Australian heavy rare earths producer Northern Minerals (ASX: NTU) and the Australian Taxation Office have reached an in-principle agreement regarding the Company’s repayment of the $13.4 million owing in relation to its 2016-17 and 2017-18 R&D claims. Northern Minerals will make monthly repayments over the next 24 months; however, it will also be seeking an internal review of AusIndustry’s decision in relation to R&D claims.
Australian heavy rare earths producer Northern Minerals (ASX: NTU) and the Australian Taxation Office have reached an in-principle agreement regarding the Company’s repayment of the $13.4 million owing in relation to its 2016-17 and 2017-18 R&D claims.
· In-principle agreement reached with Australian Taxation Office regarding outstanding liability repayment;
· Repayment schedule allows timely repayment over a 24-month period; and
· Company to seek an internal review of AusIndustry’s decision in relation to R&D claims.
The key terms of the agreement are set out below:
1. Repayment of the Amount Owing (plus interest) will occur over 24 monthly instalments commencing on and from 1 July 2019 (Payment Arrangement).
2. General Interest Charges (GIC) will accrue on the Amount Owing during the term of the Payment Arrangement at the ‘shortfall interest charge’ rate for each quarter as calculated in accordance with subsection 8AAD(2) of the Taxation Administration Act 1953 (Cth) (rather than the higher ‘GIC’ rate).
3. The Commissioner of Taxation (Commissioner) may consider further remission of the GIC on a retrospective basis upon application by the Company in the future and having regard to the factors set out in the Commissioner’s administrative practice statement and the Company’s circumstances at that time.
4. The Payment Arrangement and security arrangement will be subject to review every 6 months, commencing in December 2019.
5. The Company will grant the Commissioner a second ranking fixed and floating charge over the Company’s assets, which will be supported by a deed of priority between the Company, the ATO and the Company’s other secured creditor.
6. If the Company defaults in its payment obligations, the Payment Arrangement will be terminated and full GIC will apply to the balance of the debt. Default in payment obligations may also result in the ATO (or another secured creditor) enforcing its security.
The above arrangement is subject to the ATO being satisfied with its due diligence on the proposed security arrangements and documents to formalise the arrangements will be drafted by the ATO’s lawyers in due course.