Conservation tillage refundable tax offset

On 15 October 2013, the Government released its Repeal of the Carbon Tax Exposure Draft and Consultation Paper for public comment.

As part of the repeal, the Government intends to discontinue the Conservation Tillage Refundable Tax Offset as of 1 July 2014.

The proposed changes will not affect primary producers wishing to access the scheme for the 2013–14 income year.

Should you require further information about the repeal of the Carbon Tax, please visit the Department of the Environment website.


Primary producers should ensure they are familiar with all eligibility requirements and are encouraged to plan well ahead of purchasing eligible equipment and claiming the offset.

2012–13 income year:

Research Participation Certificates for the 2012–13 income year can no longer be issued. Under the legislation, the conservation tillage survey (contained within the Research Participation Certificate application form) must have been completed and submitted prior to 1 July 2013.

2013–14 income year:

If you require a Research Participation Certificate for the 2013–14 income year, you must complete and submit the Research Participation Certificate application form on or before 30 June 2014.

The Research Participation Certificate form (application and survey) can only be completed once the machinery has been delivered to and is installed, ready for use, on your property.

Overview

Primary producers who purchase new conservation seeding equipment and receive a Research Participation Certificate can apply to the Australian Taxation Office (ATO) for a 15 per cent refundable tax offset.

The Conservation Tillage Refundable Tax Offset (RTO) initiative is part of the Carbon Farming Futures program and is designed to encourage conservation tillage practices in Australian agriculture.

The RTO is jointly administered by the ATO and the Department of Agriculture. The ATO is responsible for all matters relating to eligibility and the issuing of the offset through the taxation system. The ATO provides information about the Conservation Tillage Refundable Tax Offset on its website. The Department of Agriculture is only responsible for administering and issuing of Research Participation Certificates.

Tax implications

Primary producers are advised to seek tax advice before applying for the RTO—the Department of Agriculture cannot provide tax advice.

What do I need to do to claim the offset?

  1. Purchase and install new, eligible conservation tillage seeder
  2. Complete and submit a Research Participation Certificate application form on or before 30 June 2014 of the same income year the equipment is installed ready for use
  3. Receive a Research Participation Certificate
  4. Claim the offset in your tax return

Steps to claim the offset

Primary producers should familiarise themselves with the eligibility requirements before purchasing equipment and seeking to claim the offset.

1. Purchase and install new, eligible conservation tillage seeder

To be eligible for the Refundable Tax Offset (RTO) primary producers must purchase and install conservation tillage equipment that must be:

  • new and eligible
  • installed and ready for use between 1 July 2012 and 30 June 2015*
  • for use in a primary production business.

* As part of the repeal of the Carbon Tax, the Government intends to discontinue the Conservation Tillage Refundable Tax Offset as of 1 July 2014. If repealed, the RTO will not be available for the 2014–15 income year.

Definition of eligible seeder

Under section 385-235 of the Income Tax Assessment Act 1997 (ITAA) an eligible no–till seeder is a no–till seeder (comprising the tool, or combination of cart and tool) that is:

  • a tine machine fitted with minimum tillage points designed to achieve minimum soil disturbance and less than full cut–out; or
  • a disc opener with single, double or triple disc blades designed to achieve minimum soil disturbance and less than full cut–out; or
  • a disc/tine hybrid machine fitted with single, double or triple disc arrangements fitted with minimum tillage points to achieve minimum soil disturbance and less than full cut–out; or
  • a disc/blade hybrid machine with single, double or triple disc arrangements fitted with blades to achieve minimum soil disturbance and less than full cut–out.

Narrow points, knife points and inverted “T” points are considered minimum tillage points designed to achieve minimum soil disturbance and less than full cut–out.

Importantly, producers can claim the offset on a seeder unit that is a combination of a cart and tool (e.g. comprises an air–cart and seeder bar), or on the separate purchase of the tool (e.g. separate seeder bar to be used with an existing air–cart).

The RTO does not cover:

  1. the separate purchase of a new air-cart for use with an existing seeder bar.
  2. second hand equipment or retrofitting of existing equipment.

The Department of Agriculture cannot provide information on eligibility requirements, including the eligibility of equipment. Please direct queries to the ATO or refer to information on the ATO website.

Definition of a primary production business

Under section 995–1 of the ITAA an entity carries on a primary production business if (among other things) they ‘carry on a business of cultivating and propagating plants, fungi or their products or parts (including seeds, spores, bulbs and similar things) in any physical environment, or maintain animals for the purpose of selling them or their bodily produce.’ The full definition of a primary production business is available in the ITAA.

2. Complete and submit a Research Participation Certificate application form on or before 30 June 2014 of the same income year as your equipment is installed, ready for use

Primary producers must apply for a Research Participation Certificate and complete the conservation tillage survey, once the eligible equipment has been delivered to their property and is installed, ready for use. The Research Participation Certificate application form, provided at the link below, contains the application and survey.

Primary producers must complete and submit the Research Participation Certificate application form during the same income year for which the Refundable Tax Offset is being claimed (i.e. on or before 30 June).

How to complete the Research Participation Certificate application form

  1. The Research Participation Certificate application form is to be completed on a computer and submitted online. In most circumstances, certificates are issued within an hour of submission. To assist primary producers who may have poor internet access, the electronic form can be saved to a computer. This means that the Research Participation Certificate application form can be completed without being connected to the internet. However, an internet connection is required to verify the ABN (a button is provided in the form) and for final submission of the application form.

    If you are experiencing problems completing and/or submitting the Research Participation Certificate application form, please ensure JavaScript is enabled (see ‘preferences’ in Adobe Acrobat).

  2. If you do not have access to the internet, or have difficulty in submitting the online Research Participation Certificate application form, please contact the Department of Agriculture on 1800 108 760 or email RTO to request a paper version of the form.

The Department of Agriculture will not accept printed copies of the online form.

The Research Participation Certificate application form compromises questions on the following:

  • Applicant and business details (application)
  • Conservation seeder details (application)
  • Land use (survey)
  • Benefits that the new seeder will bring to your business (survey)
  • General management and farming practices (survey)
  • Soil management (survey)
  • Farm decision making and climate change (survey).

The Research Participation Certificate application form will be used to provide information to the Department of Agriculture and the Australian Taxation Office about your conservation tillage activities and the equipment you have purchased.

When to complete the Research Participation Certificate application form

The Research Participation Certificate application form must be completed and submitted to the Department of Agriculture during the relevant income year for which the Refundable Tax Offset is being claimed (this is the year the equipment was installed, ready for use). For example:

  • If a certificate was required for the 2012–13 income year, the form must be completed and submitted on or before 30 June 2013
  • If a certificate is required for the 2013–14 income year, the form must be completed and submitted on or before 30 June 2014
  • If a certificate is required for the 2014–15 income year, the form must be completed and submitted on or before 30 June 2015*.

* As part of the repeal of the Carbon Tax, the Government intends to discontinue the Conservation Tillage Refundable Tax Offset as of 1 July 2014. If repealed, the RTO will not be available for the 2014-15 income year.

3. Receive a Research Participation Certificate

A Research Participation Certificate will be emailed by the Department of Agriculture to the email account you have nominated in the Research Participation Certificate application form once the application form has been successfully completed and submitted. A copy of the Research Participation Certificate will be provided to the Department of Agriculture and the Australian Taxation Office (ATO). Please contact the Department of Agriculture on 1800 108 760 or email RTO if a certificate is not received within one business day of the Research Participation Certificate application form being submitted successfully.

The Department of Agriculture cannot issue a certificate for an income year once the end of the income year has passed. The Research Participation Certificate application form must be completed and submitted by the primary producer who has purchased the eligible equipment during the income year for which the Refundable Tax Offset is being claimed (i.e. on or before 30 June).

4. Claim the offset in your tax return

Once steps 1 to 3 have been completed the Refundable Tax Offset (RTO) can be claimed in a tax return for the relevant income year. For example, if a new seeder was supplied and installed ready for use on 1 October 2013, the RTO can only be claimed as part of the 2013–14 tax return.

Primary producers will need to retain on your files:

  • evidence of the purchase, which clearly identifies the type of equipment that has been purchased (as with claims for other deductions and offsets)
  • the Research Participation Certificate.

The Department of Agriculture is not responsible for assessing tax claims and issuing the offset. Information about claiming the RTO is available on the ATO website.

Additional conditions

The information collected in the Research Participation Certificate application form will be used to create a data set that may be used for further agricultural research. By applying for a Research Participation Certificate, you agree that you may be approached by the department regarding additional research activities at a later time. However, your claim for the Refundable Tax Offset (RTO) is not conditional on being involved in any additional research activities. If you choose not to be involved in additional research activities you will not be required to pay back the amount received through the RTO.

Example

The following example illustrates how a primary producer may go about claiming the RTO:

Fred owns a wheat and sheep farm near Griffith in New South Wales and is a primary producer. Fred would like to carry out more conservation tillage practices, and has heard about a refundable tax offset for new conservation tillage equipment.

On 10 July 2013, Fred goes into his local farm equipment and supplies store and orders a new disc seeder. The disc seeder costs $200,000 (including GST).

On 2 January 2014, the disc seeder is delivered to Fred’s property. Fred assembles the disc seeder so that it is ready to be hooked up to his tractor. At this point, the asset is deemed installed and ready for use.

Fred applies for a Research Participation Certificate through the Australian Government Department of Agriculture. After completing and successfully submitting the online form (including his details and the conservation tillage survey), Fred is issued with a Research Participation Certificate.

Fred then applies for the RTO, through the ATO, in his 2013–14 tax return.

More information

The RTO is jointly administered by the Australian Taxation Office and the Department of Agriculture.

The ATO is responsible for all matters relating to eligibility and the issuing of the offset through the taxation system. The ATO provides information on its website and can also be contacted by phone.

The Department of Agriculture is only responsible for the issuing of Research Participation Certificates. If you require more information on the certificate and conservation tillage survey, please call the department on 1800 108 760 or email Refundable Tax Offset.

Privacy Statement

Information collected by the department through the RTO application process in accordance with the ITAA will be used to assess applications and create a data set that may be used for further agricultural research, policy and for other incidental or related purposes. Although applying for the RTO is not conditional on being involved in any additional research activities, the department may also use contact details supplied by applicants to approach them regarding participation in such activities. The Secretary of the department is required under section 385–205 of the ITAA to provide the Commissioner of Taxation with a written notice of the issue of a Research Participation Certificate specifying the income year, date of issue, name and ABN of the entity and such other matters (if any) as the Secretary considers should be reported to the Commissioner, and a copy of the certificate. The department may also provide the ATO with a copy of an application, information contained in an application or other information provided to the department by an applicant or a person who has been issued with a Research Participation Certificate. The department will store personal information collected by it in compliance with its obligations under the Privacy Act 1988 (Cth). Applicants may access or correct personal information either by emailing Refundable Tax Offset or sending a letter to the following address:

Conservation Tillage Refundable Tax Offset
Adaptation Policy Branch
Department of Agriculture
GPO Box 858 Canberra ACT 2601