This year's budget contained a number of announcements that will have a direct impact on the Energy & Natural Resources (ENR) industries. How these announcements impact an ENR business will depend on how and where the business operates.
KPMG provides an analysis of the key implications of the 2014 Federal Budget across the ENR industries.
- The Government confirmed its repeal of the Minerals Resource Rent Tax (MRRT) and Carbon Price Mechanism – consider the financial reporting impacts on deferred tax balances.
- The federal Petroleum Resource Rent Tax (PRRT) remains for offshore and onshore petroleum projects.
- Junior Australian exploration companies should consider the Exploration Development Incentive (EDI) which will provide a refundable tax offset for greenfields exploration costs from 1 July 2014 – capped at $100 million.
- The proposed reduction to the company tax rate from 30 percent to 28.5 percent will apply from 1 July 2015. This will be offset by the proposed parental leave levy of 1.5 percent for companies with more than $5 million taxable income – consider the impact on future franking credits.