Exploration Development Incentive legislation passes Federal Parliament

In good news for small exploration companies, legislation implementing the Exploration Development Incentive (Incentive) passed the Federal Parliament on 3 March 2015 and is currently awaiting royal assent.

The Incentive allows eligible exploration companies to convert tax losses to 'exploration credits' which are then distributed to shareholders who may claim a tax deduction. We discussed the way the Incentive operates in detail in our previous Alert.

To recap the key points:

1. An exploration company must have no taxable income for the relevant year to be eligible to apply for the Incentive;
2. Expenditure must be incurred from 1 July 2014 in Australia on 'greenfields' exploration for minerals to be eligible for the Incentive;