- 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.