Mineral Royalty Act 1982

This section applies if:

a saleable mineral commodity is removed from a production unit without sale, whether on consignment or otherwise; and

the commodity is dealt with by the royalty payer in circumstances that involve transfer pricing; and

section 4AAA(3)(c) requires the alternative value for the commodity for section 4AAA(2)(b) to be calculated under this section.

The alternative value is calculated using the following formula:

where:

A is the alternative value for the saleable mineral commodity.

V is the final value for the saleable mineral commodity.

T is:

if the substantiated TPF is greater than 5.5% – 0.055; or

otherwise – the substantiated TPF expressed as a decimal number.

The final value for the saleable mineral commodity is:

if the commodity has been sold in an arm's length transaction between parties who are not related to each other – the price for which it was first so sold; or

if the royalty payer establishes and substantiates the final value of the commodity to be another amount (whether because the commodity has not been sold to an unrelated party, the sale was not at arm's length or for another reason) – that other amount.

The substantiated TPF is the amount established and substantiated by the royalty payer to be the transfer pricing factor expressed as a percentage of the final value of the saleable mineral commodity.