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  • Petroleum resource rent tax gap

    The petroleum resource rent tax (PRRT) is a tax on profits generated generally from the sale of oil and gas products, known as marketable petroleum commodities (MPCs). It is levied in addition to income tax payable by the owners of petroleum projects, and is paid on:

    • stabilised crude oil
    • sales gas
    • condensate
    • liquefied petroleum gas (LPG)
    • ethane
    • shale oil
    • any other product declared by regulation to be an MPC.

    The PRRT gap is an estimate of the difference between the amount of PRRT payable under the law (theoretical PRRT liability) and the amount actually collected by us (actual PRRT revenue) for a defined period, typically a financial year.

    PRRT is assessed on a project basis, which means an entity calculates its liability separately for each project interest it holds.

    Estimate of the tax gap

    Our estimate of the PRRT gap covers four financial years, from 2013–14 to 2016–17. For 2016–17 we estimate the PRRT gap to be 2.1% or $22 million. In other words, we estimate that almost 98% of the theoretical PRRT payable was paid in 2016–17.

    We use a bottom-up methodology to estimate the PRRT gap. This is considered the most appropriate method based on the small size of the population and the high level of coverage we have.

    Compliance in this population is high. The main driver of the gap is complexity in the law which may lead to different interpretations of how the law applies.

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      Last modified: 17 Oct 2019QC 57597