Section CU 2 — Income Tax Act 2007: Mining company that processes or manufactures

CU 2 Mining company that processes or manufactures When this section applies (1) This section applies when— (a) a mining company— (i) obtains specified minerals from its mining operations; or (ii) through a combination of its mining operations and its associated mining operations, brings specified minerals to the stage at which they are ready to be processed or used in a manufacturing operation; and (b) the company produces products by processing the specified minerals or using them in a manufacturing operation; and (c) the company disposes of the products. Income classified (2) For the income year in which the mining company disposes of the products, the Commissioner must classify the mining company’s income from the disposal as income from mining or income other than income from mining. The Commissioner must classify the income by apportioning it under subsection (3) or by making a decision under subsection (4). Apportionment (3) In apportioning the income, the Commissioner must make an appropriate apportionment of the value of the stock of products on hand at the start and end of the income year and must take into account the matters the Commissioner considers relevant and appropriate, including— (a) the capital employed, or the expenditure or losses incurred, in the mining operations, associated mining operations, and processing of the specified minerals or the use of the specified minerals in a manufacturing operation: (b) the extent of the steps involved in the mining operations, associated mining operations, and processing of the specified minerals or the use of the specified minerals in a manufacturing operation. Decision (4) In making a decision, the Commissioner must take into account the amount that would have been— (a) the value received or receivable for the specified minerals if they had been disposed of in the income year to a wholly independent person in the state in which they resulted from the mining operations or the combination of mining operations and associated mining operations; and (b) the value of the products on hand at the end of the income year if the specified minerals from which they came had been valued for the purposes of subpart EB (Valuation of trading stock (including dealer’s livestock)) in the state in which they resulted from the mining operations or the combination of mining operations and associated mining operations. Defined in this Act: amount , associated mining operations , Commissioner , income , income from mining , income year , mining company , mining operations , specified mineral , Compare: 2004 No 35 s CU 2