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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.

      Last modified: 10 Dec 2020QC 64354