Document ID: chunk:federal_register_of_legislation:C2018C00085:clause:6_2:p8
Version: federal_register_of_legislation:C2018C00085
Segment Type: clause
Provision Reference: sch 6 cl 2 (pt 8/13)
Character Range: 101383–104279

prepared.

418‑85  Exploration credits must not exceed maximum exploration credit amount
 (1) An entity must not create *exploration credits for an income year (the current income year) of a total amount that exceeds the entity's *maximum exploration credit amount for the income year.
 (2) The entity's maximum exploration credit amount for the current income year is worked out as follows:

      Method statement
           Step 1. Ascertain which of the following is the smallest amount:

                (a) the entity's estimated *tax loss for the previous income year, as stated in the entity's declaration under paragraph 418‑70(1)(b);
                (b) the entity's actual tax loss for the previous income year;
                (c) the entity's estimated *greenfields minerals expenditure for the previous income year, as stated in the entity's declaration under paragraph 418‑70(1)(b);
                (d) the entity's actual greenfields minerals expenditure for the previous income year.

           Step 2. Multiply that smallest amount by the *corporate tax rate applying to the previous income year.
           Step 3. Multiply the result of step 2 by the modulation factor declared under section 418‑90 for the current income year. The result of this step is the entity's maximum exploration credit amount for the current income year.
 (3) In working out the entity's actual *tax loss for the previous income year for the purposes of step 1 of the method statement in subsection (2), reduce that tax loss by the sum of:
 (a) all *recoupments that the entity receives in relation to the entity's *greenfields minerals expenditure for the previous income year; and
 (b) any part of the entity's tax loss for the previous income year that would not be deductible in the current income year; and
 (c) if:
 (i) an amount has been included in the entity's assessable income because a *balancing adjustment event occurs for a *depreciating asset; and
 (ii) all or part of the amount of the deduction to which the entity is entitled under section 40‑25 for the previous income year in relation to the decline in value of the asset is included in the entity's greenfields minerals expenditure for that income year;
  so much of the amount of that deduction as was included in that greenfields minerals expenditure.
 (4) For the purposes of paragraph (3)(b), assume that the entity's assessable income for the current income year is sufficient to allow the entity to utilise the whole of that tax loss in relation to the current income year.
 (5) In working out the entity's actual *greenfields minerals expenditure for the previous income year for the purposes of step 1 of the method statement in subsection (2), reduce that greenfields minerals expenditure by the sum of:
 (a) all *recoupments that the entity receives in relation to the entity's greenfields minerals expenditure for