of, and the holders of registered interests in, the production licence or licences in relation to the project, to comprise the project. (4) The Minister may only issue a certificate under subsection (1) in respect of petroleum projects if: (a) a person who is entitled to receive at least half of the receipts from the sale of petroleum or marketable petroleum commodities produced in relation to each of the projects applies, in writing, to the Minister for the certificate to be issued; or (b) 2 or more persons who together are entitled to receive at least half of those receipts apply, in writing, to the Minister for the certificate to be issued. (4A) An application under subsection (4) may only be made within: (a) the period of 90 days beginning on the day the most recent production licence in relation to any of the petroleum projects came into force; or (b) if the Minister allows a longer period—that longer period. (4B) If the Minister does not make a decision on an application under subsection (4) before the later of the following times: (a) the end of the period of 90 days after the application is made; (b) if the Minister extends that period under subsection (4C)—the end of the extended period; the Minister is taken, for the purposes of subsection (12), to have refused the application at that time. (4C) The Minister may, by written notice to the applicant or applicants, extend the period mentioned in subsection (4B) if the Minister is satisfied that it is necessary to do so to adequately consider the application. (5) A certificate under subsection (1) shall not be repealed, rescinded, revoked, amended or varied otherwise than: (a) under subsection (8); (b) pursuant to a decision of the Tribunal or an order of a court; or (c) to correct an error in the certificate. (6) A certificate under subsection (1) shall come into force on the issue of the certificate and continue in force until the issue of a subsequent certificate under that subsection specifying production licences that include such of the production licences specified in the first ‑ mentioned certificate as are in force at the time when the subsequent certificate is issued. (7) Where, in deciding whether or not to issue a certificate under subsection (1) specifying 2 or more production licences, the Resources Minister has reasonable grounds to believe that an operation, facility or other thing is being, has been or is proposed to be carried on or provided, or is being, has been or is proposed to be carried on or provided in a particular manner or by particular persons, for the sole or dominant purpose of obtaining the issue of the certificate, the Minister must disregard the carrying on or provision of the operation, facility or thing. (8) Where, after the issue of a certificate under subsection (1), it appears to the Resources Minister that, having regard to information that was not available to the Minister at the time of issue of the certificate, the certificate would not, by reason of the application of subsection (7), have been issued if the Minister had been aware of the information at the time of issue of the certificate, the Minister must cancel the certificate and upon the cancellation the certificate shall be deemed never to have been issued. (9) The Minister must: (a) within 30 days after the issue of a certificate under subsection (1) or the cancellation under subsection (8) of such a certificate, arrange for notice in writing of the issue or cancellation: (i) to be sent to the holder or holders of the production licences concerned and to the Commissioner; and (ii) to be published in the Gazette ; and (b) within 30 days after making a decision to refuse an application for the issue of a certificate under subsection (1), arrange for notice in writing of the decision to be sent to the person or persons making the application. (10) A notice under subsection (9) shall include a statement to the effect that, subject to the Administrative Review Tribunal Act 2024 , application may be made to the Tribunal for review of the decision to issue or cancel the certificate, or to refuse the application, as the case may be, by or on behalf of the person or persons whose interests are affected by the decision. (11) Any failure to comply with the requirement of subsection (10) in relation to a decision does not affect the validity of the decision. (12) Application may be made to the Tribunal for a review of: (a) a decision of the Resources Minister to issue a certificate under subsection (1); or (b) a decision of the Minister refusing an application to issue such a certificate; or (c) a decision of the Minister under subsection (8) to cancel such a certificate.

Amendment history: Amended by No 88 of 2009, Sch 5 item 214 | Sch 5 item 215 | Sch 5 item 216 | Sch 5 item 217 | Sch 5 item 218 | Sch 5 item 219 | Sch 5 item 220 | Sch 5 item 221 | Sch 5 item 222 | Sch 5 item 224 | Sch 5 item 225, effective Sch 5 (items 209–230): 18 Sept 2009 (s 2(1) item 7) | Amended by No 18 of 2012, Sch 1 item 36 | Sch 1 item 37 | Sch 1 item 38 | Sch 1 item 39 | Sch 1 item 40, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 88 of 2013, effective Sch 7 (items 76–136, 138–166): 1 July 2012 (s 2(1) items 15, 17) Sch 7 (item 137): 29 Sept 2012 (s 2(1) item 16) | Amended by No 43 of 2019, Sch 1 item 78 | Sch 1 item 79 | Sch 1 item 80 | Sch 1 item 81 | Sch 1 item 82 | Sch 1 item 83 | Sch 2 item 29 | Sch 2 item 30 | Sch 2 item 31, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1) | Amended by No 38 of 2024, Sch 1 item 12 | Sch 1 item 19, effective Sch 1 (item 68): 14 Oct 2024 (s 2(1) item 2)

s 21 — Rule—must be a notional taxable profit in relation to receiving project

The person may only transfer the expenditure to the receiving project in relation to the transfer year if there is a notional taxable profit in relation to the person, the receiving project and the transfer year.

s 22 — Taxable profit

(1) Where, in relation to a petroleum project and a year of tax, the assessable receipts derived by a person exceed the sum of: (a) the deductible expenditure incurred by the person; and (b) the total of the amounts (if any) transferred by the person to the project in relation to the year of tax under section 45A; and (c) the total of the amounts (if any) transferred by another person to the person in relation to the project and the year of tax under section 45B; the person is taken for the purposes of this Act to have a taxable profit in relation to the project and the year of tax of an amount equal to the excess. Note: because of subsection 45D(2), some transfers of expenditure are taken to be transfers of amounts compounded in accordance with Part 7 of Schedule 1. Allowing for Greater Sunrise apportionments (2) However, if the petroleum project is a Greater Sunrise project, the person is taken for the purposes of this Act to have a taxable profit in relation to the project and the year of tax of an amount worked out using the following formula: where: apportionment percentage figure has the meaning given by subsection 2C(2). initial taxable profit means the amount of taxable profit worked out under subsection (1) ignoring this subsection. Deemed taxable profit for certain liquefied natural gas projects (3) If: (a) a person derives assessable petroleum receipts or assessable tolling receipts in relation to a petroleum project in a year of tax; and (b) sales gas is, or will be, produced from some or all of the petroleum that is, or will be, recovered from the project; and (c) the person is a party to an arrangement (within the meaning of section 50); and (d) it is intended, as a result of carrying out the arrangement, that sales gas (which may or may not be the sales gas mentioned in paragraph (b)) is to be wholly or primarily processed into liquefied natural gas; and (e) the person enters, or will enter, into such arrangements on a regular or consistent basis; and (f) the person is not taken under subsection (1) or (2) to have a taxable profit in relation to the project and the year of tax; and (g) the project is not excluded under subsection (5) for the year of tax; the person is taken for the purposes of this Act to have a taxable profit in relation to the project and the year of tax of an amount (the denied deduction amount ) equal to 10% of the assessable receipts derived by the person in relation to the project in the year of tax. (4) However, if the project is a Greater Sunrise project, the person is taken for the purposes of this Act to have a taxable profit in relation to the project and the year of tax of an amount (the denied deduction amount ) worked out using the following formula: where: apportionment percentage figure has the meaning given by subsection 2C(2). initial taxable profit means the amount of taxable profit worked out under subsection (3) ignoring this subsection. (5) For the purposes of paragraph (3)(g), a project is excluded for a year of tax if: (a) the year of tax is the first financial year in which assessable petroleum receipts are derived by the person in relation to the project or one of the subsequent 7 financial years; or (b) the person incurs resource tax expenditure or starting base expenditure in the year of tax in relation to the project; or (c) the person is not taken to incur any amounts under subsection 33(3), 34(3), 34A(4), 35(3), 35C(5), 35E(3), 35F(2) or 36(1) (including because of section 48 or 48A) in relation to the project: (i) on the first day of the year of tax; or (ii) on the first day of a previous year of tax (other than the first year of tax in which the person incurred deductible expenditure in relation to the project).

Amendment history: Repealed and substituted by No 80 of 1991, item 8, effective 1 July 1991 | Amended by No 47 of 2004, effective Sch 2 (items 1–18): 7 Feb 2007 | Amended by No 18 of 2012, Sch 2 item 3 | Sch 2 item 26, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 37 of 2024, Sch 5 item 3 | Sch 5 item 35F | Sch 5 item 7 | Sch 5 item 10 | Sch 5 item 12 | Sch 5 item 16 | Sch 5 item 17 | Sch 5 item 18, effective Sch 5: 1 July 2024 (s 2(1) item 4)

s 22B — Effect of GST etc. on assessable receipts

(1) For the purposes of this Division, a reference to consideration receivable, to value receivable or to an amount receivable does not include an amount equal to: (a) any GST payable on the supply for which the consideration, value or amount was receivable; or (b) any increasing adjustments that relate to that supply. (2) For the purposes of this Division, a reference to the sale price of property does not include an amount equal to: (a) any GST payable on the sale; or (b) any increasing adjustments that relate to that sale. (3) For the purposes of this Division, a reference to expenses payable in relation to a sale does not include an amount equal to: (a) any input tax credit to which you are entitled; or (b) any decreasing adjustment that you have; in relation to those expenses.

Amendment history: Inserted by No 177 of 1999, effective Sch 8 (items 7–18): 1 July 2000 (s 2(9))

s 23 — Assessable receipts

(1) For the purposes of this Act, but subject to subsections (2) and (3), a reference to the assessable receipts derived by a person in a financial year in relation to a petroleum project (not being an ineligible project in relation to the financial year) is a reference to the total receipts of the following kinds, whether of a capital or revenue nature, derived by the person in the financial year in relation to the project: (a) assessable petroleum receipts; (aa) assessable tolling receipts; (b) assessable exploration recovery receipts; (c) assessable property receipts; (d) assessable miscellaneous compensation receipts; (e) assessable employee amenities receipts; (f) assessable incidental production receipts. (2) For the purposes of this Act, the assessable receipts derived by a person in a financial year in relation to a combined project (not being an ineligible project in relation to the financial year) shall include any amounts of a kind referred to in paragraphs (1)(a) to (f) (inclusive) derived by the person during the financial year in relation to the pre ‑ combination projects in relation to the combined project. (3) For the purposes of this Act, assessable receipts, in relation to a Greater Sunrise project, are to be calculated as if each amount of the petroleum recovered from a Greater Sunrise unit reservoir became the property of the person who recovered that amount as soon as it was recovered. (4) Subsection (3) has effect despite subsection 286(2) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 .

Amendment history: Amended by No 101 of 2003, Sch 5 item 8, effective Sch 5: 14 Oct 2003 | Amended by No 47 of 2004, effective Sch 2 (items 1–18): 7 Feb 2007 | Amended by No 49 of 2007, Sch 7 item 94, effective Sch 1 (items 88–94, 97): 1 July 2008 (s 2(1) item 2) | Amended by No 117 of 2008, Sch 3 item 49A | Sch 4 item 7B, effective Sch 2 (items 59–65), Sch 3 (items 31AA, 31AB, 33–50, 52–54) and Sch 4 (items 5–9): 22 Nov 2008 (s 2(1) items 3, 4, 6) | Amended by No 18 of 2012, Sch 2 item 1 | Sch 2 item 2, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8)

s 24 — Assessable petroleum receipts

(1) For the purposes of this Act, a reference to assessable petroleum receipts derived by a person in relation to a petroleum project is a reference to: (a) where any petroleum from the project is or was sold, whether processed or unprocessed, before any marketable petroleum commodity is or was produced from it—the consideration receivable, less any expenses payable, by the person in relation to the sale; and (b) where any marketable petroleum commodity (other than sales gas to which paragraph (d) applies) produced from petroleum from the project becomes or became an excluded commodity by virtue of being sold—the consideration receivable, less any expenses payable, by the person in relation to the sale; and (c) where any marketable petroleum commodity (other than sales gas to which paragraph (e) applies) produced from petroleum from the project becomes or became an excluded commodity otherwise than by virtue of being: (i) sold; or (ii) treated or processed, or moved, for re ‑ injection or destruction or for use in carrying on or providing operations, facilities or other things of a kind referred to in section 37, 38 or 39 in relation to the petroleum project; so much of the market value of the commodity immediately before it becomes or became an excluded commodity, or, where there is insufficient evidence of that market value, of such amount as, in the opinion of the Commissioner, is fair and reasonable, as is taken by section 26 to be derived by the person; and (d) where: (i) any sales gas produced from petroleum from the project becomes or became an excluded commodity by virtue of being sold; and (iii) the regulations apply to the sales gas; the amount worked out in accordance with the regulations; and (e) where the regulations apply to any sales gas produced from petroleum from the project, and that sales gas becomes or became an excluded commodity otherwise than by virtue of being: (i) sold; or (ii) treated or processed, or moved, for re ‑ injection or destruction or for use in carrying on or providing operations, facilities or other things of a kind referred to in section 37, 38 or 39 in relation to the petroleum project; the amount worked out in accordance with the regulations. (2) In this section: petroleum from the project means any petroleum or a constituent of petroleum: (a) that is recovered from the production licence area or areas in relation to the petroleum project in question; or (b) that is external petroleum in relation to the project.

Amendment history: Amended by No 169 of 2001, Sch 1 item 2 | Sch 1 item 3 | Sch 1 item 4 | Sch 1 item 5 | Sch 1 item 8, effective Sch 1 (items 1–9): 1 Apr 2002 (s 2(3)) Sch 1 (items 10–12, 15): 1 Oct 2001 s 2(1)) | Amended by No 101 of 2003, Sch 5 item 9 | Sch 5 item 11 | Sch 5 item 12, effective Sch 5: 14 Oct 2003 | Amended by No 78 of 2006, Sch 5 item 4 | Sch 5 item 5 | Sch 5 item 6 | Sch 5 item 7, effective Sch 1 (items 1–10, 12), Sch 2, Sch 3 (items 1, 2, 4–9), Sch 4 (items 1–24, 38) and Sch 5: 1 July 2006 (s 2(1) items 2, 3, 5–11) Sch 3 (item 3): 1 July 2008 (s 2(1) item 4) | Amended by No 18 of 2012, Sch 2 item 14 | Sch 2 item 16, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 43 of 2019, Sch 1 item 66 | Sch 1 item 67 | Sch 2 item 32 | Sch 2 item 33 | Sch 2 item 34 | Sch 2 item 35, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1)

s 24A — Assessable tolling receipts

For the purposes of this Act, a reference to assessable tolling receipts derived by a person in relation to a petroleum project is a reference to the consideration receivable by the person in relation to the processing of external petroleum, or internal petroleum, in relation to the project.

Amendment history: Inserted by No 101 of 2003, effective Sch 5: 14 Oct 2003 | Amended by No 47 of 2009, Sch 3 item 30, effective Sch 3 (items 1–20): 1 July 2009 Sch 3 (items 21–36): 1 July 2008 Sch 3 (item 37): 12 May 2009

s 25 — Assessable exploration recovery receipts

For the purposes of this Act, a reference to assessable exploration recovery receipts derived by a person in relation to a petroleum project is a reference to: (a) where any petroleum, or a constituent of petroleum, recovered from the eligible exploration or recovery area (other than any production licence area) in relation to the project is or was sold, whether processed or unprocessed, before any marketable petroleum commodity is or was produced from it—the consideration receivable, less any expenses payable, by the person in relation to the sale; (b) where any marketable petroleum commodity produced from petroleum recovered from the area to which paragraph (a) applies becomes or became an excluded commodity by virtue of being sold—the consideration receivable, less any expenses payable, by the person in relation to the sale; and (c) where any marketable petroleum commodity produced from petroleum recovered from the area to which paragraph (a) applies becomes or became an excluded commodity otherwise than by virtue of being: (i) sold; or (ii) treated or processed, or moved, for re ‑ injection or destruction or for use in carrying on or providing operations, facilities or other things of a kind referred to in section 37, 38 or 39 in relation to the petroleum project; so much of the market value of the commodity immediately before it becomes or became an excluded commodity, or, where there is insufficient evidence of that market value, of such amount as, in the opinion of the Commissioner, is fair and reasonable, as is taken by section 26 to be derived by the person.

s 26 — Amounts notionally derived where no sale of petroleum etc.

Where paragraph 24(1)(c) or 25(c) applies in relation to any marketable petroleum commodity, the market value or other amount referred to in that paragraph in relation to the marketable petroleum commodity shall, for the purposes of this Act, be taken to have been derived by the person or persons entitled to receive receipts from the sale of marketable petroleum commodities produced in relation to the project and, where there are 2 or more such persons, in the same respective shares as those persons are or were entitled to receive those receipts.

Amendment history: Amended by No 169 of 2001, Sch 1 item 6, effective Sch 1 (items 1–9): 1 Apr 2002 (s 2(3)) Sch 1 (items 10–12, 15): 1 Oct 2001 s 2(1)) | Amended by No 136 of 2024, Sch 6 item 10, effective Sch 6 (items 10, 11): 11 Dec 2024 (s 2(1) item 11)

s 27 — Assessable property receipts

(1) For the purposes of this Act, a reference to assessable property receipts derived by a person in relation to a petroleum project is a reference to: (a) the consideration receivable by the person in respect of the disposal, loss or destruction of property in respect of which capital expenditure being eligible real expenditure in relation to the project (including in the case of a combined project any pre ‑ combination project in relation to the project) was incurred by the person; (b) the value of property in respect of which capital expenditure of a kind referred to in paragraph (a) was incurred by the person, as at the date of any other termination of the use of the property in relation to the project; (c) the amount or value receivable by the person under a policy of insurance or otherwise in respect of damage to property in respect of which capital expenditure of a kind referred to in paragraph (a) was incurred by the person; (d) any amount receivable by the person from the hiring or leasing out of, or the granting of rights to use, property that is or was also being used in relation to the project, being property in respect of which capital expenditure of a kind referred to in paragraph (a) was incurred by the person; or (e) any amount receivable by the person from the provision of information obtained: (i) from any survey, appraisal or study in respect of which eligible real expenditure in relation to the project (including in the case of a combined project any pre ‑ combination project in relation to the project) was incurred by the person; or (ii) otherwise as a result of the incurring by the person of such expenditure. (2) In paragraph (1)(a), a reference to the consideration in respect of the disposal, loss or destruction of property is a reference to: (a) where the property is or was sold (whether with or without other property) for a specified price—the sale price of the property, less the expenses of the sale of the property, or less such part of the expenses of the sale of the property together with the other property as the Commissioner determines; (b) where the property is or was sold with other property and a specified price is or was not allocated to the property—such part of the total sale price, less the expenses of the sale, as the Commissioner determines; (c) where the property is or was disposed of otherwise than by sale—the value of the property at the date of disposal; or (d) where the property is or was lost or destroyed—the amount or value receivable under a policy of insurance or otherwise in respect of the loss or destruction. (3) Any future closing ‑ down expenditure in relation to licensed property and a petroleum project must be taken into account in working out the assessable property receipts derived by a person in relation to the project to the extent that the assessable property receipts are worked out under paragraph (1)(b) in relation to the termination of the use of the licensed property. (4) Assessable property receipts worked out under paragraph (1)(b) are taken to be zero if future closing ‑ down expenditure taken into account under subsection (3) equals or exceeds what would have been those assessable property receipts if the future closing ‑ down expenditure was not taken into account . Note: In this case, an extra amount may be included in the person’s closing ‑ down expenditure in relation to the project: see subsection 39(3).

Amendment history: Amended by No 78 of 2006, Sch 3 item 6 | Sch 3 item 8, effective Sch 1 (items 1–10, 12), Sch 2, Sch 3 (items 1, 2, 4–9), Sch 4 (items 1–24, 38) and Sch 5: 1 July 2006 (s 2(1) items 2, 3, 5–11) Sch 3 (item 3): 1 July 2008 (s 2(1) item 4)

s 28 — Assessable miscellaneous compensation receipts

(1) For the purposes of this Act, a reference to assessable miscellaneous compensation receipts derived by a person in relation to a petroleum project is a reference to amounts of the following kinds: (a) amounts receivable by the person by way of insurance, compensation or indemnity in respect of: (i) the loss or destruction, or the loss of any profit caused by the loss or destruction, of any petroleum, or constituent of petroleum, recovered or recoverable from the eligible exploration or recovery area in relation to the project (including in the case of a combined project any pre ‑ combination project in relation to the project), being a loss or destruction that occurred before a marketable petroleum commodity had been produced from the petroleum; (ii) the loss or destruction, or the loss of any profit caused by the loss or destruction, of any marketable petroleum commodity produced from petroleum recovered from the area referred to in subparagraph (i), being a loss or destruction that occurred before the commodity became an excluded commodity; or (iii) the loss of any amount that would otherwise have been an assessable receipt derived by the person in relation to the project; (b) amounts receivable by the person in respect of eligible real expenditure incurred by the person in relation to the project (including in the case of a combined project any pre ‑ combination project in relation to the project), being amounts by way of: (i) indemnity or compensation for the incurring of the expenditure; (ii) refund of the expenditure; or (iii) rebate, discount or commission in respect of the expenditure. (2) However, an amount referred to in subparagraph (b)(ii) that is a refund of resource tax expenditure is increased by dividing the amount by the rate mentioned in section 5 of the Petroleum Resource Rent Tax (Imposition—General) Act 2012 .

Amendment history: Amended by No 18 of 2012, Sch 2 item 3 | Sch 2 item 4 | Sch 6 item 1, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 83 of 2014, Sch 1 item 317 | Sch 1 item 339 | Sch 2 item 60Q, effective Sch 1 (items 316–318, 330): 1 July 2014 (s 2(1) item 2)

s 29 — Matters dealt with in this Part

This Part sets out the rules relating to the transfer by a loss company of transferable exploration expenditure from a petroleum project or an exploration right to a profit company in relation to a petroleum project and the transfer year. In this Part, the project or right from which the expenditure is transferred is called the transferring entity and the project in relation to which the expenditure is transferred is called the receiving project . Note: Special rules apply in relation to the transfer of Greater Sunrise exploration expenditure: see Part 1A of this Schedule.

s 29A — Assessable incidental production receipts

(1) For the purposes of this Act, a reference to assessable incidental production receipts derived by a person in relation to a petroleum project is a reference to the consideration receivable, less the amount mentioned in subsection (2), by the person in relation to the sale of a product, or the provision of a service relating to carbon capture and storage, if: (a) it has been recovered, extracted, provided or produced in carrying on operations, facilities or other things of a kind mentioned in section 37, 38 or 39 in relation to the project; and (b) it is not petroleum or a marketable petroleum commodity; and (c) eligible real expenditure in relation to the project (including, in the case of a combined project, any pre ‑ combination project in relation to the project) was incurred by the person in relation to those operations, facilities, or other things. Example: Excess electricity that is produced as part of the petroleum project is sold. (2) The amount is the sum of any expenditure (whether of a capital or revenue nature) incurred by the person to the extent that: (a) it is incurred in deriving assessable incidental production receipts in relation to the petroleum project; and (b) it is not eligible real expenditure in relation to the petroleum project.

Amendment history: Inserted by No 18 of 2012, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 43 of 2019, Sch 2 item 36, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1)

s 30 — Reduction of amount of assessable property etc. receipts

Where: (a) but for this section, a person would, in relation to a petroleum project, derive for the purposes of this Act an amount (in this section referred to as the assessable amount ) of assessable property receipts, assessable miscellaneous compensation receipts, assessable employee amenities receipts or assessable incidental production receipts in relation to property in respect of which eligible real expenditure was incurred by the person in relation to the project; and (b) the Commissioner considers that, because section 42 applied in relation to the eligible real expenditure or for any other reason, a proportion only of the assessable amount is attributable to the eligible real expenditure; the person shall be taken for the purposes of this Act to have derived only that proportion of the assessable amount.

Amendment history: Amended by No 18 of 2012, Sch 2 item 6, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8)

s 31 — Rule—continuity of interest within company group

Main rule (1) The loss company may transfer the expenditure to the profit company in relation to the receiving project and the transfer year only if: (a) from the start of the financial year in which the expenditure was actually incurred, until the end of the transfer year—the company which held the receiving interest at any particular time was, at that time: (i) a group company in relation to the company which held the loss interest at that time; or (ii) unless the time is at the end of the transfer year—the company which held the loss interest at that time; and (b) when the expenditure was actually incurred: (i) unless section 41 applies to the expenditure—the company which actually incurred the expenditure held the loss interest in the transferring entity; or (ii) if section 41 applies to the expenditure—the company taken under subparagraph 41(1)(a)(ii) to have made the payment of the expenditure held the loss interest in the transferring entity. Receiving project or transferring entity not in existence at particular time (2) For the purposes of subclause (1): (a) if the starting day for the receiving project was after the start of the financial year in which the expenditure was incurred—during the period from the start of that year until the start of the starting day, the company which held the receiving interest at the start of the starting day is taken to have held the receiving interest; and (b) if the finishing day for the receiving project was before the end of the transfer year—during the period from the start of the finishing day until the end of the transfer year, the profit company is taken to have held the receiving interest; and (c) if the starting day for the transferring entity was after the start of the financial year in which the expenditure was incurred—during the period from the start of that year until the start of the starting day, the company which held the loss interest at the start of the starting day is taken to have held the loss interest; and (d) if the finishing day for the transferring entity was before the end of the transfer year—during the period from the start of the finishing day until the end of the transfer year, the loss company is taken to have held the loss interest. (2A) If: (a) at a time (the cessation time ) after the expenditure was incurred and on or after 1 July 1993, the loss company ceased to hold any interest in relation to the transferring entity; and (b) the cessation did not occur because of a transaction to which section 48 applies; subclause (1) does not require the loss company to have held an interest in relation to the transferring entity at a time after the cessation time. Starting day for receiving project in later financial year than when expenditure actually incurred (3) If the starting day for the receiving project was in a later financial year than the financial year in which the expenditure was incurred, the loss company may transfer the expenditure only if (in addition to the other requirements of this clause) the company which held the receiving interest at the start of the starting day was the company which had been granted the exploration permit by reference to which the starting day is determined. Definitions (4) In this clause: loss interest means an interest held in the transferring entity by the loss company: (a) at the end of the transfer year; or (b) if the finishing day for the transferring entity was before the end of the transfer year—immediately before the start of the finishing day. receiving interest means an interest held in the receiving project by the profit company: (a) at the end of the transfer year; or (b) if the finishing day for the receiving project was before the end of the transfer year—immediately before the start of the finishing day.

Amendment history: Amended by No 80 of 1991, item 9 | item 10, effective 1 July 1991 | Amended by No 18 of 2012, Sch 2 item 8 | Sch 2 item 9 | Sch 2 item 10 | Sch 2 item 13 | Sch 4 item 6 | Sch 4 item 7 | Sch 6 item 10, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 43 of 2019, Sch 2 item 37 | Sch 2 item 38 | Sch 2 item 39, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1)

s 31A — Eligible real expenditure and the Bass Strait project

Despite section 45, this Division applies in relation to the Bass Strait project, or a project in relation to which the Bass Strait project is a pre ‑ combination project, as if eligible real expenditure could be incurred in relation to the Bass Strait project at any time, including a time before 1 July 1990.

Amendment history: Inserted by No 80 of 1991, effective 1 July 1991

s 31AA — Eligible real expenditure—North West Shelf project

Despite section 45, this Division applies in relation to the North West Shelf project as if eligible real expenditure could be incurred in relation to the project at any time, including a time before 1 July 2012.

Amendment history: Inserted by No 18 of 2012, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Repealed and substituted by No 43 of 2019, Sch 2 item 40, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1)

s 31B — Effect of input tax credits etc. on deductible expenditure

For the purposes of this Division, a reference to an amount of expenditure incurred, or a liability incurred, by a person does not include an amount equal to: (a) any input tax credit to which the person is entitled; or (b) any decreasing adjustments that the person has; in relation to that expenditure or liability.

Amendment history: Inserted by No 177 of 1999, effective Sch 8 (items 7–18): 1 July 2000 (s 2(9))

s 32 — Deductible expenditure

For the purposes of this Act, a reference to the deductible expenditure incurred by a person in a financial year in relation to a petroleum project (not being an ineligible project in relation to the financial year) is a reference to the total expenditure of the following kinds incurred by the person in the financial year in relation to the project: (a) class 1 augmented bond rate general expenditure; (b) class 1 augmented bond rate exploration expenditure; (c) class 2 uplifted general expenditure; (d) class 1 GDP factor expenditure; (e) class 2 uplifted exploration expenditure; (f) class 2 GDP factor expenditure; (fa) resource tax expenditure; (fc) starting base expenditure; (fd) augmented denied deductible expenditure; (g) closing ‑ down expenditure.

Amendment history: Amended by No 80 of 1991, item 11, effective 1 July 1991 | Amended by No 18 of 2012, Sch 3 item 7 | Sch 4 item 8, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 43 of 2019, Sch 2 item 41, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1) | Amended by No 37 of 2024, Sch 5 item 4, effective Sch 5: 1 July 2024 (s 2(1) item 4)

s 33 — Class 1 augmented bond rate general expenditure

(1) For the purposes of this Act, a reference to the class 1 augmented bond rate general expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project, the Bass Strait project or the North West Shelf project) is a reference to the sum of: (a) any amount of class 1 general project expenditure actually incurred by the person in relation to the project in the financial year, not being expenditure incurred more than 5 years before the production licence in relation to the project came into force; and (b) any amount that is taken by subsection (3) or Division 5 to be class 1 augmented bond rate general expenditure incurred by the person in relation to the project in the financial year. (2) For the purposes of this Act, a reference to the class 1 augmented bond rate general expenditure incurred by a person in a financial year in relation to a combined project is a reference to the sum of: (a) any amount of class 1 general project expenditure actually incurred by the person in relation to the project in the financial year (not being expenditure incurred before the project combination certificate in relation to the project came into force); (b) any amount that is taken by subsection (3) or Division 5 to be class 1 augmented bond rate general expenditure incurred by the person in relation to the project in the financial year; and (c) where the financial year is the year in which the project combination certificate in relation to the project came into force—any amount of class 1 general project expenditure, or any amount that is taken by subsection (3) or Division 5 to be class 1 augmented bond rate general expenditure, incurred by the person in relation to the pre ‑ combination projects in relation to the project in the financial year. (3) For the purposes of subsection (1) or (2), where the class 1 augmented bond rate general expenditure incurred by a person in a financial year in relation to a petroleum project exceeds the assessable receipts derived by the person in the financial year in relation to the project, an amount ascertained in accordance with the formula , where: A is the amount of the excess; and B is the long ‑ term bond rate in relation to the financial year; shall be taken to be class 1 augmented bond rate general expenditure incurred by the person in relation to the project on the first day of the next succeeding financial year. (4) In this section: class 1 general project expenditure means general project expenditure actually incurred before 1 July 1990.

Amendment history: Amended by No 80 of 1991, item 12, effective 1 July 1991 | Amended by No 18 of 2012, Sch 3 item 8, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8)

s 34 — Class 1 augmented bond rate exploration expenditure

(1) For the purposes of this Act, a reference to the class 1 augmented bond rate exploration expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project, the Bass Strait project or the North West Shelf project) is a reference to the sum of: (a) any amount of class 1 exploration expenditure actually incurred by the person in relation to the project in the financial year, not being expenditure incurred more than 5 years before the production licence in relation to the project came into force; and (b) any amount that is taken by subsection (3), subsection 36(1) or Division 5 to be class 1 augmented bond rate exploration expenditure incurred by the person in relation to the project in the financial year. (2) For the purposes of this Act, a reference to the class 1 augmented bond rate exploration expenditure incurred by a person in a financial year in relation to a combined project is a reference to the sum of: (a) any amount of class 1 exploration expenditure actually incurred by the person in relation to the project in the financial year (not being expenditure incurred before the project combination certificate in relation to the project came into force); (b) any amount that is taken by subsection (3), subsection 36(1) or Division 5 to be class 1 augmented bond rate exploration expenditure incurred by the person in relation to the project in the financial year; and (c) where the financial year is the year in which the project combination certificate in relation to the project came into force—any amount of class 1 exploration expenditure, or any amount that is taken by subsection (3), paragraph 36 (1) (b) or Division 5 to be class 1 augmented bond rate exploration expenditure, incurred by the person in relation to the pre ‑ combination projects in relation to the project in the financial year. (3) For the purposes of subsection (1) or (2), where the sum of the class 1 augmented bond rate general expenditure and the class 1 augmented bond rate exploration expenditure incurred by a person in a financial year in relation to a petroleum project exceeds the assessable receipts derived by the person in the financial year in relation to the project, an amount ascertained in accordance with the formula , where: A is so much of the excess as does not exceed the amount of the class 1 augmented bond rate exploration expenditure; and B is the long ‑ term bond rate in relation to the financial year; shall be taken to be class 1 augmented bond rate exploration expenditure incurred by the person in relation to the project on the first day of the next succeeding financial year. (4) In this section: class 1 exploration expenditure means exploration expenditure actually incurred before 1 July 1990.

Amendment history: Amended by No 80 of 1991, item 13 | item 14, effective 1 July 1991 | Amended by No 18 of 2012, Sch 3 item 9, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8)

s 34A — Class 2 uplifted general expenditure

(1) For the purposes of this Act, a reference to the class 2 uplifted general expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project, the Bass Strait project or the North West Shelf project) is a reference to the sum of: (a) any amount of class 2 general project expenditure actually incurred by the person in relation to the project in the financial year, not being expenditure incurred more than 5 years before the earlier of the following: (i) the day specified in the production licence notice in relation to the project; (ii) the day the production licence was issued in relation to the project; and (b) any amount that is taken by subsection (4) or Division 5 to be class 2 uplifted general expenditure incurred by the person in relation to the project in the financial year. (2) For the purposes of this Act, a reference to the class 2 uplifted general expenditure incurred by a person in a financial year in relation to a combined project is a reference to the sum of: (a) any amount of class 2 general project expenditure actually incurred by the person in relation to the project in the financial year (not being expenditure incurred before the project combination certificate in relation to the project came into force); and (b) any amount that is taken by subsection (4) or Division 5 to be class 2 uplifted general expenditure incurred by the person in relation to the project in the financial year; and (c) if the financial year is the year in which the project combination certificate in relation to the project came into force—any amount of class 2 general project expenditure, or any amount that is taken by subsection (4) or Division 5 to be class 2 uplifted general expenditure, incurred by the person in relation to the pre ‑ combination projects in the financial year. (3) For the purposes of this Act, a reference to the class 2 uplifted general expenditure incurred by a person in a financial year in relation to the Bass Strait project or the North West Shelf project is a reference to the sum of: (a) any amount of class 2 general project expenditure actually incurred by the person in relation to the project in the financial year; and (b) any amount that is taken by subsection (4) or Division 5 to be class 2 uplifted general expenditure incurred by the person in relation to the project in the financial year. (4) For the purposes of subsection (1), (2) or (3), if the sum of: (a) the class 1 augmented bond rate general expenditure; and (b) the class 1 augmented bond rate exploration expenditure; and (c) the class 2 uplifted general expenditure; incurred by a person in a financial year (in this subsection called the assessable year ) in relation to a petroleum project exceeds the assessable receipts derived by the person in the assessable year in relation to the project, the person is taken to incur, in relation to the project and on the first day of the next financial year, an amount of class 2 uplifted general expenditure worked out in accordance with the formula: where: Available excess means so much of the excess as does not exceed the class 2 uplifted general expenditure incurred in the assessable year. uplift rate : (a) if: (i) the project is not a combined project; and (ii) the production licence in relation to the project is a post ‑ June 2019 licence; and (iii) any person derived assessable petroleum receipts in relation to the project at any time after the licence was granted; and (iv) the assessable year is 10 or more years after the first financial year in which such assessable petroleum receipts were derived; the uplift rate is the long ‑ term bond rate in relation to the assessable year plus 1; or (b) if: (i) the project is a combined project; and (ii) one or more post ‑ June 2019 licences are, or have been, in force in relation to the project, or a pre ‑ combination project in relation to the project; and (iii) any person derived assessable petroleum receipts in relation to the project, or a pre ‑ combination project in relation to the project, at any time after the first such licence was granted; and (iv) the assessable year is 10 or more years after the first financial year in which such assessable petroleum receipts were derived; the uplift rate is the long ‑ term bond rate in relation to the assessable year plus 1; or (c) if paragraphs (a) and (b) do not apply—the uplift rate is the long ‑ term bond rate in relation to the assessable year plus 1.05. (5) In this section: class 2 general project expenditure means general project expenditure actually incurred on or after 1 July 1990 (other than starting base expenditure). post ‑ June 2019 licence : a production licence is a post ‑ June 2019 licence if the earlier of the following is on or after 1 July 2019: (a) if a notice was given under subsection 258(7) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 in relation to the application for the licence—the date specified in the notice as the last date on which information was provided; (b) the day the production licence is granted.

Amendment history: Inserted by No 80 of 1991, effective 1 July 1991 | Amended by No 169 of 2001, Sch 1 item 10, effective Sch 1 (items 1–9): 1 Apr 2002 (s 2(3)) Sch 1 (items 10–12, 15): 1 Oct 2001 s 2(1)) | Amended by No 17 of 2006, Sch 2 item 90 | Sch 2 item 95, effective Sch 2 (items 73–96): 1 July 2008 (s 2(1) item 2) | Amended by No 117 of 2008, Sch 3 item 50 | Sch 4 item 8, effective Sch 2 (items 59–65), Sch 3 (items 31AA, 31AB, 33–50, 52–54) and Sch 4 (items 5–9): 22 Nov 2008 (s 2(1) items 3, 4, 6) | Amended by No 18 of 2012, Sch 3 item 10 | Sch 3 item 11 | Sch 3 item 12 | Sch 4 item 9, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 43 of 2019, Sch 1 item 1 | Sch 1 item 2 | Sch 1 item 3 | Sch 1 item 4 | Sch 1 item 5 | Sch 1 item 7 | Sch 1 item 8 | Sch 1 item 9 | Sch 1 item 10 | Sch 1 item 11 | Sch 1 item 12 | Sch 1 item 13 | Sch 2 item 42, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1)

s 35 — Class 1 GDP factor expenditure

(1) For the purposes of this Act, a reference to the class 1 GDP factor expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project, the Bass Strait project or the North West Shelf project) is a reference to the sum of: (a) any amount of class 1 GDP factor expenditure actually incurred by the person in relation to the project in the financial year, being expenditure incurred more than 5 years before the earlier of the following: (i) the day specified in the production licence notice in relation to the project; (ii) the day the production licence was issued in relation to the project; and (b) any amount that is taken by subsection (3), subsection 36(1) or Division 5 to be class 1 GDP factor expenditure incurred by the person in relation to the project in the financial year. (2) For the purposes of this Act, a reference to the class 1 GDP factor expenditure incurred by a person in a financial year in relation to a combined project is a reference to the sum of: (a) any amount that is taken by subsection (3), subsection 36(1) or Division 5 to be class 1 GDP factor expenditure incurred by the person in relation to the project in the financial year; and (b) where the financial year is the year in which the project combination certificate in relation to the project came into force—any amount that is taken by subsection (3), paragraph 36(1)(b) or Division 5 to be class 1 GDP factor expenditure incurred by the person in relation to the pre ‑ combination projects in relation to the combined project in the financial year. (3) For the purposes of subsection (1) or (2), if the sum of: (a) the class 1 augmented bond rate general expenditure; and (b) the class 1 augmented bond rate exploration expenditure; and (c) the class 2 uplifted general expenditure; and (d) the class 1 GDP factor expenditure; incurred by a person in a financial year in relation to a petroleum project exceeds the assessable receipts derived by the person in the financial year in relation to the project, an amount ascertained in accordance with the formula AB , where: A is so much of the excess as does not exceed the amount of the GDP factor expenditure; and B is the class 1 GDP factor in relation to the financial year; shall be taken to be class 1 GDP factor expenditure incurred by the person in relation to the project on the first day of the next succeeding financial year. (4) In this section: class 1 GDP factor expenditure means general project expenditure incurred in any financial year, or exploration expenditure incurred before 1 July 1990.

Amendment history: Amended by No 80 of 1991, item 15 | item 16, effective 1 July 1991 | Amended by No 18 of 2012, Sch 3 item 13, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 21 of 2015, Sch 2 item 15 | Sch 7 item 44, effective Sch 7 (items 23, 24): 20 Mar 2015 (s 2(1) item 15) Sch 7 (item 44): 1 July 2012 (s 2(1) item 16) | Amended by No 43 of 2019, Sch 1 item 14, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1)

s 35A — Class 2 uplifted exploration expenditure

(1) For the purposes of this Act, the amount of class 2 uplifted exploration expenditure that a person is taken to have incurred in a financial year in relation to a petroleum project is to be determined in accordance with Part 2 of Schedule 1. Note: the following provisions of Part 2 of Schedule 1 provide for a person to be taken to have incurred an amount of class 2 uplifted exploration expenditure: • paragraph 8(4)(a) • paragraph 8(5)(a). (2) The expenditure to which an amount of class 2 uplifted exploration expenditure is, according to Part 2 of Schedule 1, attributable, must not be counted again as expenditure incurred, or taken to be incurred, by a person: (a) when working out the liability of the person to tax in relation to a later financial year; or (b) when working out, in accordance with Part 2, 3 or 4 of Schedule 1, whether there is expenditure that is transferable by the person in relation to a later financial year. Note: the following provisions of Part 2 of Schedule 1 deal with the expenditure to which an amount of class 2 uplifted exploration expenditure is attributable: • paragraph 8(4)(b) • paragraph 8(5)(b) and subclauses 8(6) and (7).

Amendment history: Inserted by No 80 of 1991, effective 1 July 1991 | Amended by No 18 of 2012, Sch 2 item 27 | Sch 2 item 28 | Sch 2 item 29 | Sch 2 item 30, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 43 of 2019, Sch 1 item 15 | Sch 1 item 16 | Sch 1 item 17 | Sch 1 item 18 | Sch 1 item 19, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1)

s 35B — Class 2 GDP factor expenditure

(1) For the purposes of this Act, the amount of class 2 GDP factor expenditure that a person is taken to have incurred in a financial year in relation to a petroleum project is to be determined in accordance with Part 3 of Schedule 1. Note: the following provisions of Part 3 of Schedule 1 provide for a person to be taken to have incurred an amount of class 2 GDP factor expenditure: • paragraph 12(3)(a) • paragraph 12(4)(a). (2) The expenditure to which an amount of class 2 GDP factor expenditure is, according to Part 3 of Schedule 1, attributable, must not be counted again as expenditure incurred, or taken to be incurred, by a person: (a) when working out the liability of the person to tax in relation to a later financial year; or (b) when working out, in accordance with Part 2, 3 or 4 of Schedule 1, whether there is expenditure that is transferable by the person in relation to a later financial year. Note: the following provisions of Part 3 of Schedule 1 deal with the expenditure to which an amount of class 2 GDP factor expenditure is attributable: • paragraph 12(3)(b) • paragraph 12(4)(b) and subclauses 12(5) and (6).

Amendment history: Inserted by No 80 of 1991, effective 1 July 1991 | Amended by No 18 of 2012, Sch 3 item 14 | Sch 2 item 31 | Sch 2 item 32 | Sch 2 item 33 | Sch 2 item 34, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8)

s 35C — Resource tax expenditure

(1) For the purposes of this Act, a reference to the resource tax expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project) is a reference to the sum of: (a) any amount of resource tax expenditure actually incurred by the person in relation to the project in the financial year; and (b) any amount that is taken by subsection (5) or Division 5 to be resource tax expenditure incurred by the person in relation to the project in the financial year. (2) For the purposes of this Act, a reference to the resource tax expenditure incurred by a person in a financial year in relation to a combined project is a reference to the sum of: (a) any amount of resource tax expenditure actually incurred by the person in relation to the project in the financial year (not being expenditure incurred before the project combination certificate in relation to the project came into force); and (b) any amount that is taken by subsection (5) or Division 5 to be resource tax expenditure incurred by the person in relation to the project in the financial year; and (c) if the financial year is the year in which the project combination certificate in relation to the project came into force—any amount of resource tax expenditure, or any amount that is taken by subsection (5) or Division 5 to be resource tax expenditure, incurred by the person in relation to the pre ‑ combination projects in the financial year. (3) For the purposes of subsections (1) or (2), a reference to resource tax expenditure incurred by a person in a financial year in relation to a petroleum project is a reference to resource tax expenditure incurred by the person in the year to the extent the expenditure: (a) is incurred in relation to petroleum recovered, on or after 1 July 2012, from the production licence area for the project; and (b) is incurred under an Australian law (other than this Act); and (c) is expenditure to which one of the following applies: (i) the expenditure is a royalty, or would be a royalty if the petroleum were owned by the Commonwealth just before the recovery of the petroleum; (ii) the expenditure is an excise; (iii) the expenditure is an amount calculated by reference to the revenue, expenditure or profits made or incurred by a person in relation to petroleum recovered from the production licence area for the project; (iv) the expenditure is an amount calculated by reference to the value, at the wellhead, of petroleum recovered from the production licence area for the project. (4) However, the amount of resource tax expenditure under subsection (3) is increased by dividing it by the rate of tax mentioned in section 5 of the Petroleum Resource Rent Tax (Imposition—General) Act 2012 . (5) For the purposes of subsection (1) or (2), if the sum of the following incurred by a person in a financial year (the assessable year ) in relation to a petroleum project exceeds the assessable receipts derived by the person in the assessable year in relation to the project: (a) the class 1 augmented bond rate general expenditure; (b) the class 1 augmented bond rate exploration expenditure; (c) the class 2 uplifted general expenditure; (d) the class 1 GDP factor expenditure; (e) the class 2 uplifted exploration expenditure; (f) the class 2 GDP factor expenditure; (g) the resource tax expenditure; the person is taken to incur, in relation to the project and on the first day of the next financial year, an amount of resource tax expenditure worked out in accordance with the formula: where: augmented bond rate means the long term bond rate in relation to the assessable year plus 1.05. available excess means so much of the excess as does not exceed the resource tax expenditure incurred in the assessable year. (6) Despite subsection (3), if a person (the eligible person ) incurs a liability to make a payment to procure expenditure of a kind mentioned in subsection (3) by another person, then the expenditure is taken to have been incurred by the eligible person, and not by the other person, to the extent of the liability.

Amendment history: Inserted by No 18 of 2012, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 88 of 2013, Sch 7 item 88 | Sch 7 item 114 | Sch 7 item 119, effective Sch 7 (items 76–136, 138–166): 1 July 2012 (s 2(1) items 15, 17) Sch 7 (item 137): 29 Sept 2012 (s 2(1) item 16) | Amended by No 43 of 2019, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1)

s 35E — Starting base expenditure

(1) For the purposes of this Act, a reference to the starting base expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project) is a reference to: (a) in relation to the starting base financial year for the project—the person’s starting base amount in relation to the interest; or (b) in relation to any subsequent financial year—any amount that is taken by subsection (3) or Division 5 to be starting base expenditure incurred by the person in relation to the project in the financial year. (1A) However, if: (a) the petroleum project is the North West Shelf project; and (b) in the starting base financial year for the project or in a later financial year, a production licence relating to the project comes into existence; and (c) the production licence is derived from an exploration permit, or a retention lease, that existed at the start of 1 July 2012; subsection (1) has effect as if the starting base expenditure incurred by the person in that financial year in relation to the project includes an amount equal to the person’s starting base expenditure in that financial year in relation to the petroleum project that would, but for subsection 19(1B), relate to that production licence. (1B) For the purposes of this Act, starting base expenditure incurred by a person in the starting base financial year is taken to be incurred on the first day of the starting base financial year. (2) For the purposes of this Act, a reference to the starting base expenditure incurred by a person in a financial year in relation to a combined project is a reference to: (a) any amount that is taken by subsection (3) or Division 5 to be starting base expenditure incurred by the person in relation to the project in the financial year; or (b) if the project combination certificate in relation to the project came into force in the financial year: (i) any amount of starting base expenditure; or (ii) any amount that is taken by subsection (3) or Division 5 to be starting base expenditure; incurred by the person in relation to the pre ‑ combination projects in relation to the project in the financial year. (3) For the purposes of subsection (1) or (2), if the sum of: (a) the class 1 augmented bond rate general expenditure; and (b) the class 1 augmented bond rate exploration expenditure; and (c) the class 2 uplifted general expenditure; and (d) the class 1 GDP factor expenditure; and (e) the class 2 uplifted exploration expenditure; and (f) the class 2 GDP factor expenditure; and (g) the resource tax expenditure; and (i) the starting base expenditure; incurred by a person in a financial year (the assessable year ) in relation to the petroleum project exceeds the assessable receipts derived by the person in the assessable year in relation to the project, the person is taken to incur, in relation to the project and on the first day of the next financial year, an amount of starting base expenditure worked out in accordance with the formula: where: augmented bond rate means the long term bond rate in relation to the assessable year plus 1.05. available excess means so much of the excess as does not exceed the starting base expenditure incurred in the assessable year. (4) References in paragraph (1)(a) and subsections (1A) and (1B) to the starting base financial year for a petroleum project are references to the earliest financial year, after 30 June 2012, in which a production licence relating to the project is in existence.

Amendment history: Inserted by No 18 of 2012, Sch 4 item 12 | Sch 4 item 13 | Sch 4 item 14 | Sch 4 item 15, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 88 of 2013, Sch 7 item 89 | Sch 7 item 90 | Sch 7 item 98 | Sch 7 item 114 | Sch 7 item 119, effective Sch 7 (items 76–136, 138–166): 1 July 2012 (s 2(1) items 15, 17) Sch 7 (item 137): 29 Sept 2012 (s 2(1) item 16) | Amended by No 43 of 2019, Sch 2 item 45 | Sch 2 item 46 | Sch 2 item 47 | Sch 2 item 48 | Sch 2 item 60, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1)

s 35F — Augmented denied deductible expenditure

(1) For the purposes of this Act, a reference to the augmented denied deductible expenditure incurred by a person in a financial year in relation to a petroleum project is a reference to: (a) if the petroleum project is not a combined project—any amount that is taken by subsection (2) or Division 5 to be augmented denied deductible expenditure incurred by the person in relation to the project in the financial year; or (b) if the petroleum project is a combined project: (i) any amount that is taken by subsection (2) or Division 5 to be augmented denied deductible expenditure incurred by the person in relation to the project in the financial year; or (ii) if the financial year is the year in which the project combination certificate in relation to the project came into force—each amount that is taken by subsection (2) or Division 5 to be augmented denied deductible expenditure incurred by the person in relation to the pre ‑ combination projects in the financial year. Amounts uplifted from previous financial year (2) If: (a) a person has a denied deduction amount worked out under subsection 22(3) or (4) in relation to a project and a financial year (the assessable year ) ; and (b) the sum of: (i) the deductible expenditure incurred by the person in relation to the project in the assessable year; and (ii) the total of the amounts (if any) transferred by the person to the project in relation to the assessable year under section 45A; and (iii) the total of the amounts (if any) transferred by another person to the person in relation to the project and the assessable year under section 45B; equals or exceeds the assessable receipts derived by the person in the assessable year in relation to the project; the person is taken to incur, in relation to the project and on the first day of the next financial year, an amount of augmented denied deductible expenditure worked out in accordance with the formula: where: available excess means the sum of: (a) so much of the excess as does not exceed the amount (if any) of augmented denied deductible expenditure incurred by the person in relation to the project in the assessable year; and (b) the denied deduction amount. LTBR means the long ‑ term bond rate in relation to the assessable year plus 1.

Amendment history: Inserted by No 37 of 2024, effective Sch 5: 1 July 2024 (s 2(1) item 4)

s 36 — Class 1 augmented bond rate exploration and class 1 GDP factor expenditures in relation to project groups

(1) Where there is a project group in relation to a person in relation to a year of tax, the following provisions have effect: (a) in relation to any petroleum project in the group other than the last occurring project—where there is a carry forward expenditure amount of the person in relation to the project in relation to the year of tax, that amount shall be taken to be class 1 augmented bond rate exploration expenditure or class 1 GDP factor expenditure, as the case requires, incurred by the person in the year of tax in relation to the next occurring project and the person shall not be taken by subsection 34(3) to have incurred class 1 augmented bond rate exploration expenditure, or by subsection 35(3) to have incurred class 1 GDP factor expenditure, in relation to the first ‑ mentioned project on the first day of the next succeeding year of tax; (b) in relation to the last occurring petroleum project in the group—where, but for this paragraph, the person would be taken by subsection 34(3) to have incurred an amount of class 1 augmented bond rate exploration expenditure, or by subsection 35(3) to have incurred an amount of class 1 GDP factor expenditure, in relation to the project on the first day of the next succeeding year of tax, that expenditure shall be taken to have been incurred instead by the person on that day in relation to the first occurring of such of the projects in the group as are petroleum projects on that day. (2) Where 2 or more project groups, in relation to a person in relation to a financial year, are related project groups in relation to each other, subsection (1) applies as if the petroleum projects in the groups were projects in a single project group in relation to the person in relation to the financial year. (3) For the purposes of this section: (a) where: (i) a financial year is a year of tax in relation to a person in relation to 2 or more petroleum projects (not including any ineligible project in relation to the financial year); and (ii) the production licence, or at least one of the production licences, in relation to each of the projects is related to the same exploration permit; the projects shall be taken to be in a project group in relation to the person in relation to the year of tax; (b) a reference to the relevant production licence in relation to a petroleum project is a reference to: (i) in the case of a combined project—the production licence in relation to the project that first came into force; and (ii) in any other case—the production licence in relation to the project; (c) petroleum projects in a project group in relation to a person in relation to a year of tax shall be taken to occur in the order in which the relevant production licences in relation to the projects came into force; and (d) a project group, in relation to a person in relation to a financial year, shall be taken to be a related project group in relation to another project group, in relation to the person in relation to the financial year, if: (i) one or more of the petroleum projects in the first ‑ mentioned group is a project in the second ‑ mentioned group; or (ii) one or more of the petroleum projects in the first ‑ mentioned group is a project in another project group that is a related project group in relation to the second ‑ mentioned project group under subparagraph (i) or this subparagraph. (4) Where, by reason of the application of subsection 34(3) or 35(3) in relation to a person in relation to a petroleum project in relation to a year of tax (in this subsection referred to as the relevant year of tax ), an amount of class 1 augmented bond rate exploration expenditure or class 1 GDP factor expenditure, as the case may be, would, if subsection (1) did not provide otherwise, be taken to be incurred by the person on the first day of the next succeeding year of tax, there shall, for the purposes of this section, be taken to be a carry forward expenditure amount in relation to the person in relation to the project in relation to the relevant year of tax equal to the amount that would so be taken to be incurred if: (a) in the case of an amount of class 1 augmented bond rate exploration expenditure—the formula in subsection 34(3) in its application in relation to the relevant year of tax consisted only of component A ; and (b) in the case of an amount of class 1 GDP factor expenditure—the formula in subsection 35(3) in its application in relation to the relevant year of tax consisted only of component A .

Amendment history: Amended by No 80 of 1991, item 17, effective 1 July 1991

s 36A — Transfer years that start on or after 1 July 2019

(1) This clause applies if the transfer year starts on or after 1 July 2019. (2) If the financial year in which the expenditure was incurred (the expenditure year ) is the financial year immediately before the transfer year then, for the purposes of subsection 45D(2), the transfer is taken to be of the amount worked out by multiplying the amount actually transferred by the long ‑ term bond rate in relation to the expenditure year plus 1.05. (3) If the financial year in which the expenditure was incurred (the expenditure year ) is not the financial year immediately before the transfer year, the following provisions apply: (a) work out, in relation to the expenditure year and each later financial year ending before the transfer year, an amount in accordance with the formula: where: transferred amount means: (i) in making the calculation in relation to the expenditure year—the amount of expenditure actually transferred; and (ii) in making the calculation in relation to a later financial year—the amount calculated under this paragraph in relation to the expenditure and the immediately preceding financial year. uplift rate , for the financial year in relation to which the calculation is being made (the calculation year ), means: (i) if the calculation year is 10 or more years after the expenditure year—the GDP factor for the calculation year; and (ii) otherwise—the long ‑ term bond rate in relation to the calculation year plus 1.05; (b) for the purposes of subsection 45D(2), the transfer is taken to be of the amount worked out under paragraph (a) in relation to the expenditure and the financial year immediately before the transfer year.

Amendment history: Inserted by No 41 of 2005, Sch 5 item 1, effective Sch 5 and Sch 10 (items 225–230): 1 Apr 2005 | Amended by No 17 of 2006, effective Sch 2 (items 73–96): 1 July 2008 (s 2(1) item 2) | Amended by No 18 of 2012, Sch 2 item 35, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 43 of 2019, Sch 1 item 22, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1)

s 36B — Designated frontier areas for 2005 to 2009

(1) For the purposes of the definition of designated frontier area , the Resources Minister may designate, in writing, up to (and including) 20% of potential exploration permit areas as frontier areas. Note: An amount of exploration expenditure incurred in respect of an area that is specified under this section might be increased by 150% (before the amount is further increased under Schedule 1): see section 36C. (2) The Resources Minister must not specify new areas for a calendar year after 2009. (3) The Resources Minister must publish an instrument made under subsection (1) in the Gazette . (4) An instrument made under subsection (1) is not a legislative instrument. (5) The Resources Minister may, by signed instrument, delegate his or her power under subsection (1) to an SES employee or an acting SES employee in the Resources Department. Note: The expressions SES employee and acting SES employee are defined in section 2B of the Acts Interpretation Act 1901 . (6) In this section: potential exploration permit area means an area or areas constituted by a block or blocks in respect of which applications for exploration permits have been invited, but not yet granted, under Part 2.2 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 .

Amendment history: Inserted by No 41 of 2005, Sch 5 item 1, effective Sch 5 and Sch 10 (items 225–230): 1 Apr 2005 | Amended by No 17 of 2006, Sch 2 item 92 | Sch 2 item 93 | Sch 2 item 95 | Sch 2 item 96, effective Sch 2 (items 73–96): 1 July 2008 (s 2(1) item 2) | Amended by No 117 of 2008, Sch 3 item 52 | Sch 3 item 53, effective Sch 2 (items 59–65), Sch 3 (items 31AA, 31AB, 33–50, 52–54) and Sch 4 (items 5–9): 22 Nov 2008 (s 2(1) items 3, 4, 6) | Amended by No 47 of 2009, Sch 3 item 37, effective Sch 3 (items 1–20): 1 July 2009 Sch 3 (items 21–36): 1 July 2008 Sch 3 (item 37): 12 May 2009 | Amended by No 88 of 2009, Sch 5 item 227 | Sch 5 item 229, effective Sch 5 (items 209–230): 18 Sept 2009 (s 2(1) item 7) | Amended by No 46 of 2011, Sch 2 item 910, effective Sch 2 (items 909, 910) and Sch 3 (items 10, 11): 27 Dec 2011 (s 2(1) items 7, 12) | Amended by No 18 of 2012, Sch 2 item 36, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 126 of 2015, Sch 1 item 478, effective Sch 1 (item 478): 5 Mar 2016 (s 2(1) item 2) | Amended by No 43 of 2019, Sch 1 item 23, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1)

s 36C — Uplifted frontier expenditure

For the purposes of this Act, the amount of uplifted frontier expenditure that a person is taken to have incurred in a financial year in relation to a petroleum project is worked out as follows:

Amendment history: Inserted by No 41 of 2005, Sch 5 item 3 | Sch 5 item 36A | Sch 5 item 36B | Sch 5 item 7 | Sch 5 item 8, effective Sch 5 and Sch 10 (items 225–230): 1 Apr 2005

s 37 — Exploration expenditure

(1) For the purposes of this Act, a reference to exploration expenditure incurred by a person in relation to a petroleum project is a reference to payments (not being excluded expenditure), whether of a capital or revenue nature, to the extent that they are made by the person: (a) in carrying on or providing operations and facilities involved in or in connection with exploration for petroleum in the eligible exploration or recovery area in relation to the project; and (b) in carrying on or providing such of the following as are or have been carried on or provided: (i) operations and facilities involved in the recovery of any petroleum from the eligible exploration or recovery area (other than any production licence area) in relation to the project; (ii) operations and facilities involved in moving any petroleum so recovered to or between any storage or processing facilities prior to the production of any marketable petroleum commodity from the petroleum; (iii) operations and facilities involved in the storage, processing or treating of any petroleum so recovered to produce any marketable petroleum commodity from the petroleum; (iv) operations and facilities involved in the moving or storage of any such marketable petroleum commodity before it becomes an excluded commodity; (v) services, or facilities for the provision of services, in connection with the operations, facilities, amenities and services referred to in this section; (vi) employee amenities in connection with the operations, facilities and services referred to in this section; (vii) operations and facilities, carried on or provided, for an environmental purpose, in relation to the carrying on or provision of the operations, facilities and services referred to in this section; and (c) in procuring another person to stabilise, transport, store, recover or process petroleum recovered from the eligible exploration or recovery area (other than any production licence area) in relation to the project, if that stabilisation, transportation, storage, recovery or processing constitutes: (i) the processing of internal petroleum in relation to the project; or (ii) the processing of external petroleum in relation to another petroleum project; and includes any exploration permit, retention lease or other fee (not being an excluded fee) paid by the person, to the extent that the payment relates to the carrying on or providing of any operations, facilities or other things referred to in this section. (2) Where, by reason of the application of subsection 5(3), exploration for petroleum during a period is taken to occur in a retention lease area or areas in relation to a retention lease or leases related to an exploration permit, any liability incurred during that period to pay an exploration permit fee shall, for the purposes of subsection (1), be taken to relate proportionally to the carrying on of operations involved in exploration for petroleum in the retention lease area or areas and in the remainder of the exploration permit area in relation to the exploration permit, according to the respective sizes of those areas. (3) For the purposes of this section, a person is taken to make a payment when the person becomes liable to make the payment. (4) Subject to subsection (5), for the purposes of paragraph (1)(a), exploration for petroleum means: (a) discovering petroleum; or (b) identifying the extent of discovered petroleum; or (c) identifying the nature of discovered petroleum. (5) For the purposes of paragraph (1)(a), exploration for petroleum does not include determining: (a) any of the following in relation to the recovery of petroleum: (i) commercial viability; (ii) economic feasibility; (iii) technical feasibility; or (b) how to recover any petroleum; (6) Paragraphs (5)(a) and (b) do not limit each other.

Amendment history: Amended by No 101 of 2003, Sch 5 item 14 | Sch 5 item 15 | Sch 5 item 16 | Sch 5 item 17, effective Sch 5: 14 Oct 2003 | Amended by No 47 of 2009, Sch 3 item 31, effective Sch 3 (items 1–20): 1 July 2009 Sch 3 (items 21–36): 1 July 2008 Sch 3 (item 37): 12 May 2009 | Amended by No 18 of 2012, Sch 2 item 29A | Sch 3 item 16 | Sch 2 item 2, effective Sch 1 (items 1–10, 12–46), Sch 2 (items 1–13), Sch 3, Sch 4, Sch 5 (items 1, 6–12) and Sch 6 (items 1, 2, 9–12): 1 July 2012 (s 2(1) items 2, 4–7, 9–14) Sch 1 (item 11): never commenced (s 2(1) item 3) Sch 2 (items 14–16): 29 Sept 2012 (s 2(1) item 8) | Amended by No 124 of 2013, Sch 6 item 1 | Sch 6 item 2 | Sch 6 item 3 | Sch 6 item 9 | Sch 9 item 38 | Sch 9 item 4, effective Sch 6: 29 June 2013 (s 2(1) item 1) | Amended by No 96 of 2014, Sch 1 item 52, effective Sch 1 (items 47–52, 122–124): 30 Sept 2014 (s 2(1) item 2) | Amended by No 43 of 2019, effective Sch 1 (items 2–83) and Sch 2 (items 1–77, 85–92): 1 July 2019 (s 2(1) item 1) | Amended by No 67 of 2024, Sch 3 item 8, effective Sch 2 and Sch 3 (items 8–10): 1 Oct 2024 (s 2(1) item 7)

s 38 — General project expenditure

(1) For the purposes of this Act, a reference to general project expenditure incurred by a person in relation to a petroleum project is a reference to payments (not being excluded expenditure, exploration expenditure or closing ‑ down expenditure), whether of a capital or revenue nature, to the extent that they are made by the person: (a) in carrying on or providing operations and facilities preparatory to the activities referred to in paragraph (b), including in carrying out any feasibility or environmental study; and (b) in carrying on or providing the operations, facilities and other things comprising the project; and (c) in purchasing, as part of the project, external petroleum, or internal petroleum, in relation to the project; and (d) in procuring another person to stabilise, transport, store, recover or process petroleum recovered from the production licence area or areas in relation to the project, if that stabilisation, transportation, storage, recovery or processing constitutes: (i) the processing of internal petroleum in relation to the project; or (ii) the processing of external petroleum in relation to another petroleum project; and includes any production licence or other fee (not being an excluded fee) paid by the person, to the extent that the payment relates to the carrying on or providing of any operations, facilities or other things referred to in this section. (2) To avoid doubt, carrying on or providing the operations, facilities and other things comprising the project referred to in paragraph (1)(b) includes carrying on or providing the operations, facilities and other things in relation to the processing of external petroleum, or internal petroleum, in relation to the project. (3) For the purposes of this section, a person is taken to make a payment when the person becomes liable to make the payment.

Amendment history: Amended by No 101 of 2003, Sch 5 item 18 | Sch 5 item 19, effective Sch 5: 14 Oct 2003 | Amended by No 47 of 2009, Sch 3 item 32 | Sch 3 item 33 | Sch 3 item 34, effective Sch 3 (items 1–20): 1 July 2009 Sch 3 (items 21–36): 1 July 2008 Sch 3 (item 37): 12 May 2009 | Amended by No 124 of 2013, Sch 6 item 4 | Sch 6 item 5 | Sch 6 item 6 | Sch 6 item 9 | Sch 9 item 1 | Sch 9 item 2, effective Sch 6: 29 June 2013 (s 2(1) item 1)

s 39 — Closing ‑ down expenditure

(1) For the purposes of this Act, a reference to closing ‑ down expenditure incurred by a person in relation to a petroleum project is a reference to payments (not being excluded expenditure), whether of a capital or revenue nature, to the extent that they are made by the person in carrying on operations involved in closing down the project, including in any environmental restoration as a consequence of closing down the project. (2) For the purposes of this Act, if: (a) on the termination of a petroleum project, a person disposes of all of the person’s property in respect of which the person incurred capital expenditure that is eligible real expenditure in relation to the project; and (b) there is no consideration receivable by the person in respect of the disposal; a reference to the closing ‑ down expenditure incurred by the person in relation to the project includes a reference to any consideration given by the person for the disposal, to the extent that the consideration relates to the future closing ‑ down expenditure in relation to the project. (3) For the purposes of this Act, if a person’s assessable property receipts under paragraph 27(1)(b) in relation to a petroleum project are taken to be zero because of subsection 27(4), a reference to closing ‑ down expenditure incurred by a person in relation to the project includes a reference to an amount equal to the difference between: (a) the future closing ‑ down expenditure in relation to the project; and (b) the amount that would, but for subsections 27(3) and (4), have been the person’s assessable property receipts in relation to the project. Example: A production licence of Petgas Ltd ceases to be in force on 24 October 2006, but the use of some facilities of the petroleum project in question continues to be permitted by an infrastructure licence that comes into force on that day. The value of the facilities on that day is $240,000, but there are future closing ‑ down costs that result in Petgas Ltd having a future closing ‑ down expenditure of $360,000. Under subsection 27(4), Petgas Ltd’s assessable property receipts under paragraph 27(1)(b) are taken to be zero. In addition, Petgas Ltd’s closing ‑ down expenditure includes an amount of $120,000 (the difference between its future closing ‑ down expenditure and the actual value of the facilities). (4) Closing ‑ down expenditure in relation to a petroleum project does not include closing ‑ down expenditure in relation to operations, facilities or other things comprising the project to the extent that: (a) the person has previously had assessable property receipts under paragraph 27(1)(a) in relation to the project and the consideration referred to in that paragraph took into account future closing ‑ down expenditure that relates to those operations, facilities or other things; or (b) the person has previously had assessable property receipts under paragraph 27(1)(b) in relation to the project and such future closing ‑ down expenditure was taken into account in working out those assessable property receipts; or (c) the person has previously had closing ‑ down expenditure in relation to the project that included such future closing ‑ down expenditure. However, this subsection does not apply if there has been a change in the ownership of those operations, facilities or other things after the assessable property receipts or closing ‑ down expenditure arose. (5) For the purposes of this section, a person is taken to make a payment when the person becomes liable to make the payment.

Amendment history: Amended by No 78 of 2006, Sch 3 item 6 | Sch 3 item 7 | Sch 3 item 8, effective Sch 1 (items 1–10, 12), Sch 2, Sch 3 (items 1, 2, 4–9), Sch 4 (items 1–24, 38) and Sch 5: 1 July 2006 (s 2(1) items 2, 3, 5–11) Sch 3 (item 3): 1 July 2008 (s 2(1) item 4) | Amended by No 124 of 2013, Sch 2 item 415 | Sch 6 item 7 | Sch 6 item 8 | Sch 6 item 9, effective Sch 6: 29 June 2013 (s 2(1) item 1)

s 40 — Bad debts

(1) Where: (a) a debt is a bad debt and is written off as such by a person during a financial year; and (b) the debt has been brought to account by the person as a receipt of a kind referred to in section 24, 25, 27, 28 or 29 derived by the person in any financial year in relation to a petroleum project; then, at the time at which the debt is written off and in relation to: (c) the petroleum project; or (d) if, at that time, there is a combined project in relation to which the petroleum project is a pre ‑ combination project—the combined project; the person shall be taken for the purposes of this Act to have incurred an amount of: (e) where at or before the time at which the debt is written off the person has not incurred any general project expenditure or closing ‑ down expenditure in relation to the petroleum project or the combined project (including any pre ‑ combination project in relation to the project)—exploration expenditure; (f) where at or before the time at which the debt is written off the person has incurred general project expenditure, but has not incurred any closing ‑ down expenditure, in relation to the petroleum project or the combined project (including any pre ‑ combination project in relation to the project)—general project expenditure; or (g) where at or before the time at which the debt is written off the person has incurred closing ‑ down expenditure in relation to the petroleum project or the combined project—closing ‑ down expenditure; equal to the amount of the debt. (2) If a debtor, after incurring a debt that has been brought to account as mentioned in paragraph (1) (b), becomes bankrupt or executes a personal insolvency agreement for the benefit of creditors: (a) where, in the opinion of the Commissioner, no amount will be paid on account of the debt—the debt; or (b) where, in the opinion of the Commissioner, an amount less than the amount of the debt will be paid on account of the debt—so much of the debt as exceeds the amount that, in the opinion of the Commissioner, will be so paid; shall be deemed to be a bad debt. (3) Where a person receives an amount in respect of a debt to which subsection (1) applies, that amount shall for the purposes of this Act be taken to be a receipt of the kind referred to in paragraph (1)(b) derived by the person in relation to: (a) the petroleum project referred to in that paragraph; or (b) if, at the time at which the amount is received, there is a combined project in relation to which the petroleum project referred to in that paragraph is a pre ‑ combination project—the combined project.

Amendment history: Amended by No 80 of 2004, effective Sch 1 (items 198, 212, 213, 215): 1 Dec 2004 (gaz 2004, No GN34)

s 41 — Effect of procuring the carrying on of operations etc. by others

(1) If a person (the eligible person ) makes or made a payment wholly or partly to procure the carrying on or providing of operations, facilities or other things of a kind referred to in section 37, 38 or 39 by another person, then: (a) for the purposes of this Act: (i) the operations, facilities or other things are taken to have been carried on or provided by the eligible person and not by the other person; and (ii) to the extent that the payment is to procure the carrying on or providing of the operations, facilities or other things—it is taken to have been made by the eligible person in carrying on or providing the operations, facilities or other things; and (b) if subsection (1A) does not apply to the other person in relation to the payment—to the extent that the payment is to procure the carrying on or providing of the operations, facilities or other things, the payment is taken, for the purposes of sections 37, 38, 39 and 44, to have the same character and nature as the operations, facilities or other things procured; and (c) if subsection (1A) applies to the other person in relation to the payment—to the extent that: (i) the payment is to procure the carrying on or providing of the operations, facilities or other things; and (ii) the payment relates to use of property on which the other person has incurred capital expenditure; the payment is taken, for the purposes of those sections, to have the same character and nature as the operations, facilities or other things procured; and (d) if subsection (1A) applies to the other person in relation to the payment—to the extent that: (i) the payment is to procure the carrying on or providing of the operations, facilities or other things; and (ii) the payment does not relate to use of property on which the other person has incurred capital expenditure; the payment is taken, for the purposes of those sections, to be of the same amount, and to have the same character and nature, as the expenditure the other person incurred in carrying on or providing the operations, facilities or other things procured. Note: If the payment is excluded expenditure, it will not be exploration expenditure under section 37, general project expenditure under section 38 or closing ‑ down expenditure under section 39. However, if paragraph (1)(d) applies to the payment, the amount taken to be excluded expenditure may be reduced under subsection (1D) of this section. (1A) This subsection applies to the other person in relation to a payment if, at the time the payment is made, the other person: (a) holds an interest in the petroleum project to which the operations, facilities or other things relate; or (b) is connected (within the meaning of section 328 ‑ 125 of the Income Tax Assessment Act 1997 ) with the eligible person. (1B) The amount of the other person’s expenditure referred to in paragraph (1)(d) is taken not to exceed so much of the amount of the eligible person’s payment as: (a) is a payment to procure the carrying on or providing of the operations, facilities or other things; and (b) does not relate to use of property on which the other person has incurred capital expenditure. (1C) If: (a) subsection (1A) applies to the other person in relation to the payment; and (b) the other person, to any extent, procures for: (i) the eligible person; or (ii) the eligible person and one or more persons who hold an interest in the project; the operations, facilities or other things from a third person who is connected (within the meaning of section 328 ‑ 125 of the Income Tax Assessment Act 1997 ) with the other person; the references in paragraph (1)(d) and subsection (1B) to the other person’s expenditure are taken (to the extent that carrying on or providing the operations, facilities or other things was procured from the third person) to be references to the third person’s expenditure. (1D) If the other person’s expenditure is reduced because of subsection (1B), sections 37, 38, 39 and 44 apply in relation to that expenditure as if it were reduced to the same extent. (2) This section does not apply if the other person carries on or provides the operations, facilities or other things as part of the processing of: (a) internal petroleum in relation to the petroleum project; or (b) external petroleum in relation to a petroleum project other than the project to which the operations, facilities or other things referred to in subsection (1) relate. (3) For the purposes of this section, a person is taken to make a payment when the person becomes liable to make the payment.

Amendment history: Amended by No 101 of 2003, Sch 5 item 21, effective Sch 5: 14 Oct 2003 | Amended by No 47 of 2009, Sch 3 item 35, effective Sch 3 (items 1–20): 1 July 2009 Sch 3 (items 21–36): 1 July 2008 Sch 3 (item 37): 12 May 2009 | Amended by No 88 of 2013, Sch 7 item 91, effective Sch 7 (items 76–136, 138–166): 1 July 2012 (s 2(1) items 15, 17) Sch 7 (item 137): 29 Sept 2012 (s 2(1) item 16) | Amended by No 124 of 2013, Sch 6 item 9 | Sch 6 item 10 | Sch 6 item 11, effective Sch 6: 29 June 2013 (s 2(1) item 1)

s 42 — Expenditure on property for partial project use

Where: (a) a person incurs or incurred eligible real expenditure in relation to a petroleum project; and (b) the eligible real expenditure is or was capital expenditure in respect of property for use only proportionally (the proportion of use of which is in this section referred to as the eligible proportion ) in carrying on or providing the operations, facilities or other things by reason of which the capital expenditure is eligible real expenditure of the person in relation to the project; the eligible proportion only of the eligible real expenditure shall be taken for the purposes of this Act to be the eligible real expenditure.