Canberra Friday, 2 July 2010: As leaked to the media overnight, the Government has reached an agreement with the mining sector over the Super Profits Tax.

The revised reforms will apply from 1 July 2012 and include.

a new Minerals Resource Rent Tax (MRRT) regime applying to iron ore and coal in Australia; and
extending the current Petroleum Resource Rent Tax (PRRT) regime to all Australian onshore and offshore oil and gas projects, including the North West Shelf.

The MRRT will apply at 30% instead of the 40% originally contemplated.

The resources tax has also been limited in scope to iron ore, coal, oil and gas.

However, of interest to many is the impact the reduced profits tax will have on other reforms. When the Government fist announced the Super Profits Tax in its response to the Henry Review on 2 May, it signalled that the tax would fund a raft of tax changes. The only non-mining related tax change that appears to have been affected is the planned reduction in the company tax rate.

Originally, the Government intended a:
Phased reduction in the company tax rate to 28% in 2014/2015 (1 July 2013), and
Reduction in the company tax rate to 28% for small business from 2012/2013 (1 July 2012)

Now, the company tax rate will reduce to 29% from 2013/2014 but will not be further reduced. Small business will be able to access the reduction a year earlier in 2012/2013.

The other tax changes appear unaffected, including:

Small business depreciation
Instant asset write off and simplified depreciation – expands the capital allowance concessions available for small business entities (1 July 2012)

Superannuation guarantee
Incremental increases to super guarantee each financial year to reach 12% by 2019/2020 (1 July 2013)
Superannuation guarantee age limit increased to 75 (1 July 2013)

Superannuation concessional contributions caps
A higher ‘catch up’ contribution cap of $50,000 for those 50 and over with super balances less than $500k (1 July 2012)

Superannuation – low income earners
A superannuation contribution from the government of up to $500 pa for those on adjusted taxable incomes up to $37k
Contributions made from 1 July 2012 (paid in 2013/2014)


More information
Breakthrough agreement with industry on improvements to resources taxation

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