Many believe the new RSPT tax replaces the 30% company tax on profits with a 40% rate and only applies to big companies. This is wrong.
The 30% company tax remains. The new RSPT tax applies to all resource companies and is an extra 40% tax that is applied to the revenue generated from petroleum, uranium, black coal, iron ore, base metals, diamonds and minerals sands that are mined in Australia.
The RSPT tax is taken before profits are calculated. Its calculated by taking the assessable revenue (from the above minerals) minus any deductible expenditure.
Deductible expenses for RSPT purposes will be exploration expenditure, plus the cost of extracting resources and getting them to the taxing point. NOT deductible will be interest and all financing costs, payments to buy permits, leases and licences, payments for projects subject to RSPT, income tax and GST.
It means when we mine something now and sell a boatload to China, Rudd takes 40% of the payment and leaves the rest for the company to cover most of its costs and declare any leftover bit as taxable income at 30%.
