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DU 3: Acquisition of land for mining operations
or “Deduction rules for mineral miners buying land for mining operations”
You could also call this:

“Rules for claiming expenses when buying mining-related assets”

If you buy something related to mineral mining before you get a mining permit for the area where you’ll use it, you can get some money back for what you spent on it. This is called a deduction.

If you buy something related to mineral mining after you get a mining permit for the area where you’ll use it, the money you spent is treated as mining development expenditure.

When we talk about the money you spent, we don’t include the cost of applying for a mining right or mining permit.

These rules override the usual limits on getting money back for things you buy for your business. However, you still need to follow the general rules about what you can claim money back for.

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Next up: DU 5: Farm-out arrangements

or “Tax rules for mining expenses in farm-out deals”
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Part D Deductions
Mineral mining expenditure

DU 4Acquisition of mineral mining assets

  1. If a person acquires a mineral mining asset before the date on which a mining permit for the permit area to which the asset relates is obtained, they are allowed a deduction for expenditure incurred in acquiring the asset.

  2. If a person acquires a mineral mining asset after the date on which a mining permit for the permit area to which the asset relates is obtained, the expenditure incurred in acquiring the asset is treated as mining development expenditure.

  3. For the purposes of this section, expenditure incurred does not include the cost of an application for a mining right or mining permit.

  4. This section overrides the capital limitation. The general permission must still be satisfied and the other general limitations still apply.

Notes
  • Section DU 4: replaced, on (applying for the 2014–15 and later income years), by section 41(1) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).