185‑15 Functional currency rules185‑15 Functional currency rules

#### 185‑15 Functional currency rules (1) If a choice under item 1 of the table in subsection 960‑60(1) of the Income Tax Assessment Act 1997 is in effect in relation to an \*entity for a period that includes an \*MRRT year, this section applies, despite section 185‑10, to: (a) each mining project interest the entity has in the MRRT year; and (b) each \*pre‑mining project interest the entity \*holds in the MRRT year. > Note: An entity cannot choose to use a functional currency for MRRT only. First translation—into applicable functional currency (2) First, for a purpose mentioned in subsection (3), an amount that is not in the currency that, under section 960‑70 of the Income Tax Assessment Act 1997, is the \*entity’s applicable functional currency for the relevant period, is to be translated into that applicable functional currency. (3) The purposes are as follows: (a) working out the \*entity’s \*instalment income for an \*instalment quarter that is part of the \*MRRT year; (b) working out the \*mining profit for each mining project interest the entity has in the \*MRRT year; (c) working out the \*pre‑mining profit for each \*pre‑mining project interest the entity \*holds in the MRRT year; (d) working out the amount of an \*allowance component relating to each mining project interest the entity has, and each pre‑mining project interest the entity holds, in the MRRT year; (e) working out whether the entity may choose under Division 200 to use the simplified MRRT method for the MRRT year; (f) working out a \*rehabilitation tax offset amount for the entity for the MRRT year. Examples of an amount (4) 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; (h) a monetary limit or other amount set out in this Act or any other law of the Commonwealth. Translation rule for first translation (5) An amount is to be translated into that applicable functional currency at the exchange rate that would be applicable if the translation were being done for the purposes of Subdivision 960‑D of the Income Tax Assessment Act 1997. (6) Subsections 185‑10(4) and (5) apply in relation to a translation done under subsection (2) of this section in the same way those subsections apply in relation to a translation under section 185‑10. > Note: Those subsections are about amounts that are elements in the calculation of other amounts. Second translation—into Australian currency (7) Second: (a) the \*instalment income for an \*instalment quarter that is part of the \*MRRT year is to be translated into Australian currency; and (b) the \*mining profit for each mining project interest the \*entity has, and the \*pre‑mining profit for each \*pre‑mining project interest the entity \*holds in the MRRT year is to be translated into Australian currency; and (c) to the extent that an \*allowance component is applied in working out an \*MRRT allowance for a mining project interest or pre‑mining project interest for an MRRT year, the allowance component is to be translated into Australian currency; and (d) each \*rehabilitation tax offset amount the entity has for the MRRT year is to be translated into Australian currency. > Note 1: There is no second translation for the simplified MRRT method because, if the miner chooses to use that method, it has no MRRT liability and all allowance components are extinguished: see section 200‑5. > Note 2: Not all MRRT allowances apply to pre‑mining project interests: see Division 140. Translation rule for second translation (8) The \*instalment income, \*mining profit, \*pre‑mining profit, applied \*allowance component or \*rehabilitation tax offset amount (as the case may be) is to be translated into Australian currency at the exchange rate that would be applicable if the translation were being done for the purposes of Subdivision 960‑D of the Income Tax Assessment Act 1997.