• Service: Tax, Topics, Tax Reform, Resource Taxation
  • Industry: Energy & Natural Resources
  • Type: Business and industry issue
  • Date: 7/05/2013

Tax Insights

KPMG's analysis of tax issues and developments.

Rod Henderson

Rod Henderson
Partner, Tax

+61 2 9335 8787

Rebalancing Resource Taxation - 'Fair share' or 'Resource Nationalism' 

by Rod Henderson, Asia Pacific Regional Tax Leader – ENR Tax
In the Asia Pacific region, energy and natural resources (ENR) companies conduct their global businesses through people, facilities and transactions across many countries from pit to port to customer. As governments seek to secure tax revenues to fund budgets, companies are challenged to demonstrate that they are paying their fair share of taxes. But to whom?

Competing for investment dollars, countries often seek business investment by offering favourable and stable tax rules. Some countries offer lower tax rates to attract activities such as commodity marketing. Other countries, wishing to secure resource and energy security, offer tax concessions for new mining activities.  


Companies are looking for certainty. This will involve a range of measures from stakeholder communication of total taxes paid to forging closer relations with tax authorities. Companies are using tools such as advanced compliance agreements, ruling requests and tax policy submissions to government policy makers. When investing into new projects, companies are using advanced pricing agreements, bilateral investment treaties and fiscal stability agreements to obtain certainty around key tax variables underlying investment decisions.


Ultimately, ENR companies must demonstrate that they are paying their fair share of taxes across all jurisdictions in which they operate. A reciprocal demonstration of tax certainty and a welcoming investment environment from the countries in which companies invest and obtain their licence to operate is equally valuable.


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