The Federal government has recently released draft legislation in support of geothermal energy to provide similar tax concessions enjoyed by mining and petroleum explorers. Under the measures proposed to take effect from 1 July 2012:
1.The definition of exploration or prospecting will include exploration or prospecting for geothermal energy resources. This will allow an immediate tax deduction for exploration or prospecting for geothermal energy resources in an equivalent manner to mining and petroleum resources.
2.Allow an immediate tax deduction for the cost of tangible and intangible depreciating assets for assets acquired that are first used for exploration or prospecting for geothermal energy resources subject to certain criteria being met.
The intent of the legislation is to ensure that geothermal energy explorers will have the same tax concessions that are available to the mining and petroleum industry.
Should you require further assistance concerning the application of these measures please contact Murray Howlett of our Taxation Services Division on (07) 3023 1300.