The Critical Minerals Production Tax Incentive: Expanded Eligibility For Particular Processing Activities

The Future Made in Australia (Production Tax Credits and Other Measures) Act 2025 (Act), which received Royal Assent shortly before this year's Federal election was announced, established the critical minerals production tax incentive (CMPTI). The CMPTI provides a 10% tax offset on eligible Australian processing expenditure for critical minerals processed and refined from 1 July 2027 to 30 June 2040.

At the time of its passage through Parliament, concerns were raised about various aspects of the CMPTI (and the hydrogen production tax incentive that was also established by the Act). While many of those concerns remain to be addressed, Treasury has issued an exposure draft of the Income Tax Assessment (1997 Act) Amendment (Critical Minerals) Regulations 2025 (Regulations). The Regulations prescribe certain critical minerals processing activities that are intended to be eligible for the CMPTI but would not otherwise meet the general test set out in the Act.