
%0 Journal Article
%A Wade, Tim 
%T EXPLORATION SUSTAINING DEVELOPMENT&#x2014;TAXATION CONSIDERATIONS
%J The APPEA Journal
%D 1993/06/30
%V 33
%N 1
%P 423-430
%K 
%R https://doi.org/10.1071/AJ92034
%U https://www.publish.csiro.au/paper/AJ92034 
%X As we move towards the year 2000, an important consideration in the minds of the major players in Australia&apos;s petroleum industry will be the impact of Australia&apos;s taxation system. It is essential for the sustenance and encouragement of exploration for petroleum that the taxation system does not adversely impinge upon investment decisions.Over the recent past a number of issues have arisen which impact petroleum exploration and development. Briefly these are as follows:Income Tax Ruling IT 2642 provides the views of the Commissioner of Taxation in relation to the deductibility and classification of exploration expenditure. This has implications for the tax treatment of expenditure incurred in the petroleum industry.Provisions allow for the costs of environmental impact studies to be written off over the life of the project or 10 years, whichever is the lesser. These provisions will only apply where a taxpayer is not able to obtain a deduction under any other provision of the Act (there may be an overlap with the provisions governing petroleum exploration expenditure deductions). New provisions now also provide an outright deduction for expenditure incurred on or after 1 July 1991 in relation to rehabilitating a petroleum site and for expenditure incurred on or after 19 August 1992 on Environment Protection Expenditure.Recent amendments to the Research and Development ("R&D") provisions now make it clear that the R&D tax concession does not apply to petroleum prospecting or exploration expenditure. These amendments are retrospective from 1 July 1985.In addition to these developments, petroleum companies have been forced to contend with an enormous array of new taxes, new rules, new interpretations and new practices (including continuing Large Case Tax Audits). The stifling effect of these developments has inevitably resulted in large capital hungry companies pursuing offshore opportunities. 
