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House of Representatives

Petroleum Resource Rent Legislation Amendment Bill 1991

Petroleum Resource Rent Legislation Amendment Act 1991

Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon. P.J. Keating, M.P.)

Index

Part 1- Preliminary
Clause / Schedule Section (A)mended (I)nserted (R)epealed Subject EM Page
1 - - Short Title of Act *
2 - - Commencement Date #

Part 2 - Amendments of the Petroleum Resource Rent Tax Assessment Act 1987
Clause/ Schedule Section (A)mended (I)nserted (R)epealed Subject EM Page
3 - - Principal Act *
4(a)-(d) 2 A Amend definitions -
. "eligible production licence"; 14,15
. "year of tax
. "lease derived production licence"; and 59
. "permit derived production licence"
(e) 2 R Omit - "excluded exploration permit"
(f) 2 I Include definitions for -
. "applicable commencement date" 15
. "Bass Strait exploration permit" 14
. "Bass Strait project" 15
. "Company" 72
. "GDP factor"
. "North West Shelf exportation permits" 14
. "transferable exploration expenditure" 69
5 2A I GDP factor
2B I Group Companies 72
6 4(2) I Relationship between licences, permits and leases etc. 59
7 19 A Petroleum Project 14,15
19(1A) I Petroleum Project 14,15
19(2A) I Petroleum Project 14,15
8 22 I Substitution of new section - Taxable Profit 35
9 31(f) & (g) A Time of derivation of receipts 15
10 31A I Eligible real expenditure and the Bass Strait Project 16
11 32(a)-(g) A Deductible expenditure 36
12(a)-(c) 33 A Class 1 augmented bond rate general expenditure 28
12(d) 33(4) I Definition- "class 1 general project expenditure" 28
13(a)-(c) 34 A Class 1 augmented bond rate exploration expenditure 37
13(d) 34(4) I definition- "class 1 exploration expenditure" 37
14 34A I Class 2 augmented bond rate general expenditure 28
15(a)-(e) 35(1)-(3) A Class 1 GDP factor expenditure 39
15(f) 35(4)-(7) A Class 1 GDP factor expenditure 39
16 35A I Class 2 augmented bond rate exploration expenditure 38, 50
35B I Class 2 GDP factor expenditure 40, 41
17 36 A Class 1 augmented bond rate exploration and class 1 GDP factor expenditures in relation to project groups 41
18 45 R Repeal of existing section 15,16
I Time of incurring expenditure
19 DIV 3A I Transfer of exploration expenditure incurred on or after 1 July 1990
45A I Transfer of expenditure - general 42, 69
45B I Transfer of expenditure - group companies 42, 72
45C I Commissioner's powers to make transfers of expenditure 73
45D I Effect of transfer of expenditure 60, 70, 74, 78
20 64 A Amendment of Assessments 74
21 97 A Notional tax amount 43
22 - I Addition of a Schedule (as detailed below)

Schedule: Provisions Relating to Incurring and Transfer of Exploration Expenditure on or after 1 July 1990
Part 1- Interpretation
Clause/ Schedule Section (A)mended (I)nserted (R)epealed Subject EM Page
Clause 1 I Defined Terms 49
Clause 2 I Holding an Interest - Petroleum Project 50, 70
Clause 3 I Holding an interest - Exploration right 70
Clause 4 I Amounts to be worked out to the nearest dollar *

Part 2 - Class 2 Augmented Bond Rate Exploration Expenditure and Transferable Exploration Expenditure
Clause/ Schedule Section (A)mended (I)nserted (R)epealed Subject EM Page
Clause 5 I Interpretation 48
Clause 6 I Matters dealt with in this Part 47
Clause 7 I What happens if there is no notional taxable profit 49
Clause 8 I What happens if there is a notional taxable profit 51 - 56

Part 3 - Class 2 GDP Factor Expenditure and Transferable Exploration Expenditure
Clause/ Schedule Section (A)mended (I)nserted (R)epealed Subject EM Page
Clause 9 I Interpretation 56
Clause 10 I Matters dealt with in this Part 47
Clause 11 I What happens if there is no notional taxable profit 57
Clause 12 I What happens if there is a notional taxable profits 57

Part 4 - Transferable Exploration Expenditure Not Included in Relation to a Project
Clause/ Schedule Section (A)mended (I)nserted (R)epealed Subject EM Page
Clause 13 I Matters dealt with in this Part 59
Clause 14 I Assumptions on which amount to be worked out 59
Clause 15 I Non-transferable expenditure 60-64
Clause 16 I Amounts to be worked out 60
Clause 17 I What happens if the notional assessable receipts equal or exceed the notional deductible expenditure 60
Clause 18 I What happens if the notional deductible expenditure exceeds the notional assessable receipts 60, 61, 64

Part 5 - General Rules Relating to Transfer of Exploration Expenditure
Clause/ Schedule Section (A)mended (I)nserted (R)epealed Subject EM Page
Clause 19 I Interpretation 69
Clause 20 I Matters dealt with in this Part 69
Clause 21 I Rule - must be a notional taxable profit in relation to receiving project 69
Clause 22 I Rule - person must have held interests in relation to transferring entity and receiving project 70, 71
Clause 23 I Rule - transfer to project with most recent production licence 71, 75
Clause 24 I Rule - restriction on transfer of ABR expenditure 69, 71, 76
Clause 25 I Rule - restriction on transfer of GDP expenditure 71, 76
Clause 26 I Rule-total transferred not to exceed notional taxable profit 77

Part 6 - Rules Relating to Transfer of Exploration Expenditure between Group Companies
Clause/ Schedule Section (A)mended (I)nserted (R)epealed Subject EM Page
Clause 27 I Interpretation 73
Clause 28 I Situation to which this Part applies 77, 78
Clause 29 I Matters dealt with in this Part 73
Clause 30 I Rule - must be a notional taxable profit in relation to receiving company and receiving project 73
Clause 31 I Rule - loss company and profit company to have held interests and been group companies 73
Clause 32 I Rule - transfer to project with most recent production licence 78
Clause 33 I Rule - restriction on transfer of ABR expenditure 73
Clause 34 I Rule - restriction on transfer of GDP expenditure 73
Clause 35 I Rule - total transferred not to exceed notional taxable profit 79

Part 7 - Compounding of Transferred Amounts
Clause/ Schedule Section (A)mended (I)nserted (R)epealed Subject EM Page
Clause 36 I Matters dealt with in this Part
Clause 37 I What happens if expenditure was incurred in an ABR expenditure year 78, 80, 81
Clause 38 I What happens if expenditure was incurred in a GDP expenditure year 79

Part 3 - Amendments of the Excise Act 1901
Clause/ Schedule Section (A)mended (I)nserted (R)epealed Subject EM Page
23 - - Principal Act *
24 58 A Entry for home consumption etc. 85
25 78B R Repeal of Section 85

Part 4 - Amendments of the Excise Tariff Act 1921
Clause/ Schedule Section (A)mended (I)nserted (R)epealed Subject EM Page
26 - - Principal Act *
27(a) 3(1) A Omit definition of "excepted area 86
27(b) 3(1) I Include definition of "Resource Rent Tax area" 86
28 5B A Petroleum 86
29 Sub-items 17(A),(B) & (C) A Schedule to the Act - Omit "an excepted area" and substitute "a Resource Rent Tax area" 86

Part 5 - Amendment of the Petroleum (Submerged Lands)(Royalty) Act 1967
Clause/ Schedule Section (A)mended (I)nserted (R)epealed Subject EM Page
30 - - Principal Act *
31 4A I Application of the Act Repeal of former sections and substitution of new sections 89

Part 6 - Transitional and Application Provisions
Clause/ Schedule Section (A)mended (I)nserted (R)epealed Subject EM Page
32 - - Definitions: 22
. "Bass Strait area"
. "Bass Strait excise payment"
. "Bass Strait royalty payment"
. "creditable amount"
. "transitional year"
PRRT Act
33 various - - application of amendments 15
34 - - - Bass Strait excise and Royalty payments 16
35 - - - Collection by instalments does not apply to the Bass Strait project and the financial year starting on 1 July 1990 23
36 - - - Instalments paid or payable before commencement not to be recalculated 43
37 - - Excise Acts - amendments apply to petroleum recovered after the commencement 86
Royalty Act:
38 - - - amendments apply to petroleum recovered after the commencement 90
39 - - - refund of overpayments of royalty on Bass Strait petroleum recovered before 1 July 1990 90
Petroleum (Submerged Lands) Act:
40 - - - circumstances where Victoria is to refund overpayments in respect of Bass Strait Petroleum 91
41 - - Application of creditable amounts against tax liabilities 23
42 - - Effect of allowing credit or refund on liability to pay royalty or excise etc. 23, 91
43 - - Reduction of Income Tax deductions for PRRT payments 24

Note:

•
References to Principal Act or minor technical/consequential amendments only; not specifically mentioned in the Explanatory Memorandum
#
Mentioned in the relevant chapters


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