Consultation meeting with Treasury - Clean Energy draft taxation amendments

On 19 August 2011, the Institute met with Treasury, the ATO and the Department of Climate Change and Energy Efficiency to discuss the income tax, GST and stamp duty treatment of emissions units and associated matters under the Clean Energy draft legislation package.

Key issues raised by the Institute’s representatives in the consultation meeting included:

General

• Inconsistent use of terms and scope of provisions, e.g. ‘registered emissions units’ for income tax v. ‘eligible emissions units’ for GST. Also ‘liable entity’ and ‘person’

Income tax issues

• Income taxation of free permits
• Tax accounting for registered emissions units
• Choice of valuation method – changes
• Timing of surrender of permits
• Surrender for a purpose other than gaining assessable income
• Scope of taxation rules limited to registered emissions units
• Bringing emissions units into and out of the system
• International tax interactions
• Abatement and excluded expenses
• Division 57

GST issues

• Scope of GST-free treatment of core trades
• Nature of emissions units – ‘personal property’ right
• Put or call options for GST-free eligible emission units
• Denial of input tax credits for taxable enterprises
• Registration of non-residents
• Penalties and charges – Division 81

Stamp duty issues

• Emissions units other than ‘carbon units’ – ‘personal property’ or an ‘interest in land’?
• Status of undertaking by States and Territories re specific stamp duty exemption

Treasury confirmed that they will consider the above issues in the course of finalising the Clean Energy Bills, which are due to be introduced into Parliament in September 2011.

The Institute is preparing a formal submission to the Department of Climate Change and Energy Efficiency (with copy to Treasury) in relation to the above matters, which we expect to lodge on 23 August 2011.

Article last updated 28 September 2011