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  • Petroleum resource rent tax

    The petroleum resource rent tax (PRRT) is a profits-based tax that taxes profits generated from the sale of marketable petroleum commodities (MPCs) above a specified rate of return.

    PRRT is paid when a petroleum project’s total assessable receipts exceed total eligible expenditure. Due to their nature, petroleum projects experience periods of significant negative cash flow during the exploration and construction phases before a project becomes cash flow positive. All deductible expenditure for PRRT purposes is immediately deductible, whether capital or revenue and carried forward if unutilised. This carried forward expenditure is also uplifted annually to offset future positive cash-flow periods.

    These factors and the long lead times before production commences typically delay the time when projects become PRRT payable.

      Last modified: 10 Dec 2021QC 67484