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  • PRRT entities

    An entity holds an interest in, or in relation to, an exploration permit, retention lease or production licence if it is, or will be, entitled to receipts from the sale of petroleum recovered from the project area or from MPCs produced from that petroleum.

    An entity with an interest in an exploration permit, retention lease or production licence may have lodgment obligations.

    These obligations may include:

    • lodging instalment statements and paying PRRT instalments
    • paying PRRT and lodging PRRT returns
    • notifying us of certain choices.

    Registering for PRRT ensures that forms and payments (including refunds) are processed promptly and allows us to send entities timely information on PRRT – see Register for PRRT.

    See also:

    We are committed to helping entities understand and meet any PRRT obligations they may have. If an entity requires information, guidance or advice, it can contact us by phone or in writing.

    Contact us:

    • Phone 13 28 66 between 8.00am and 6.00pm, Monday to Friday
    • Write to

      Australian Taxation Office
      PO Box 3000
      PENRITH NSW 2740
    • Fax 1300 139 011

    Exploration permits and retention leases

    For PRRT purposes, an entity has an interest in an exploration permit or retention lease if it will be entitled to receive receipts from the sale of:

    • petroleum recovered from the permit or lease area
    • MPCs produced from that petroleum.

    An exploration permit or retention lease is not a petroleum project under PRRT and an entity is not required to lodge PRRT instalment statements or returns. It will become a petroleum project for PRRT purposes when a production licence comes into force.

    An entity with an interest in an offshore exploration permit or retention lease may choose to lodge a PRRT starting base return if the permit or lease existed before 1 July 2012.

    An entity should keep records of any assessable receipts, deductible expenditure and starting base information relating to its interest. These records will assist in determining its PRRT liability for any petroleum projects that eventuate from these permits or leases.

    Production licences

    For PRRT purposes, an entity holds an interest in, or in relation to, a petroleum project if it is entitled to receive receipts from the sale of:

    • petroleum recovered from the production licence area
    • MPCs produced from that petroleum.

    If an entity has no assessable receipts derived, that entity generally does not have a PRRT liability or any reporting obligations until it begins to derive assessable receipts in relation to the production licence. It will, however, need to keep relevant records.

    It may also consider lodging a starting base return if the interest is in an onshore petroleum project or an interest in the North West Shelf project and the interest existed before 1 July 2012.

    Entities deriving assessable receipts

    Once a petroleum project begins deriving assessable receipts from the sale of petroleum, an entity with an interest in the project generally has obligations under PRRT. It may need to register for PRRT and lodge PRRT instalment statements and PRRT returns.

    It may also choose to lodge a starting base return if the interest is in an onshore petroleum project or an interest in the North West Shelf project and the interest existed before 1 July 2012.

    PRRT applies on a project basis. Therefore, an entity needs to lodge separate PRRT instalment statements and PRRT returns for each project it has an interest in. Onshore projects and the North West Shelf project may also choose to lodge a PRRT starting base return for each of their petroleum interests.

    Combining PRRT projects

    An entity that holds an interest in two or more petroleum projects can apply to have them combined and treated as a single project for PRRT purposes, provided certain criteria are met. Applications are made to the Resources Minister and a qualifying period applies.

    Different assessment criteria are used, depending on whether the projects to be combined are offshore or onshore. An onshore project can be combined with an offshore project if the Resources Minister is satisfied the projects are sufficiently related and the onshore project did not exist before 1 July 2012. In these circumstances, the combined project is treated as an offshore project.

    An interest in the North West shelf project cannot be combined with another project.

    Consolidated groups

    A group of entities that is consolidated for income tax purposes can choose to consolidate their interests in an onshore petroleum project for PRRT purposes. Broadly, this allows a consolidated group to lodge a single PRRT return for all their interests in an onshore project.

    The consolidation rules do not apply to interests in offshore petroleum projects, including the North West Shelf project. Group members with interests in these petroleum projects have separate PRRT obligations.

    If a group of entities chooses to consolidate for PRRT purposes, the choice needs to be made in the approved form by the head company of a consolidated group or a MEC group, or the provisional head company of the MEC group. The choice needs to be lodged within 21 days of being made, or within further time allowed by the Commissioner.

    See also:

    Joint venture participants

    An entity with an interest in a project operating under a joint venture arrangement is required to meet PRRT obligations in the same manner as an entity with an interest in a non-joint venture operation. That is, each joint venture participant has separate obligations for their interest in the project. They cannot combine their PRRT obligations, such as registering for PRRT and lodging PRRT returns.

    For example, if there are two joint venture participants in a project, they would both register separately for PRRT and would also lodge separate instalment statements, PRRT returns and PRRT starting base returns.

    Contractors

    Contractors are generally paid for their services and they have no entitlement to the resources or receipts from the sale of petroleum of the petroleum project. Unless a contractor has an interest in an exploration permit, retention lease or production licence, they are not subject to PRRT.

    Register for PRRT

    Registering for PRRT allows us to send entities timely information on PRRT and also ensures that forms and payments (including refunds) are processed promptly.

    We will issue a registered entity with a unique payment reference number (PRN) to enable it to pay electronically.

    An entity should consider registering for PRRT and providing up-to-date contact details if it has an interest in any of the following:

    • an offshore or onshore exploration permit
    • an offshore or onshore retention lease
    • an offshore or onshore production licence
    • an offshore or onshore combined project
    • the North West Shelf project
    • the Bass Strait project.

    An entity with an interest in more than one project needs to register separately for each petroleum interest.

    Next step:

    Last modified: 24 Nov 2016QC 37561