Section DU 2 — Income Tax Act 2007: Mining exploration expenditure or mining development expenditure on acquisition of asset

DU 2 Mining exploration expenditure or mining development expenditure on acquisition of asset What this section does (1) This section applies when a mining company acquires an asset by incurring mining exploration expenditure or mining development expenditure. It describes the consideration that the mining company is treated as giving for the asset and the consideration that the person who disposes of the asset to the mining company is treated as receiving for it. Consideration in various cases (2) The consideration is,— (a) in a case other than a case described in any of subsections (3) to (6), the consideration that the company incurs for the acquisition of the asset: (b) in the case described in subsection (3), the consideration specified in the subsection for the acquisition of the asset: (c) in the case described in subsection (4), the consideration specified in the subsection for the acquisition of the asset: (d) in the case described in subsection (5), the consideration specified in subsection (6) for the acquisition of the asset. Consideration other than in cash (3) If some or all of the consideration for the acquisition is other than in cash, and the acquisition is not from an associated person, the consideration that is not in cash has the value agreed between the mining company and the person from whom the asset is acquired. If the mining company and the person do not agree, or if the Commissioner considers that the value agreed is unreasonable, the consideration that is not in cash has the value that the Commissioner decides. Acquisition from associated person (4) If the acquisition is from an associated person, the consideration for the acquisition is the market value that the asset has on the date of the acquisition. Amount specified by parties to acquisition (5) Subsection (6) applies when— (a) the mining company acquires the asset for use in carrying on their mining operations or associated mining operations; and (b) the mining company and the person from whom the asset is acquired give notice to the Commissioner that they have agreed to apply subsection (6); and (c) the notice is given to the Commissioner within 1 of the following times: (i) the time in which the mining company is required to file a return of income for the income year in which it acquires the asset; or (ii) a longer time allowed by the Commissioner; and (d) the notice specifies an amount that— (i) is no more than the market value that the asset has at the date of the acquisition; and (ii) is no less than the amount of any part of the consideration that is in cash. Amount specified in notice (6) The consideration for the acquisition is the amount that the mining company and the person specify in the notice. Defined in this Act: amount , associated mining operations , associated person , Commissioner , income year , mining company , mining development expenditure , mining exploration expenditure , mining operations , notice , return of income , Compare: 2004 No 35 s DU 2 Section DU 2(2)(a): amended (with effect on 1 April 2008), on 7 December 2009, by section 17(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).