35EStarting base expenditure

#### 35E Starting base expenditure (1) For the purposes of this Act, a reference to the starting base expenditure incurred by a person in a financial year in relation to a petroleum project (not being a combined project) is a reference to: (a) in relation to the starting base financial year for the project—the person’s starting base amount in relation to the interest; or (b) in relation to any subsequent financial year—any amount that is taken by subsection (3) or Division 5 to be starting base expenditure incurred by the person in relation to the project in the financial year. (1A) However, if: (a) the petroleum project is the North West Shelf project; and (b) in the starting base financial year for the project or in a later financial year, a production licence relating to the project comes into existence; and (c) the production licence is derived from an exploration permit, or a retention lease, that existed at the start of 1 July 2012; subsection (1) has effect as if the starting base expenditure incurred by the person in that financial year in relation to the project includes an amount equal to the person’s starting base expenditure in that financial year in relation to the petroleum project that would, but for subsection 19(1B), relate to that production licence. (1B) For the purposes of this Act, starting base expenditure incurred by a person in the starting base financial year is taken to be incurred on the first day of the starting base financial year. (2) For the purposes of this Act, a reference to the starting base expenditure incurred by a person in a financial year in relation to a combined project is a reference to: (a) any amount that is taken by subsection (3) or Division 5 to be starting base expenditure incurred by the person in relation to the project in the financial year; or (b) if the project combination certificate in relation to the project came into force in the financial year: (i) any amount of starting base expenditure; or (ii) any amount that is taken by subsection (3) or Division 5 to be starting base expenditure; incurred by the person in relation to the pre‑combination projects in relation to the project in the financial year. (3) For the purposes of subsection (1) or (2), if the sum of: (a) the class 1 augmented bond rate general expenditure; and (b) the class 1 augmented bond rate exploration expenditure; and (c) the class 2 uplifted general expenditure; and (d) the class 1 GDP factor expenditure; and (e) the class 2 uplifted exploration expenditure; and (f) the class 2 GDP factor expenditure; and (g) the resource tax expenditure; and (i) the starting base expenditure; incurred by a person in a financial year (the assessable year) in relation to the petroleum project exceeds the assessable receipts derived by the person in the assessable year in relation to the project, the person is taken to incur, in relation to the project and on the first day of the next financial year, an amount of starting base expenditure worked out in accordance with the formula:  where: > augmented bond rate means the long term bond rate in relation to the assessable year plus 1.05. > available excess means so much of the excess as does not exceed the starting base expenditure incurred in the assessable year. (4) References in paragraph (1)(a) and subsections (1A) and (1B) to the starting base financial year for a petroleum project are references to the earliest financial year, after 30 June 2012, in which a production licence relating to the project is in existence.