Cyclone Seroja update
Capital contributions, both cash contributions and assets that are gifted to Western Power, are treated as assessable income under the National Tax Equivalents Regime (NTER). We must pay tax on this income.
We reviewed our costs of taxation with the ERA (Economic Regulatory Authority) as part of our Third Access Arrangement (AA3) including whether it was appropriate to pass these costs onto all customers as part of network tariff.
The ERA concluded it is more appropriate for these costs to be passed onto the customer requesting the work. Further information on the ERA’s decision can be found at erawa.com.au
We commenced recovery of the tax on capital contributions on 5 January 2015. The rate of recovery is 13.9%. When determining this amount, we took account of the tax we pay and the benefits we receive from depreciation and interest. The amount was independently reviewed and verified by external advisors.