Income Tax Assessment Amendment (Junior Minerals Exploration Incentive) Regulations 2023

Administered by Department of the Treasury

Legislation au F2023L00087 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by authority of the Treasurer

Income Tax Assessment Act 1997

Income Tax Assessment Amendment (Junior Minerals Exploration Incentive) Regulations 2023

Subsection 909-1(1) of the Income Tax Assessment Act 1997 (the Act) provides that the Governor-General may make regulations for the purposes necessary or convenient to prescribe for carrying out or giving effect to the Act.

Paragraph 418-103(1)(g) of the Act provides for certain exploration credits to be allocated to small minerals exploration companies (‘junior explorers’) each income year, and for the amount unused in previous income years to be available for allocation in subsequent income years.

The purpose of these regulations is to prescribe the amount of tax credits that were allocated to junior explorers in income year 2021-22, but are unused and can be made available for allocation in the income year 2023-24. This aims to maximise the utilisation of exploration credits under the Junior Minerals Exploration Incentive.  

The Junior Minerals Exploration Incentive provides an incentive for investment in junior explorers undertaking greenfields minerals exploration in Australia. The amount of exploration credits available under the Junior Minerals Exploration Incentive each income year is capped.

To be allocated exploration credits, junior explorers apply to the Commissioner of Taxation. Exploration credits are allocated on a first-come first-served basis. The application period opens in June each year ahead of the subsequent income year. In allocating exploration credits in an income year, the Commissioner cannot exceed the annual exploration cap specified in the Act for that year.

Once the junior explorers have been notified by the Commissioner that they have received an allocation of exploration credits, they will then seek to raise capital on market to fund exploration activities.

Where the junior explorers are not able to raise capital from investors or spend the capital they raised on eligible exploration expenditure, they are not able to utilise their allocation of exploration credits.

The Regulations provide that an additional $2,150,000 is added to the annual exploration cap for the 2023-24 income year. This amount is equal to the total of the exploration credits allocated by the Commissioner but which were unused by junior explorers in the 2021-22 income year.

This measure represents a small administrative change and as such no public consultation was undertaken.

Details of the Regulations are set out in Attachment A.

The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.

Regulation Impact Statement

The Office of Impact Analysis assessed a Regulation Impact Statement as unnecessary as the Regulations are machinery in nature. (OBPR Reference 22‑03845). This means a Regulation Impact Statement is not required.

A Statement of Compatibility with Human Rights is at Attachment B.

ATTACHMENT A

Details of the Income Tax Assessment Amendment (Junior Minerals Exploration Incentive) Regulations 2023

Section 1 – Name of the Regulations

This section provides that the name of the Regulations is the Income Tax Assessment Amendment (Junior Minerals Exploration Incentive) Regulations 2023 (the Regulations).

Section 2 – Commencement

Schedule 1 to the Regulations commences the day after the instrument is registered on the Federal Register of Legislation.

Section 3 – Authority

The Regulations are made under the Income Tax Assessment Act 1997 (the Act).

Section 4 – Schedule

This section provides that each instrument that is specified in the Schedule to this instrument will be amended or repealed as set out in the applicable items in the Schedule, and any other item in the Schedule to this instrument has effect according to its terms.

Schedule 1 – Amendments

Income Tax Assessment (1997 Act) Regulations 2021

Clause 1 of Schedule 1

An additional $2,150,000 is added to the annual exploration cap for the 2023-24 income year, pursuant to paragraph 418‑103(1)(g) of the Act.


ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Income Tax Assessment Amendment (Junior Minerals Exploration Incentive) Regulations 2023

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Regulations provide that an additional $2,150,000 is added to the annual exploration cap for the 2023-24 income year. This amount is equal to the total of the exploration credits allocated by the Commissioner but which were unused by junior explorers in the 2021-22 income year.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 

Overview

The Income Tax Assessment Amendment (Junior Minerals Exploration Incentive) Regulations 2023 were enacted to address a gap in the allocation of unused exploration credits to junior minerals exploration companies. This legislative instrument was introduced by the Parliament of Australia, under the authority of the Income Tax Assessment Act 1997, to ensure the efficient use of allocated tax credits within the specified cap. The policy objective of these regulations is to maximise the utilisation of exploration credits under the Junior Minerals Exploration Incentive, which provides an incentive for investment in junior explorers undertaking greenfields minerals exploration in Australia. The regulations adjust the annual exploration cap to include unused credits from the 2021-22 income year, enabling their allocation in the 2023-24 income year. This adjustment aims to encourage continued investment and exploration activities within the sector by allowing companies to utilise credits that would otherwise remain unused.

Scope and Application

The Income Tax Assessment Amendment (Junior Minerals Exploration Incentive) Regulations 2023 applies to small minerals exploration companies, referred to as 'junior explorers', in the context of the Income Tax Assessment Act 1997. These regulations pertain specifically to the allocation of unused exploration credits from the 2021-22 income year, making them available for the 2023-24 income year. The objective is to enhance the utilisation of exploration credits under the Junior Minerals Exploration Incentive, which encourages investment in greenfields minerals exploration in Australia. The regulations extend their application to the national level within Australia, given the Commonwealth jurisdiction of the Income Tax Assessment Act 1997. The regulations do not include specific exclusions, exemptions, or thresholds beyond the cap specified in the Act. They also allow for further extension or restriction of application through subordinate instruments. This legislative measure seeks to ensure that the unused exploration credits are efficiently utilised to support the junior explorers' activities.

Key Provisions

The Income Tax Assessment Amendment (Junior Minerals Exploration Incentive) Regulations 2023 introduces modifications to the existing framework for the allocation of exploration credits to small minerals exploration companies, often referred to as "junior explorers." The primary operative section (Schedule 1, Clause 1) provides that an additional $2,150,000 is added to the annual exploration cap for the 2023-24 income year. This addition is intended to account for the unused exploration credits from the 2021-22 income year, ensuring that these credits can be utilized in the subsequent year. This measure aims to maximize the incentive for investment in greenfields minerals exploration within Australia, as stipulated under the Junior Minerals Exploration Incentive provisions in the Income Tax Assessment Act 1997. The regulations impose specific obligations on junior explorers and the Commissioner of Taxation. Junior explorers must apply to the Commissioner for the allocation of exploration credits and can only be allocated credits based on a first-come, first-served basis during the application period that opens in June each year. The Commissioner, on the other hand, is required to allocate credits within the specified annual exploration cap and ensure that credits are not allocated beyond this limit. Furthermore, junior explorers must use the allocated credits to raise capital or incur eligible exploration expenditure; otherwise, the credits may not be utilized. Failure to comply with the provisions of these regulations can lead to various consequences. Although the specific offences and penalties are not detailed in the provided text, breaches of tax regulations generally can result in both civil and criminal penalties under the Income Tax Assessment Act 1997. Civil penalties may include financial penalties or interest charges on unpaid taxes, while criminal penalties can include fines and, in severe cases, imprisonment. The exact penalties would depend on the nature and extent of the breach, as well as any applicable defences or mitigating circumstances.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.