Did you know?
1. The 40% tax applies only to profit earned over and above the long term bond rate, currently 6% return on assets per annum, but could be as high as 10% per annum
2. The current royalty regime will continue, but all payments made will be credited by the tax office
3. Normal company tax will be credited against RSPT in the year payable
4. In most years, there will be no RSPT payable; in fact where there are losses, they will be “carried forward” to offset future RSPT liabilities
5. The objective is to tax only “windfall” profits generated by boom commodity prices, so it is based on the age old taxation principle of ability to pay. In “normal” years, little or no RSPT would be payable, nor would royalties be payable.
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1 comments:
What happens when a company's cost of capital exceeds the risk-free rate? Essentially they will be taxed before they even make a "profit" relatively speaking...
Moreover, would you want the Government telling you how much profit was appropriate?
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