- deferred tax accounting is required once the legislation is substantively enacted despite the legislation not being effective until 1 July 2012
- increase in the effective tax rate as the MRRT expense will be in addition to company tax expense
- deferred tax accounting is required for any differences between the tax and accounting treatment of in scope projects
- ability to utilise market value as the starting base may create a significant deferred tax asset with a resulting upfront recognition of an income tax benefit
- the deductibility of MRRT payments against company tax liabilities results in company deferred taxes being recognised on MRRT deferred taxes.
For organisations impacted by the proposed reforms, it should be a strategic priority to prepare a MRRT response plan outlining the key steps between now and the 1 July 2012 commencement date, and beyond, to ensure the organisation is fully prepared for the transition and likely impacts.
Drawing on the strength of our knowledge and experience from working with the existing PRRT and state royalty regimes, KPMG’s multidisciplinary team which can support companies getting ready to go live from an accounting perspective and help your organisation as it responds to the other complexities and challenges of this tax reform.
For further information please speak with your KPMG adviser listed in our publication Resource taxation in Australia: MRRT – is it an income tax and why does it matter?