Australia might allow immediate tax write offs for geothermal exploration assets
Exploration and test drilling in Tasmania, Australia (source: KUTh Energy)
Alexander Richter
15 Jun 2012
Australia sees draft legislation that would allow immediate tax write offs and deducations for geothermal exploration under certain conditions, but limited to "exploration or prospecting" work and e.g. not including actual "development" drilling.
In new draft legislation in Australia, it is proposed that geothermal explorers will be able to “access immediate tax write offs and deducations for exploration expenses in certain circumstances.”
If agreed upon, the new rules would apply to plants coming online after Jul 1, 2012. Geothermal exploration firms would be able to claim immediate tax deductions and depreciation on certain assets similar to those available to mining and other exploration firms.
Key points mentioned by an Australian law firm, highlight that exploration information would also be included as depreciating asset and is deducatable.
The loophole seems to be on “exploration”, so only equipment used for exploration and not development is deductable and there will be fine line determination what constitutes development, e.g. for drilling.
For a detailed overview of Hop Good Ganim law firm, see link below.
Source: Hop Good Gamin
