ATO announces tax incentive deadline for exploration companies

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We all know that deaths and taxes are the two guarantees of life and while we would love to avoid both, it does help to soften the blow in taxing times when the Australian Tax Office sends a reminder to PESA that this will be the last year that exploration companies can take advantage of the Exploration Development Incentive.

In a media release to PESA News, the ATO announced that the final year of the Exploration Development Incentive is now open, bringing to a close the three-year scheme in which the ATO endeavoured to encourage shareholder investment in small exploration companies undertaking greenfields exploration in Australia.

Under the EDI, companies can distribute exploration credits to equity shareholders by converting a portion of their tax losses to create these credits.

The ATO said more than 80 companies participated in the first year of the EDI and more than 50 participated in year two.

‘The final year of the EDI is now open. If you wish to participate, you will need to notify the ATO by 30 September 2017 by completing an EDI Participation form. The exploration credit will be capped at $40million and will be shared between all eligible participants,’ the ATO said.

● For eligibility requirements and more information, visit the ATO’s FAQs and website at ato.gov.au/EDI.

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