resource exploration rebate

Resource Exploration Rebate

"In a huge boost for geothermal energy explorers, their exploration expenditure will also be eligible for the RER"

see Media release - Minister for Resources and Energy Martin Ferguson:

http://www.deewr.gov.au/Department/Documents/Files/FERGUSON%20MEDIA%20RELEASE%20(4).rtf

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New resource exploration rebate will boost investment

Exploration is vital to build a pipeline of resource projects for future generations. The Australian Government will introduce a new resource exploration rebate (RER), within the company income tax system, from 1 July 2011, delivering on its 2007 election commitment to promote resources exploration. The RER is estimated to cost $1.1 billion in the two years commencing 2012-13.

Under the RER companies can receive a refundable tax offset at the company tax rate for their exploration expenditure. The RER will apply to the same range of exploration expenses currently deductible under the tax law, provided the exploration is undertaken in Australia.

The RER is a simpler and more effective way to promote investment in exploration than a flow-through shares scheme. For a company in a tax loss position that spends $1 million on exploration, the RER will provide an immediate cash benefit of $300,000.

In a huge boost for geothermal energy explorers, their exploration expenditure will also be eligible for the RER.

The RER will significantly benefit small, pre-profit exploration companies. Small exploration companies currently do not get a tax benefit from their deductible exploration expenses until they become profitable. Compared to larger, more diversified companies, these smaller companies face a competitive disadvantage because losses they generate from exploration often cannot be used to offset other taxable income.
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