The Henry Tax Review - The resource super profits tax's impact on the Energy & Resources sector

The Federal Government's proposed Resource Super Profits Tax has attracted a lot of attention, but what does it actually involve? How will it operate? And how attractive will it make Australia as a target for investment - or M&A?

In our special Henry Tax Review analysis, our Tax and Energy and Resources teams explore aspects of the proposed Resource Super Profits Tax.

At a glance

• The Resource Super Profits Tax is a separate tax on profits of a company from Australian resource projects and will be levied at 40%. It is deductible in calculating the company's income tax liability, but won't generate franking credits as it is not an income tax.
• We think this will reduce Australia's attractiveness for investment in the mining sector, but might lead to more M&A activity.
• Given the concerns the current proposals are generating, we would expect the Federal Government to modify the Resource Super Profits Tax regime.