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Commonwealth act
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Direct links to the current provisions in Minerals Resource Rent Tax Act 2012.
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An Act about a minerals resource rent tax, and for related purposes
Chapter 1—Introduction
This Act may be cited as the Minerals Resource Rent Tax Act 2012.
This Act commences on 1 July 2012.
The object of this Act is to ensure that the Australian community receives an adequate return for its *taxable resources, having regard to: (a) the inherent value of the resources; and (b) the non‑renewable nature of the resources; and (c) the extent to which the resources are subject to Commonwealth, State and Territory royalties. This Act does this by taxing above normal profits made by miners (also known as economic rents) that are reasonably attributable to the resources in the form and place they were in when extracted.
The Commissioner has the general administration of this Act.
Note: An effect of this provision is that people who acquire information under this Act are subject to the confidentiality obligations in Division 355 in Schedule 1 to the Taxation Administration Act 1953.
The *MRRT law extends to every external Territory other than the Australian Antarctic Territory.
The *MRRT law extends to acts, omissions, matters and things outside *Australia (except where a contrary intention appears).
This Act works out a miner’s MRRT liability on mining profits made from extracting taxable resources (mainly coal and iron ore) for a mining project interest for a year.
A mining project interest is principally a share of the output of an undertaking to extract taxable resources. Mining profit consists of mining revenue less mining expenditure. The sum of the miner’s mining profits for its interests are taxed at the MRRT rate.
Mining revenue is mainly that part of the revenue the miner makes from supplying, exporting or using extracted taxable resources (or things produced from them) that reasonably relates to the form and place the resources were in at their valuation point (usually when leaving the run‑of‑mine stockpile).
Mining expenditure is mainly the costs of finding and extracting the taxable resources and getting them to their valuation point.
Mining profit may be reduced by allowances for past losses, for the miner’s existing investments at 2 May 2010 (called a starting base allowance), and for the miner’s Commonwealth, State and Territory mining royalty amounts. Some allowances can be transferred to other mining project interests to reduce their mining profits.
If the total mining profits of the miner and certain connected entities is $75 million or less, a low‑profit offset will ensure that the miner has no liability for MRRT. The offset is phased‑out for profits between $75 million and $125 million.
(1) This Act is arranged in a way that reflects the principle of moving from the general case to the particular. (2) In this respect, the conceptual structure of the Act is something like a pyramid. The pyramid shape illustrates the way the MRRT law is organised, moving down from the central or core provisions at the top of the pyramid, to general rules of wide application and then to the more specialised topics.
Note: Provisions relating to the administration of the MRRT and to collection and recovery of amounts of MRRT or instalments of MRRT are contained in Schedule 1 to the Taxation Administration Act 1953.
(1) Many of the terms used in the MRRT law are defined. (2) Most defined terms in this Act are identified by an asterisk appearing at the start of the term: as in “*MRRT year”.
(1) Once a defined term has been identified by an asterisk, later occurrences of the term in the same subsection are not usually asterisked. (2) Terms are not asterisked in the non‑operative material contained in this Act.
Note: The non‑operative material is described in Division 4.
(3) The following basic terms used throughout the Act are not identified with an asterisk:
<table cellspacing="0" cellpadding="0" style="margin-left:0.25pt; border-collapse:collapse"><thead><tr><td colspan="2" style="width:343.55pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Common definitions that are not asterisked</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Item</span></p></td><td style="width:307.85pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Term</span></p></td></tr></thead><tbody><tr><td style="width:24.9pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:307.85pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Commissioner</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:307.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>extract</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:307.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>miner</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:307.85pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>mining project interest</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>5</span></p></td><td style="width:307.85pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>MRRT</span></p></td></tr></tbody></table>
Within a definition, the defined term is identified by bold italics.
(1) In addition to the operative provisions themselves, this Act contains other material to help readers identify accurately and quickly the provisions that are relevant to them and to help them understand those provisions. (2) This other material falls into 2 main categories, see sections 4‑5 and 4‑10.
(1) One category is the guide in many Divisions. Under the heading “What this Division is about’, a short explanation of the Division appears in boxed text. (2) Guides form part of this Act but are not operative provisions. In interpreting an operative provision, guides may only be considered for limited purposes. These are set out in subsection 245‑10(2).
The other category consists of material such as notes and examples. These also form part of the Act. They are usually distinguished by font size from the operative provisions, but are not kept separate from them.
Chapter 2—General liability rules
Table of sections
10‑1 A miner’s liability for MRRT
10‑5 The MRRT liability for a mining project interest
10‑10 MRRT allowances
10‑15 The effect of low profits on a miner’s liability for MRRT
10‑20 Payment of MRRT
10‑25 MRRT years
A miner is liable to pay MRRT, for an *MRRT year, equal to the sum of its *MRRT liabilities for each of its mining project interests for that year.
Note: For mining project interests, see Part 2‑2.
Work out the miner’s MRRT liability for a mining project interest for an *MRRT year as follows:
Method statement
Step 1. Work out the miner’s *mining profit for the mining project interest for the *MRRT year.
Note: For the mining profit, see Part 2‑3.
Step 2. Work out the miner’s *MRRT allowances for the mining project interest for the *MRRT year.
Note: For MRRT allowances, see section 10‑10.
Step 3. Subtract the *MRRT allowances from the *mining profit.
Step 4. Multiply the result by the *MRRT rate. This is the miner’s MRRT liability for the mining project interest for the *MRRT year.
Note 1: For the MRRT rate, see section 300‑1.
Note 2: If the result from step 3 is zero, the miner’s MRRT liability will also be zero.
The MRRT allowances, and the order in which they are applied in working out *MRRT liabilities, are as follows:
<table cellspacing="0" cellpadding="0" style="margin-left:0.25pt; border-collapse:collapse"><thead><tr><td colspan="3" style="width:343.5pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>MRRT allowances</span></p></td></tr><tr><td style="width:24.4pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Item</span></p></td><td style="width:208.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Order of applying the MRRT allowances</span></p></td><td style="width:88.6pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">See:</span></p></td></tr></thead><tbody><tr><td style="width:24.4pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:208.9pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-size:8pt; vertical-align:3pt">*</span><span>Royalty allowance</span></p></td><td style="width:88.6pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Part</span><span> </span><span>3</span><span>‑</span><span>1</span></p></td></tr><tr><td style="width:24.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:208.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-size:8pt; vertical-align:3pt">*</span><span>Transferred royalty allowance</span></p></td><td style="width:88.6pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Part</span><span> </span><span>3</span><span>‑</span><span>2</span></p></td></tr><tr><td style="width:24.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:208.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-size:8pt; vertical-align:3pt">*</span><span>Pre</span><span>‑</span><span>mining loss allowance</span></p></td><td style="width:88.6pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Part</span><span> </span><span>3</span><span>‑</span><span>3</span></p></td></tr><tr><td style="width:24.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>4</span></p></td><td style="width:208.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-size:8pt; vertical-align:3pt">*</span><span>Mining loss allowance</span></p></td><td style="width:88.6pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Part</span><span> </span><span>3</span><span>‑</span><span>4</span></p></td></tr><tr><td style="width:24.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>5</span></p></td><td style="width:208.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-size:8pt; vertical-align:3pt">*</span><span>Starting base allowance</span></p></td><td style="width:88.6pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Part</span><span> </span><span>3</span><span>‑</span><span>5</span></p></td></tr><tr><td style="width:24.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>6</span></p></td><td style="width:208.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-size:8pt; vertical-align:3pt">*</span><span>Transferred pre</span><span>‑</span><span>mining loss allowance</span></p></td><td style="width:88.6pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Part</span><span> </span><span>3</span><span>‑</span><span>6</span></p></td></tr><tr><td style="width:24.4pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-le
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