4AMeaning of gross production revenue and gross realisation

4A Meaning of gross production revenue and gross realisation (1) Gross production revenue, in relation to a production unit, means the sum of: (a) the gross values of saleable mineral commodities produced by the production unit in a royalty year that have been sold or removed without sale from that production unit; and (b) any amount received by way of insurance, indemnity or guarantee for, or in respect of, the loss of a saleable mineral commodity from the production unit the value of which, if the loss had not occurred, would have been taken into account in calculating gross production revenue; and (c) if, under a law in force in the Territory, the sale or disposition of a saleable mineral commodity from a production unit is prohibited, except to the persons or subject to the conditions as are specified, any amount received as the price or compensation for the mineral commodity.

Part I Preliminary Mineral Royalty Act 1982 10 (1A) Gross realisation, in relation to a production unit, means: (a) the sum of: (i) the gross production revenue from the production unit; and (ii) any gain realised on the sale of assets of the production unit; and (b) less: (i) any loss incurred on the sale of assets of the production unit; and (ii) any negative net value under section 10, brought forward from previous royalty years, that has been approved. (2) Where the sale price for saleable mineral commodities has been fully or partly paid more than 180 days before the purchaser takes physical delivery of the mineral commodities then, for the purposes of this section, the value of those mineral commodities shall be the sale price or part paid increased by such sum as would represent interest on the sale price or part paid at a rate equivalent to the arithmetic mean of the published daily yields on Australian Federal Securities most closely approximating 10 years to maturity plus 2% for the period commencing with the receipt of the sale price or part paid and ending with the delivery of the mineral commodity. (3) Where saleable mineral commodities are removed from a production unit without sale (whether on consignment or otherwise) then, for the purposes of this section, the mineral commodities shall be valued: (a) where guidelines have been promulgated pursuant to section 4E – in accordance with those guidelines; or (b) where the Secretary has given an opinion pursuant to section 4F – in conformity with that opinion; or (c) otherwise – in accordance with section 4AAA. (4) No interest earned which is referable to the operations of a production unit shall be taken into account in calculating gross production revenue or gross realisation.

Part I Preliminary Mineral Royalty Act 1982 11 4AAA Gross value of saleable mineral commodity removed without sale (1) This section applies if: (a) a saleable mineral commodity is removed from a production unit without sale, whether on consignment or otherwise; and (b) section 4A(3)(c) requires the commodity to be valued under this section. (2) For section 4A, the gross value of the saleable mineral commodity is: (a) the open market price for the commodity at the time it was removed from the production unit; or (b) if the royalty payer establishes and substantiates the gross value of the commodity to be another amount – that other amount (the alternative value). (3) If the saleable mineral commodity is dealt with by the royalty payer in circumstances that involve transfer pricing, any alternative value for subsection (2)(b) must be calculated: (a) if the royalty payer has been satisfactorily audited by the ATO – using the transfer pricing methodology and the figures accepted by the ATO as mentioned in subsection (4)(c) and (d); or (b) if an advance pricing arrangement applies in relation to the royalty payer's dealing with the commodity – using the transfer pricing methodology agreed to in that advance pricing arrangement; or (c) otherwise – in accordance with section 4AAB. (4) For subsection (3)(a), a royalty payer has been satisfactorily audited by the ATO if: (a) the ATO has conducted an audit of the royalty payer's affairs; and (b) the audit included consideration by the ATO of the transfer pricing methodology used by the royalty payer in accounting for the royalty payer's dealing with the commodity for the purposes of the ITAA; and