When is PRRT payable
The petroleum resource rent tax (PRRT) taxes profits generated from the sale of marketable petroleum commodities above a specified rate of return. PRRT is paid when a petroleum project’s total assessable receipts exceed total eligible expenditure.
Total PRRT payable
There are 16 entities in the 2023–24 PRRT transparency population, with total PRRT payable of $1,483.3 million. The number of entities paying PRRT has increased from the previous year due to the commencement of the PRRT deductions cap which resulted in 5 new PRRT payers.
The deductions cap limits the amount of deductible expenditure available to offset assessable receipts in a year of tax for a liquefied natural gas (LNG) project. When the deductions cap applies, the entity will be taken to have a taxable profit of 10% of the assessable receipts they derived in years where deductions might otherwise have reduced their PRRT payable to zero.
Figure 15: Number of entities that paid PRRT over 10 years
In 2023–24, the profitability of PRRT-liable companies declined due to a range of factors, including lower oil prices, decreasing production in longstanding projects and increased costs. This is reflected in PRRT payable decreasing in 2023–24.
Figure 16 below shows that the annual PRRT collections are highly correlated to the price of oil. The oil price is sensitive to developments in the global energy market. For example, the 2021–22 result is primarily attributed to energy prices reacting to market volatility created by the Russian invasion of Ukraine.
Figure 16: PRRT payable versus West Texas Intermediate (WTI) and Brent oil price over 10 years