OIL

ATO defers decision on depreciation of gas assets

Infrastructure investment worth hundreds of million of dollars could be in jeopardy after the Australian Tax Office once again deferred its decision on effective life depreciation of gas industry assets.

The ATO has told the industry the deferral will be for another six months.

Executive director of the Australian Gas Association, Mr Bill Nagle, said it would have the biggest impact on the developers of major projects such as the North West Shelf, as well as proponents of gas transmission lines on new offshore gas and oil developments.

The ATO review of the effective life of gas assets began after the New Tax System, introduced last year, scrapped accelerated depreciation. At the time, pipelines were depreciated over eight years.

The tax commissioner said he would consider progress made by the Council of Australian Governments Review of Energy "to determine whether or not the review has implications for the taxation treatment of the gas industry".

AGA's Mr Nagle said his group welcomed the deferral, however added it was critical that the COAG energy review considered as one of its first priorities the effect which ATO determinations - such as the effective life on long-lived gas infrastructure - would have on the future development of Australia's gas network.

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