This proposal would introduce a new 40 per cent mining super profits tax on the super profits of individual Australian mining projects, where the super profits would be calculated at the project level as revenue less expenses.

• Project expenses would comprise of:
  • general project operating expenses
  • a deduction that recognises the book value of the project’s capital expenditure base just before the introduction of the super profits tax. The deduction would be equal to the project’s starting capital base depreciated on a straight-line basis over the first five years of the proposal. The starting capital base amount would be the book value of all capital expenditure as of 1 July 2021, uplifted each year at the 10-year government bond rate plus 2 per cent. The starting capital base amount would step down over the first five years of the proposal as the depreciation deduction amounts are subtracted.
• Project expenses would not be transferrable between projects owned by the same company.
• Royalty expenses and decommissioning costs would not be deductible against the super profits tax.

The mining super profits tax would be deductible for company tax purposes but not frankable for personal income tax.

The proposal would have effect from 1 July 2022.