Andrew McLachlan (SA, Deputy-President) Share this | Hansard source

The question now is that Senator Van's amendments on sheet 3256, circulated earlier, be agreed to.

Senator Van's circulated amendments—

(1) Clause 2, page 3 (after table item 4), insert:

(2) Schedule 1, item 4, page 24 (line 27), after "section 421-40" insert "and 421A-25".

(3) Page 67 (after line 3), after Schedule 2, insert:

Schedule 2A — Low carbon liquid fuel production tax incentive

Part 1 — Main amendments

Income Tax Assessment Act 1997

1 Section 13-1 (after table item headed "losses")

Insert:

2 Section 67-23 (after table item 27)

Insert:

3 Before Division 420

Insert:

Division 421A — Low carbon liquid fuel production tax incentive

Table of Subdivisions

Guide to Division 421A

421A-A Tax offset for low carbon liquid fuel produced in Australia

421A-B Certification of production profiles

421A-C Other matters

421A-1 What this Division is about

A company may be entitled to a refundable tax offset in respect of low carbon liquid fuel produced in Australia between the start of 1 July 2027 and the end of 30 June 2040.

One requirement for entitlement to the offset is that the company must have created a certificate (called a PGO certificate) that relates to the low carbon liquid fuel. The certificate is created under the Future Made in Australia (Guarantee of Origin) Act 2024 and it must be registered under that Act.

The following types of low carbon liquid fuel are eligible:

The amount of the tax offset is $1 per whole litre of low carbon liquid fuel for renewable diesel and $2 per whole litre of low carbon liquid fuel for other kinds of low carbon liquid fuel (though this may be reduced in certain circumstances).

Subdivision 421A-A — Tax offset for low carbon liquid fuel produced in Australia

Table of sections

421A-5 Company entitled to refundable tax offset for low carbon liquid fuel produced in Australia

421A-10 Amount of low carbon liquid fuel production tax offset

421A-15 Initial reconciliation period for registered PGO certificate

421A-20 Correction notice for registered PGO certificate

421A-25 LCLFPTO community benefit rules

421A-5 Company entitled to refundable tax offset for low carbon liquid fuel produced in Australia

(1) A company is entitled to a *tax offset under this section (the low carbon liquid fuel production tax offset) for an income year in respect of a litre of low carbon liquid fuel produced in Australia during the income year if:

(a) the income year:

(i) starts on or after 1 July 2027; and

(ii) ends before 1 July 2040; and

(b) there is a *registered PGO certificate that relates to the litre of low carbon liquid fuel and which states:

(i) that the litre of low carbon liquid fuel was produced at a particular facility that is specified in a *production profile, in accordance with a particular *production pathway that is specified in that production profile; and

(ii) that the greenhouse gases emitted in relation to the litre of low carbon liquid fuel calculated after undertaking an emissions lifecycle analysis is less than or equal to the amount determined by the Clean Energy Regulator under subsection (4); and

(c) at the time when the litre of low carbon liquid fuel was produced, the production profile mentioned in subparagraph (b)(i) of this subsection was certified in relation to the facility and the production pathway under Subdivision 421A-B; and

(d) the *initial reconciliation period for the PGO certificate has ended (see section 421A-15); and

(e) no *correction notice for the PGO certificate is in force (see section 421A-20); and

(f) the company satisfies the requirements in subsection (2) of this section.

Note 1: For paragraph (c), when a production profile is certified, or a certification of a production profile is revoked, under Subdivision 421A-B, the certification or revocation may have retrospective effect.

Note 2: The low carbon liquid fuel production tax offset is a refundable tax offset (see section 67-23).

(2) The company satisfies the requirements in this subsection if:

(a) the company is a *constitutional corporation; and

(b) the company was the person who created the *registered PGO certificate under the Future Made in Australia (Guarantee of Origin) Act 2024; and

(c) the company created the PGO certificate in the course of carrying on an enterprise in the indirect tax zone; and

(d) at each time when the company carries on that enterprise in the indirect tax zone during the income year, either:

(i) the company is an Australian resident and has an *ABN; or

(ii) the company is a foreign resident and has a *permanent establishment in Australia and an ABN; and

(e) the company is not an *exempt entity; and

(f) if *LCLFPTO community benefit rules under paragraph 421A-15(1)(a) of this Act apply to the company for the income year—the company meets the conditions specified in those rules.

(3) In subsection (2), carried on in the indirect tax zone and indirect tax zone have the same meaning as in the *GST Act.

(4) The Clean Energy Regulator must, by legislative instrument, determine an amount for the purposes of subparagraph 421A-5(1)(b)(ii).

421A-10 Amount of low carbon liquid fuel production tax offset

(1) If a company is entitled to the *low carbon liquid fuel production tax offset for an income year in respect of one or more litres of low carbon liquid fuel, the amount of the offset for the income year is:

(a) for low carbon liquid fuel that is renewable diesel—$1 in respect of each whole litre of low carbon liquid fuel; or

(b) for sustainable aviation fuel—$2 in respect of each whole litre of low carbon liquid fuel; or

(c) for other kinds of low carbon liquid fuel—$2 in respect of each whole litre of low carbon liquid fuel.

(2) However, if:

(a) LCLFPTO community benefit rules under paragraph 421A-15(1)(b) apply to the company for the income year; and

(b) circumstances specified in those rules exist for the company;

then the amount of the *low carbon liquid fuel production tax offset is reduced by the proportion specified in those rules for those circumstances.

421A-15 Initial reconciliation period for registered PGO certificate

(1) The initial reconciliation period for a *registered PGO certificate is the period that:

(a) starts immediately after the end of the financial year (the registration year for the certificate) in which the certificate was registered; and

(b) ends at the time specified by subsection (2) or (3), whichever is later.

(2) If:

(a) a person is given a statement under section 60 of the Future Made in Australia (Guarantee of Origin Act) 2024; and

(b) the statement relates to PGO certificate activity (within the meaning of that Act) in connection with the *registered PGO certificate in the registration year for the certificate;

then the time specified by this subsection is the latest time by which such person is required, under section 61 of that Act, to give the Clean Energy Regulator a declaration in relation to such a statement.

Note: If more than one person is given such a statement, different people may be required to give the Clean Energy Regulator declarations by different times. The time specified by this subsection is the latest of those times.

(3) If:

(a) a person is given a statement under section 60 of the Future Made in Australia (Guarantee of Origin Act) 2024 (the Guarantee of Origin Act); and

(b) the statement relates to PGO certificate activity (within the meaning of the Guarantee of Origin Act) in connection with the *registered PGO certificate in the registration year for the certificate; and

(c) after the end of the registration year, and at or before the time specified by subsection (2) of this section, the person gives the Clean Energy Regulator declarations and information of the kind mentioned in paragraph 61(b) of the Guarantee of Origin Act; and

(d) the declarations include a declaration that particular information stated in the registered PGO certificate is not accurate or complete;

then the time specified by this subsection is the latest time at which the Clean Energy Regulator may decide, under section 62 of the Guarantee of the Origin Act, to correct the registered PGO certificate in response to declarations and information given by a person as mentioned in paragraphs (c) and (d) of this subsection.

Note: If more than one person gives the Clean Energy Regulator declarations and information as mentioned in paragraphs (c) and (d) of this subsection then, for each such set of declarations and information, there will be a last time at which the Clean Energy Regulator may correct the PGO certificate in response to that set of declarations and information. The time specified by this subsection is the latest of those last times.

421A-20 Correction notice for registered PGO certificate

(1) The Clean Energy Regulator must issue a notice (a correction notice) for a *registered PGO certificate that relates to a litre of low carbon liquid fuel if:

(a) the *initial reconciliation period for the PGO certificate has ended;and

(b) the PGO certificate states that the greenhouse gases emitted in relation to the litre of low carbon liquid fuel calculated after undertaking an emissions lifecycle analysis is less than or equal to the amount determined by the Clean Energy Regulator under subsection 421A-5(4); and

(c) the Clean Energy Regulator is satisfied that the condition in paragraph (b) is not met.

(2) The *correction notice must state that the Clean Energy Regulator is satisfied that the condition in paragraph (1) is not met.

(3) The *correction notice is in force until it is revoked under subsection (4).

Revocation of correction notice

(4) The Clean Energy Regulator may, in writing, revoke a *correction notice for a *registered PGO certificate that relates to a litre of low carbon liquid fuel if the Clean Energy Regulator is satisfied that:

(a) the *initial reconciliation period for the PGO certificate had not ended at the time when the correction notice was issued, and that period has still not ended; or

(b) the PGO certificate does not state that the condition in paragraph (1)(b) is met in relation to the litre of low carbon liquid fuel; or

(c) the condition in paragraph (1)(b) is met in relation to the litre of low carbon liquid fuel.

Copies of correction notice and revocation

(5) If the Clean Energy Regulator:

(a) issues a *correction notice under subsection (1) for a *registered PGO certificate that relates to a litre of low carbon liquid fuel; or

(b) revokes such a correction notice under subsection (4);

then the Clean Energy Regulator must give copies of the correction notice or the revocation to the following:

(c) each person who is, at the time the correction notice is issued or revoked, the *holder of a *registered production profile that specifies the facility at which the low carbon liquid fuel was produced;

(d) the Commissioner.

Other matters

(6) Subsection (1) and paragraph (4)(c) do not impose a duty on the Clean Energy Regulator to:

(a) seek information about whether the conditions in subparagraphs (1)(b)(i) and (ii) are met; or

(b) consider whether the Clean Energy Regulator is satisfied that those conditions are, or are not, met.

(7) The issuing of a *correction notice for a *registered PGO certificate does not have any effect on the content or status of the PGO certificate under the Future Made in Australia (Guarantee of Origin Act) 2024.

421A-25 LCLFPTO community benefit rules

(1) The Minister may, by legislative instrument, make the following rules (the LCLFPTOcommunity benefit rules):

(a) rules that:

(i) apply to companies within a specified class for an income year; and

(ii) specify conditions that must be met for such a company to be entitled to a *low carbon liquid fuel production tax offset for the income year;

(b) rules that:

(i) apply to companies within a specified class for an income year; and

(ii) specify circumstances that, if they exist for such a company, will reduce the amount of the company's low carbon liquid fuel production tax offset for the income year by a specified proportion.

Note: For subparagraph (b)(ii), different proportions may be specified for different circumstances (see subsection 33(3A) of the Acts Interpretation Act 1901).

(2) In making the *LCLFPTO community benefit rules, the Minister must have regard to the community benefit principles (within the meaning of subsection 10(3) of the Future Made in Australia Act 2024).

(3) When having regard to those principles, the Minister is to treat the *low carbon liquid fuel production tax offset as if it were Future Made in Australia support (within the meaning of the Future Made in Australia Act 2024).

(4) This section does not apply if the Future Made in Australia Act 2024 has not commenced.

Subdivision 421A-B — Certification of production profiles

Table of sections

421A-30 Application for certification

421A-35 Certification of production profile

421A-40 Revocation of certification

421A-45 Requests for further information etc.

421A-30 Application for certification

(1) The *holder of a *registered production profile for low carbon liquid fuel may apply to the Clean Energy Regulator for the profile to be certified:

(a) in relation to a particular facility, and a particular *production pathway, specified in the profile; and

(b) from a particular time.

(2) The time specified in the application, as mentioned in paragraph (1)(b), must not be later than the start of the day when the application is made (and may be any time before the start of that day).

(3) The application is taken not to be made unless:

(a) it is in a form (if any) prescribed under subsection (5); and

(b) it is accompanied by any information, documents or other materials prescribed under subsection (5); and

(c) without limiting paragraphs (a) and (b) of this subsection—it is accompanied by an eligibility statement for the *registered production profile that relates to the facility and the *production pathway.

(4) For the purposes of paragraph (3)(c), an eligibility statement for the *registered production profile that relates to the facility and the *production pathway is a statement by the *holder of the profile to the effect that there are reasonable grounds to believe that, if the profile is certified, a company will be entitled to the *low carbon liquid fuel production tax offset for an income year in respect of one or more litres of low carbon liquid fuel produced at the facility in accordance with the production pathway.

(5) The Clean Energy Regulator may, by notifiable instrument, do any of the following:

(a) prescribe a form for the purposes of paragraph (3)(a);

(b) prescribe information, documents or other materials for the purposes of paragraph (3)(b).

421A-35 Certification of production profile

Certification

(1) If:

(a) the Clean Energy Regulator receives an application for a *registered production profile to be certified in relation to a facility and a *production pathway from a particular time (the start time); and

(b) the Clean Energy Regulator is satisfied that a condition prescribed under subsection (3) (if any) was met at the start time, and has continued to be met since that time.

then:

(c) Clean Energy Regulator must, in writing, certify the registered production profile in relation to the facility and the production pathway; and

(d) the instrument of certification must state that the certification has effect from the start time.

Exception failure to provide information etc.

(2) However, the Clean Energy Regulator may refuse to certify a *registered production profile under subsection (1) if:

(a) the Clean Energy Regulator has given the *holder of the production profile a notice under section 421A-45(1) that relates to the application for certification, requesting that the holder give the Clean Energy Regulator specified information, documents or other materials before a specified time; and

(b) the holder of the production profile does not comply with the request before the specified time.

Conditions

(3) For the purposes of paragraph (1)(b), the Clean Energy Regulator may:

(a) by legislative instrument, determine a condition for the certification of a *registered production profile in a specified class of *registered production profiles; or

(b) by written notice given to the *holder of a *registered production profile, determine a condition for the certification of the *registered production profile.

Notification of certification

(4) If the Clean Energy Regulator certifies a *registered production profile with effect from a particular time (the start time), the Clean Energy Regulator must notify the following of the certification:

(a) the person who applied under section 421A-30 for the certification;

(b) the person who was the *holder of the production profile at the start time;

(c) each person who was a holder of the production profile at any time between:

(i) the start time; and

(ii) the time when the instrument of certification is made;

(d) the Commissioner.

No duty to seek information about eligibility statement

(5) This section does not impose a duty on the Clean Energy Regulator to seek information relevant to assessing whether the eligibility statement for the *registered production profile is incorrect that goes beyond:

(a) information possessed by the Clean Energy Regulator at the time when the Clean Energy Regulator received the application for certification of the registered production profile; and

(b) information that was contained in, or that accompanied, that application.

421A-40 Revocation of certification

(1) This section applies if a *production profile has been certified in relation to a facility and a *production pathway with effect from a particular time (the original start time).

Revocation substantive grounds

(2) The Clean Energy Regulator may, in writing, revoke the certification if:

(a) on or after the original start time, the registration of the *production profile is suspended, cancelled or surrendered under the Future Made in Australia (Guarantee of Origin) Act 2024; or

(b) there is a time, on or after the original start time, when a condition prescribed under subsection 421A-40(3) of this Act (if any) is not met in relation to the facility and the *production pathway; or

(c) at the time when the instrument of revocation is made, the Clean Energy Regulator reasonably believes that the eligibility statement for the production profile that accompanied the application for certification(see paragraph 421-60(3)(c)) is incorrect.

(3) A revocation under subsection (2) has effect from the time (the new end time for the certification) specified in the instrument of revocation, which must be:

(a) if the certification is revoked under paragraph (2)(a)—the time when the registration of the *production profile was suspended, cancelled or surrendered; or

(b) if the certification is revoked under paragraph (2)(b)—the earliest time, on or after the original start time, when the condition in subsection 421A-35(3) is not met in relation to the facility and the *production pathway; or

(c) if the certification is revoked under paragraph (2)(c)—no earlier than the time when the instrument of revocation is made.

Note: If the certification is revoked under paragraph (2)(a) or (b), the revocation will have retrospective effect.

Revocation failure to provide information etc.

(4) In addition, the Clean Energy Regulator may, in writing, revoke the certification if:

(a) the Clean Energy Regulator has given the *holder of the *production profile a notice under subsection 421A-45(2) that relates to the certification, requesting that the holder give the Clean Energy Regulator specified information, documents or other materials before a specified time; and

(b) the holder of the production profile does not comply with the request before the specified time.

(5) A revocation under subsection (4) has effect from the time (also the new end time for the certification) specified in the instrument of revocation, which must not be before the time specified in the notice mentioned in paragraph (4)(a).

Note: A revocation under subsection (4) may be given retrospective effect.

Consequences of revocation

(6) If the new end time for the certification is the same as the original start time, then the certification is taken never to have been in effect.

(7) If the new end time for the certification is later than the original start time, then:

(a) the certification is taken to have been in effect for the period that:

(i) begins at the original start time; and

(ii) ends at the new end time; and

(b) the certification is taken not to have been in effect after the new end time.

Note: The operation of subsections (6) and (7) may affect whether paragraph 421A-5(1)(c) (which sets out a condition for entitlement to the low carbon liquid fuel production tax offset) is satisfied in a particular case.

(8) If a certification of a *production profile that relates to a particular facility and *production pathway is revoked, that does not prevent:

(a) an application later being made for a new certification of the production profile, including a certification that relates to the same facility and production pathway; or

(b) the Clean Energy Regulator subsequently issuing such a new certification of the production profile.

Notification of revocation

(9) If the Clean Energy Regulator revokes a certification of a *production profile, the Clean Energy Regulator must notify the following of the revocation:

(a) the person who was the *holder of the production profile at the original start time for the certification;

(b) each person who was a holder of the production profile at any time between:

(i) the original start time for the certification; and

(ii) the time when the instrument of revocation is made;

(c) the Commissioner.

421A-45 Requests for further information etc.

Request before certification

(1) If the Clean Energy Regulator has received an application for a *registered production profile to be certified, the Clean Energy Regulator may, before making a decision about whether to certify the profile under section 421A-35, give a written notice to the *holder of the profile:

(a) requesting that the holder give the Clean Energy Regulator, before a specified time, specified information, documents or other materials that are relevant to making that decision; and

(b) stating that, if the request is not complied with before the specified time, the Clean Energy Regulator may refuse to certify the production profile.

Request after certification

(2) If the Clean Energy Regulator has certified a *registered production profile under section 421A-35, the Clean Energy Regulator may give a written notice to the *holder of the profile:

(a) requesting that the holder give the Clean Energy Regulator, before a specified time, specified information, documents or other materials that are relevant to deciding whether to revoke the certification under subsection 421A-40(2) (revocation on substantive grounds); and

(b) stating that, if the request is not complied with before the specified time, the Clean Energy Regulator may revoke the certification.

Subdivision 421A-C — Other matters

Table of sections

421A-50 Review of decisions by the Administrative Review Tribunal

421A-55 Information sharing

421A-60 Period for amending assessments

421A-50 Review of decisions by the Administrative Review Tribunal

Applications may be made to the *ART for review of the following decisions made by the Clean Energy Regulator:

(a) a decision under subsection 421A-35(1) to issue a *correction notice;

(b) a decision under subsection 421A-35(4) to revoke a correction notice;

(c) a decision under section 421A-20 to certify a *registered production profile;

(d) a decision under section 421A-20 not to certify a registered production profile (after an application to certify the profile has been made under section 421A-30);

(e) a decision under section 421A-40 to revoke a certification of a *production profile.

421A-55 Information sharing

(1) Each of the following regulators:

(a) the Clean Energy Regulator;

(b) the Commissioner;

may request the other regulator to provide them with information held by the other regulator that is reasonably necessary or convenient for the requesting regulator's administration of this Division.

(2) The other regulator must comply with the request.

Note: The request could be an ad hoc or standing request, and the information requested could be general or specific.

421A-60 Period for amending assessments

Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an entity's assessment for the purposes of giving effect to this Division for an income year if:

(a) the Clean Energy Regulator:

(i) issues, or revokes, a *correction notice under section 421A-20; or

(ii) makes an instrument under section 421A-40 revoking a certification of a *production profile, with effect from a specified time (which may be different from the time when the instrument is made); and

(b) as a result, there is a change to:

(i) whether the entity is entitled to a *low carbon liquid fuel production tax offset for the income year; or

(ii) the amount of low carbon liquid fuel production tax offset that the entity is entitled to for the income year; and

(c) the amendment of the entity's assessment is made during the period of 4 years starting on the day when the Clean Energy Regulator issues or revokes the correction notice, or makes the instrument revoking the certification of the production profile.

Note: Section 170 of the Income Tax Assessment Act 1936 specifies the periods within which assessments may be amended.

4 Subsection 995-1(1)

Insert:

LCLFPTO community benefit rules (short for "low carbon liquid fuel production tax offset community benefit rules") means the rules made under section 421A-25.

low carbon liquid fuel production tax offset has the meaning giving by subsection 421A-5(1).

low carbon liquid fuel:

(a) means a liquid fuel derived from renewable, waste, or other low-carbon sources; and

(b) includes sustainable aviation fuel, renewable diesel, biofuels, synthetic fuels, and fuels produced from captured carbon but does not include fossil fuel-derived liquid fuel.

Taxation Administration Act 1953

5 In the appropriate position in Part IA

Insert:

3M Reporting of information about low carbon liquid fuel production tax offset

(1) This section applies to an entity in relation to an income year if, according to information the entity gave the Commissioner, the entity is entitled under Division 421A of the Income Tax Assessment Act 1997 to a tax offset for the income year.

(2) The Commissioner must, as soon as practicable after the second 30 June after the financial year corresponding to the income year, make publicly available the information mentioned in subsection (3).

(3) The information is as follows:

(a) the entity's name;

(b) the entity's ABN or, if the first information the entity gave the Commissioner indicating the entity's entitlement to the tax offset does not include the entity's ABN but does include the entity's ACN (within the meaning of the Corporations Act 2001), the entity's ACN;

(c) the sum of the amounts of the tax offsets that the entity is entitled to under Division 421A of the Income Tax Assessment Act 1997 for the income year, where the amount of each tax offset is worked out according to the first information that the entity gave the Commissioner indicating the entity's entitlement to the tax offset.

(4) Subsection (5) applies if:

(a) the entity gives the Commissioner notice, in the approved form, that the information mentioned in subsection (3) contains an error; and

(b) the notice contains information that corrects the error.

(5) The Commissioner may at any time make the information mentioned in paragraph (4)(b) publicly available, in accordance with subsection (2), in order to correct the error.

(6) To avoid doubt, if the Commissioner considers that information made publicly available under subsection (2) fails to reflect all of the information required to be made publicly available under that subsection, the Commissioner may at any time make publicly available other information in order to remedy the failure.

(7) An expression used in this section and in the Income Tax Assessment Act 1997 has the same meaning in this section as in that Act.

Question negatived.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.