FACTBOX-Details of Australia new mining tax agreement

July 2, 2010

July 2 (Reuters) – Australia’s government and key mining firms have agreed a compromise on a mining tax for iron ore, coal, and onshore petroleum and gas. Here are some of the key terms of the tax and impact on the budget and tax policies.


— Tax will apply from July 1, 2012, as originally proposed.

— The new Minerals Resource Rent Tax (MRRT), renamed from mining super profit tax, will apply only to iron ore and coal projects while the Petroleum Resource Rent Tax (PRRT), currently applicable to offshore oil and gas projects will be extended to onshore oil and gas projects.

— The MRRT will be taxed at a rate of 30 per cent.

— The trigger point for the tax will be long term bond rate plus 7 per cent.

— The new scheme will recognise past investment through a credit that allows the market value of investments to be written down over a period of up to 25 years.

— Investment post 1 July 2012 can be written off immediately, rather than depreciated over a number of years.

— MRRT losses will be transferable to other iron ore and coal projects in Australia.

— Unutilised MRRT losses will be carried forward at the government long term bond rate plus 7 percent.

— Small miners with resource profits below A$50 million per annum will not have an MRRT liability.

— There will be no resource exploration rebate. Resource exploration costs will continue to be deductible in the normal way.

— The PRRT will remain taxed at a rate of 40 percent.


— The tax deal will reduce budget revenue by A$1.5 billion over the forward estimates.

— The company tax rate will be cut to 29 per cent from 2013-14 but will not be further reduced as earlier planned.

— Small companies will benefit from an early cut to the company tax rate to 29 per cent from 2012-13.

(Reporting by Balazs Koranyi)

((balazs.koranyi@thomsonreuters.com; +612 9373 1816;


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