Mining Companies Urged To Take Advantage Of Australia's Investment Allowance

by Mary Swire, Tax-News.com, Hong Kong

05 January 2009

Deloitte, the tax and business advisory firm, is urging mining companies with major capital expenditure plans to take advantage of the 10% investment allowance, announced recently by the government in its report on national infrastructure.

The report highlighted measures to strengthen the Australian economy and is of particular relevance to mining companies which have major capital expenditure plans. The investment allowance could provide a significant tax saving for the resources sector, according to Deloitte.

Darren Lee, Deloitte Tax partner, said that this allowance represents an additional “once off” tax deduction equal to 10% of the cost of qualifying assets acquired and installed ready for use.

“Under the proposal, the investment allowance will be available for all new tangible depreciating assets costing over AUD10,000 (USD7,000) which are acquired between December 13, 2008 and June 30, 2009,” Lee said.

“These assets need to be installed and ready for use by June 2010 in order for the investment allowance to be claimed. For capital expenditure planned after June 30, 2009, consideration should be given to bringing forward such expenditure in order to qualify for the proposed investment allowance," Lee explained, adding:

“The deduction will only be available for a limited period, so it would be wise for mining companies to take advantage of this opportunity by June 30, 2009.”

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