Australia

Details

  • Service: Tax, Corporate Tax, Topics, Tax Reform, Resource Taxation
  • Industry: Energy & Natural Resources
  • Type: Regulatory update
  • Date: 15/10/2013

Tax Insights

KPMG's analysis of tax issues and developments.

Ben Opie

Ben Opie
Partner, Tax

+61 8 9263 7189

bopie@kpmg.com.au

Onshore PRRT obligations are not just for producers 

by Ben Opie, ENR Specialist

For Petroleum Resource Rent Tax (PRRT) taxpayers with interests in onshore petroleum projects various compliance, reporting and accounting obligations arise with respect to the year ended 30 June 2013.

In particular:

  • a starting base return is required to be lodged by 1 June 2014 for all exploration permits, retention leases and production licences that were held at 30 June 2013 and that existed at 2 May 2010
  • a PRRT return must be lodged for petroleum projects that produced assessable receipts during the year ended 30 June 2013.


Additionally, as PRRT is considered to be an income tax for the purpose of AASB 112: Income taxes it is necessary to quantify and potentially recognise current and deferred tax balances.

 

PRRT taxpayers also need to be in a position to quantify and evidence their PRRT position when disposing of an interest in a PRRT project.

 

To be able to meet these obligations, taxpayers have a significant number of matters to consider and conclude upon, including:

 

  • determining which starting base methods are available and choosing which to apply, having regard to both the quantum of the starting base under each method as well as the associated compliance costs
  • recent developments, including legislative amendments following the Esso Decision and also Draft Tax Ruling TR 2013/D4 (relating to the meaning of exploration for PRRT purposes) will need to be understood and applied in quantifying and categorising deductible expenditure
  • the ability to transfer exploration expenditure, including to offshore PRRT projects
  • the application of recognition criteria and exemptions that apply under AASB 112.


It is important that taxpayers are well advanced in considering these matters in order to be able to meet PRRT obligations.

 

Share this

Share this

Resource Taxation

Resource Taxation
We look at the resource tax landscape which is experiencing significant change with the proposed repeal of the MRRT and amendment of the PRRT.

Tax

Our Tax Team assists with corporate tax, transfer pricing, indirect tax, international executive services, R&D incentives, superannuation and more.

Energy & Natural Resources

KPMG's Energy & Natural Resources team provides services to all key sectors: mining, oil and gas, power and utilities, renewables, forestry and water.