Section DU 7 — Income Tax Act 2007: Limit on deduction

DU 7 Limit on deduction Limit (1) When a mining company has a mining outgoing excess, there is a limit on the deduction that it is allowed in the income year for the amount taken into account in the mining expenditure item of the formula in subsection (5). Amount of deduction (2) The limit is the lesser of— (a) two-thirds of the mining outgoing excess; and (b) the greater of zero and the amount calculated using the formula— non-mining income − non-mining expenditure. Definition of items in formula (3) In the formula in subsection (2),— (a) non-mining income is the income other than income from mining of the mining company allocated to the income year: (b) non-mining expenditure is all the expenditure or loss that the mining company incurs in the income year relating to deriving non-mining income and for which it is allowed a deduction that is allocated to the income year. Meaning of mining outgoing excess (4) Mining outgoing excess means the greater of zero and the amount that a mining company calculates for an income year using the formula— mining expenditure − income from mining. Definition of items in formula (5) In the formula in subsection (4),— (a) mining expenditure is an amount consisting of— (i) all the expenditure or loss that the mining company incurs in the income year relating to deriving income from mining and for which it would be allowed a deduction that would be allocated to the income year; and (ii) any part of an amount described in section DU 4(4) : (b) income from mining is the income from mining of the mining company allocated to the income year. Defined in this Act: amount , deduction , income , income from mining , income year , mining company , mining outgoing excess , Compare: 2004 No 35 s DU 7