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Tax implications of financial assurance in Queensland

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Published on 01 Jun 19 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

Although financial assurance obligations are a common feature of the mining and resources industries, the taxation implications associated with providing financial assurance are complex and unclear. Effective from 1 April 2019, the Mineral and Energy Resources (Financial Provisioning) Act 2018 (Qld) significantly reformed Queensland’s financial assurance framework for resource activities by introducing a financial provisioning scheme involving the creation of a pooled scheme fund. In light of the recent changes, this article considers the taxation treatment of the various mechanisms of providing financial assurance under the Queensland framework, including by way of contribution amounts and surety in the form of cash, bank guarantees and insurance bonds. Additionally, this article also examines taxation issues relevant to financial assurance obligations more generally in a mergers and acquisitions context.

Author profile

Elizabeth Colbran
Elizabeth is a manager at Deloitte in the Business Tax Services team. Elizabeth is also a solicitor of the Supreme Court of Queensland and the High Court of Australia. - Current at 08 July 2019
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