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  • Petroleum resource rent tax (PRRT)

    The petroleum resource rent tax (PRRT) is a tax generally on profits generated from the sale of marketable petroleum commodities (MPCs).

    MPCs include:

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

    PRRT has applied to offshore petroleum projects (except for the North West Shelf project and the Joint Petroleum Development Area) since 1987. The Bass Strait project has been subject to PRRT since 1990.

    From 1 July 2012, the PRRT regime applies to onshore petroleum projects and the North West Shelf project but not to the Joint Petroleum Development Area in the Timor Sea.

    As a result, coal seam gas extracted as a necessary incident of mining coal – including underground coal gasification – was not subject to PRRT but was a 'taxable resource' for Minerals Resource Rent Tax (MRRT) purposes.

    However, with the repeal of the MRRT from 1 September 2014, these 'taxable resources' would potentially be subject to PRRT. As some entities only recover coal seam gas as an unavoidable incident of coal mining activities, receipts derived from these incidental activities are not subject to PRRT.

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    Last modified: 24 Nov 2016QC 17230