Taxation Administration Act 1953 – Provision of further time for lodgment of the 2013 Minerals Resource Rent Tax (MRRT) Return – Payers Instrument (No.1) 2012

Explanatory Statement

General Outline of Instrument

1. This instrument is made under paragraph 117-5(5)(a) of Schedule 1 to the Taxation Administration Act 1953 (TAA).
2. This instrument gives entities that are liable to pay a positive amount of MRRT further time to lodge their MRRT return for the 2013 MRRT year. They will be given until the first day of the ninth month following the end of the 2013 MRRT year to lodge their MRRT return.
3. The instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Date of effect

4.      This instrument is taken to have commenced on the day after registration.

What is this instrument about:

5.      The purpose of this instrument is to allow entities that are liable to pay a positive amount of MRRT further time to lodge their 2013 MRRT return by giving them until the first day of the ninth month following the end of the 2013 MRRT year to lodge that return.

What is the effect of this instrument:

6.      The effect of this instrument is that entities that are liable to pay a positive amount of MRRT for the 2013 MRRT year will have until the first day of the ninth month following the end of the 2013 MRRT year to lodge their MRRT return.

7.      However, this instrument does not have the effect of extending the date that assessed MRRT is due and payable. Assessed MRRT that an entity must pay under section 10-20 of the Minerals Resource Rent Tax Act 2012 for the 2013 MRRT year will still be due and payable under section 50-5 of that Act on the first day of the sixth month after the end of the MRRT year.

8.      Compliance cost impact: Low. An assessment of the compliance cost impact indicates that the impact will result in a low overall impact, comprising a low implementation impact and a low decrease in ongoing compliance costs.

Background:

9.      Paragraph 117-5(5)(a) of Schedule 1 to the TAA provides that the Commissioner may, by legislative instrument, determine a further period within which a class of entities may provide an MRRT return for an MRRT year.

10.  Industry members expressed the need for more time to familiarise themselves with MRRT and put measures in place to collect and consider the information required to prepare the MRRT return as well as the starting base return.

11.  This instrument will provide entities with further time to lodge their 2013 MRRT return in order to:

• provide more time for them to set up their new systems for MRRT
• allow more time to obtain valuations for starting base assets, which are an input into the MRRT return
• ease a resourcing issue for in‑house tax functions and practitioners by allowing them to spread lodgement timing for the first year away from the due dates for lodgement of their income tax returns and other statutory returns.

12.  It is good administrative practice that there should not be too long a period between the due date for payment and the lodgment of the MRRT return on which that payment is based. This is particularly so for entities that are liable to pay a positive amount of MRRT. This determination to allow entities a further period of three months to lodge their MRRT return has been made in recognition of sound administration and the factors affecting the circumstances of entities that are liable to pay a positive amount of MRRT. It is also for these reasons as to why a lesser amount of time is being provided than that being provided to entities.

Consultation:

13.  Consultation occurred with the National Tax Liaison Group Resource Rent Tax Sub-committee. The committee’s membership includes representatives of the major tax, law and accounting associations, representatives of resource industry associations and the ATO.

14.  Some additional consultation occurred in discussions with entities, tax professionals and at industry forums. Wider consultation was not considered necessary given the scope of this instrument, that is its application to entities who are members of the mining industry, its impact and that it is providing a concession provided for by the MRRT law.

Statement of compatibility with human rights

15.  This statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Taxation Administration Act 1953 - Provision of further time for lodgment of the 2013 Minerals Resource Rent Tax (MRRT) Return ‑ Payers Instrument (No.1) 2012

16.  This 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 this instrument

17.  This instrument gives entities that are liable to pay a positive amount of MRRT (relevant entities) an additional three months to lodge their MRRT return for the 2013 MRRT year.

18.  Relevant entities are being given further time to lodge their 2013 MRRT returns to allow them to set up their new systems for MRRT, obtain valuations for starting base assets and ease resourcing issues for in‑house tax functions and practitioners.

19.  Consultation has been undertaken in determining the further time to allow relevant entities to lodge their 2013 MRRT returns.

Human rights implications

20.  This instrument does not engage any of the applicable rights or freedoms.

Conclusion

21.  This instrument is compatible with human rights as it does not raise any human rights issues.

Legislative references:

Minerals Resource Rent Tax Act 2012

Taxation Administration Act 1953

Human Rights (Parliamentary Scrutiny) Act 2011

Legislative Instruments Act 2003