Natural resources taxes

Date

G. Natural resources taxes

G1 Crude Oil Excise
Fuel and energy ($m)
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
- - * * * * * *
Tax expenditure type: Concessional rate 2013 TES code: G6
Estimate reliability: Not Applicable * Category NA
Commencement date: 1 July 2012 Expiry date:  
Legislative reference: Petroleum Resource Rent Tax Assessment Act 1987

Under the natural resource benchmark, crude oil excise is treated as a prepayment of Petroleum Resource Rent Tax (PRRT) liabilities and to the extent that the crude oil excise exceeds the PRRT payable in a year, a negative tax expenditure will arise for that period. Where crude oil excise credits are carried forward and used to reduce PRRT in later periods, a tax expenditure will arise in the year the carried forward credit is utilised.

G2 PRRT — denial of refund of tax credits for losses at project end
Fuel and energy ($m)
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
- - * * * * * *
Tax expenditure type: Denial of refund 2013 TES code: G8
Estimate reliability: Not Applicable * Category 1-
Commencement date: 1 July 1990 Expiry date:  
Legislative reference: Petroleum Resource Rent Tax Act 1987

There is no refund of the tax value of losses available when a project closes down. This treatment is consistent with the benchmark prior to 1 July 2012 but gives rise to a tax expenditure under the benchmark applying from 1 July 2012.

G3 PRRT — expenditure uplift rate
Fuel and energy ($m)
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
- - * * * * * *
Tax expenditure type: Deduction 2013 TES code: G9
Estimate reliability: Not Applicable * Category 2+
Commencement date: 1 July 1990 Expiry date:  
Legislative reference: Petroleum Resource Rent Tax Act 1987

Expenditure that generates project losses is uplifted at a number of different rates depending on when the expenditure took place and the nature of the expenditure. For example exploration expenditure is uplifted at the long term bond rate plus 15 percentage points and general expenditure is uplifted at the long term bond rate plus 5 percentage points. These uplift rates are beyond the appropriate benchmark rate of the long term bond rate.

G4 PRRT — gas transfer price regulations
Fuel and energy ($m)
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
* * * * * * * *
Tax expenditure type: Deduction 2013 TES code: G10
Estimate reliability: Not Applicable * Category 2+
Commencement date: 20 December 2005 Expiry date:  
Legislative reference: Petroleum Resource Rent Tax Assessment Regulations 2005

The PRRT gas transfer price regulations stipulate rules for calculating the gas transfer price where there is no arm's length transaction. The regulations provide an allowance for capital expenditure which is based on the long term bond rate plus 7 percentage points rather than the benchmark rate which is the long term bond rate. The regulations also provide further concessions in the calculation of the gas transfer price by reducing the estimated upstream gas price by half the difference between the estimated of 'upstream' price and the estimated 'downstream' price where the upstream price is the higher.

G5 PRRT — starting base and uplift rate for capital assets
Fuel and energy ($m)
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
- - * * * * * *
Tax expenditure type: Deduction 2013 TES code: G12
Estimate reliability: Not Applicable * Category 2+
Commencement date: 1 July 2012 Expiry date:  
Legislative reference: Petroleum Resource Rent Tax Assessment Act 1987

Existing investments of projects brought under the PRRT on 1 July 2012 are recognised through the provision of a starting base allowance. The starting base allowance recognises assets relating to the upstream assets of the PRRT project on 2 May 2010. Unused starting base losses are uplifted at the long term bond rate plus 5 percentage points. Unused exploration expenditure under the look back valuation option is uplifted at long term bond rate plus 15 percentage points.