Is valuation part of your Minerals Resource Rent Tax (MRRT) response plan? If not, it should be.

After more than 18 months in the making, the Federal Government has presented the Minerals Resource Rent Tax Bill to parliament. Now is the time to start implementing your MRRT response plan.

Setting the value of assessable receipts and establishing the starting base value for assets may require specialist valuation advice. Obtaining professional, independent valuations to support revenue calculations and starting base balances will ensure that any market value calculations are rigorous, transparent and defensible.

Valuation of resource revenue
If an arm’s length sale of the resource to a third party is not available at the valuation point, you may require assistance to determine a sensible supportable valuation methodology. Given the different and possibly unique cases that may arise, it is important to select a methodology appropriate for the circumstance. Even if a methodology is directly legislated and guidance is provided, it is prudent to obtain professional valuation advice during implementation.

American Appraisal’s financial valuation group has significant experience producing valuations for many purposes. Our extensive knowledge will be beneficial in determining taxable revenue within the MRRT framework.

Starting base values
The starting base allowance could be one of the most significant deductions in determining your final MRRT liability.

If you choose the market value method, market valuations of your tangible and certain intangible assets and mining rights will be a critical component of your MRRT process.

Determining the market value of assets that form the starting base is likely to require consideration of all activities that take place along the production value chain. It may be necessary to determine the value of tangible assets both upstream and downstream of the valuation point in calculating your starting base allowance and to determine an appropriate market value for the mining rights, which can be included in the starting base under the market value method.

Related link: http://www.futuretax.gov.au