Introduction
Businesses will be eager to ensure that the costs of the carbon
pricing mechanism can be passed on to consumers.
This analysis looks specifically at the taxation aspects of the
carbon pricing mechanism (the Mechanism), and will
in particular cover:
- The income tax treatment that will apply to carbon
permits.
- The GST treatment of carbon permits.
- The tax concessions to be introduced with the carbon pricing
mechanism.
- Whether the costs of the Mechanism can be passed on.
Carbon: price or a tax?
In the first three years of the scheme, it will operate like a
tax, because businesses will be able to purchase as many carbon
permits as required to cover the amount of carbon pollution they
produce.The price will be fixed, commencing at AUD$23 per tonne of
carbon produced and rising annually in set increments.However, from
1 July 2015, there will be a limited number of permits available
for purchase and the price will then be market driven,
