Are you ready to lodge your starting base return and first PRRT return by 1 June 2014?
Of course, if you have a PRRT liability for the 2012/13 year or a requirement to pay a quarterly instalment in respect of the 2013/14 year, then an earlier due date will apply.
If you are still to get started, then you can’t put it off any longer – unlike the Minerals Resource Rent Tax (MRRT), there is no current proposal to repeal the expanded PRRT.
All petroleum interests in existence at 30 June 2012 are entitled to have a starting base established, with the holder at 30 June 2013 being responsible for lodging the starting base return. While you can engage an external valuer (e.g. KPMG) to undertake PRRT starting base valuations at 2 May 2010, as alternatives, you can choose:
- book value method
- look-back method.
Our experience to date is that the look-back method is the way to go for many. However, it requires access to, and analysis of, accounting records back to 1 July 2002 – obviously if accounting records are not available back that far, then it may not be possible to identify all eligible real expenditure.
Explorers please note: even if you have no other PRRT obligations, you can still lodge a starting base return if you hold onshore petroleum interests. Why would you do it? Because once you have lodged a valid starting base return, that creates an asset (i.e. starting base) that you can either use if the petroleum interest subsequently produces or, in the event of a sale, it is transferable with the petroleum interest to the acquirer.
And don’t forget about the potential accounting implications for PRRT and systems changes required to capture the necessary PRRT data for future compliance obligations and eliminate headaches later.