• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 7/11/2013

Australia - Petroleum resource rent tax considerations for resource companies 

July 11: Taxpayers in Australia with interests in petroleum projects need to consider that:
  • Recent judicial consideration of the meaning of the term “exploration”—in a petroleum resource rent tax (PRRT) context—requires an analysis of historical positions adopted in characterizing the expenditure as an exploration. This analysis is relevant also for taxpayers that inherited an exploration expenditure on acquiring an interest in a petroleum project.
  • Legislative changes made after the judicial decision largely reinstate the historical industry and tax authorities’ view in relation to apportionment of an expenditure for PRRT purposes—although the requirement to “look through” certain related-party transactions must be considered.
  • Amendments to the PRRT regulations (which make the legislated approach to determining a gas transfer price available to integrated onshore, gas to electricity, and the North West Shelf project) also require consideration for effected taxpayers.

These legislative and judicial developments, affecting the taxation of resource companies, need to be considered for the purposes of 30 June 2013 tax provision and deferred tax calculations.

Read a July 2013 report prepared by the KPMG member firm in Australia: PRRT considerations for resource companies

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