Conservation tillage refundable tax offset

Please note: If you have purchased and installed eligible equipment in the 2012-13 financial year, you must complete your Research Participation Certificate application form by 30 June 2013 to claim the 15 per cent refundable tax offset.

Overview

Primary producers who purchase new conservation seeding equipment and receive a Research Participation Certificate can apply for a 15 per cent refundable tax offset (RTO).

This initiative is designed to encourage conservation tillage practices in Australian agriculture. The RTO is part of the Carbon Farming Futures Program under the Australian Government’s Securing a Clean Energy Future Plan.

What do I need to do to claim the offset?

1. Purchase and install a new, eligible conservation tillage seeder
2. Fill out a Research Participation Certificate application form in the same financial year as your equipment is installed
3. Receive a Research Participation Certificate
4. Claim the offset in your tax return

Steps to claim the offset

1. Purchase and install a new, eligible conservation tillage seeder

To be eligible for the RTO you must first purchase and install a conservation tillage seeder. This seeder 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.

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.

Note: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 separate purchase of a new air-cart (for use with an existing seeder bar) is not covered by the RTO.

The RTO does not cover second hand equipment or retrofitting of existing equipment.

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 section 995-1.

For more information on eligibility requirements, including what equipment is eligible for the RTO please refer to conservation tillage refundable tax offset on the Australian Taxation Office (ATO) website.

2. Fill out a Research Participation Certificate application form

Once your eligible seeder has been delivered to your property, you must apply for a Research Participation Certificate. You can do this using the Research Participation Certificate application form.

You must fill in the Research Participation Certificate application form, which includes a Conservation Tillage Survey, in the same income year that your eligible seeder is installed and ready for use.

To assist primary producers who may have poor internet access, the electronic form can be saved to a computer. This means that you can complete the form without being connected to the internet. However, you do need to reconnect to the internet when you are ready to submit the form.

You must fill in the Research Participation Certificate application form, which includes a Conservation Tillage Survey, in the same income year that your eligible seeder is installed and ready for use.

The Research Participation Certificate application form, including the conservation tillage survey, compromises questions on the following:

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

The application form will be used to provide information to DAFF and the ATO about your conservation tillage activities and the equipment you have purchased.

3. Receive a Research Participation Certificate

A Research Participation Certificate will be issued by DAFF - (to your nominated email account) once your application form has been successfully completed and submitted. A copy of your Research Participation Certificate will be provided to DAFF and the ATO at the same time.

4. Claim the offset in your tax return

Once you have completed steps 1 to 3, you can claim the RTO in your tax return at the end of the relevant income year. For example, if your new seeder was supplied and installed ready for use on 1 October 2012, you will claim the RTO as part of your 2012–13 tax return.

You 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)
• your Research Participation Certificate.

More information about the conservation tillage refundable tax offset 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 DAFF regarding additional research activities at a later time. However, your claim for the 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

Tax implications

Applicants are advised to seek tax advice before applying for the RTO. Further information about the conservation tillage refundable tax offset is available on the ATO website.

Privacy Statement

Information collected by DAFF through the RTO application process in accordance with the ITAA will be used to assess applications, administer the Carbon Farming Futures Program and create a data set that may be used for further agricultural research and for other incidental or related purposes. Although applying for the RTO is not conditional on being involved in any additional research activities, DAFF may also use contact details supplied by applicants to approach them regarding participation in such activities. The Secretary of DAFF 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. DAFF may also provide the ATO with a copy of an application, information contained in an application or other information provided to DAFF by an applicant or a person who has been issued with a Research Participation Certificate. DAFF 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:

Carbon Farming Futures – Refundable Tax Offset
Climate Change Policy Division
Department of Agriculture, Fisheries and Forestry
GPO Box 858 Canberra ACT 2601

More information

For more information about the RTO, please call DAFF's Conservation Tillage RTO Hotline on 1800 108 760 or email Refundable Tax Offset.