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  • Petroleum resource rent tax

    The petroleum resource rent tax (PRRT) is a profits-based tax that only taxes profits above a specified rate of return.

    PRRT revenues are also affected by key design features of the PRRT. PRRT will only arise when a project has recovered all eligible outlays associated with the project (after deducting eligible exploration expenditure transferred from other projects), including the achievement of a threshold rate of return on the outlays. This means projects tend to pay no PRRT for some years even after production has commenced.

    Unlike income tax, where many capital costs are deductible over a defined life, all deductible expenditure for PRRT purposes is immediately deductible, whether capital or revenue.

    Total petroleum resource rent tax payable

    There are 14 corporate entities in the 2016–17 PRRT transparency population, with total PRRT payable of $946 million. The number of entities paying PRRT increased from nine in the previous year and PRRT payable increased from $845 million.

    The increase in PRRT payable reflects the increased profitability of PRRT liable companies in 2016–17, of which oil prices (up 16%)2 were a key driver.

    The Australian dollar was nearly 4%3 higher on average over 2016–17, which would generally have a negative impact on the profitability of PRRT liable companies.

    2 The World Bank,, 2018

    3 The Reserve Bank of Australia,, 2018

      Last modified: 13 Dec 2018QC 57604