Petroleum Resource Rent Tax Assessment Regulations 2024

PART 4 - THE RESIDUAL PRICING METHOD  

Division 3 - Allocating capital costs to years of tax  

SECTION 44   CAPITAL COSTS INCURRED BEFORE THE PRODUCTION YEAR - PROJECT SALES GAS PRODUCED FIRST  

44(1)    
For the purposes of step 9 of the residual pricing method, this section applies to an included capital cost for the taxpayer if:

(a)    the included capital cost is incurred before the production year; and

(b)    the MPC production year for the operation, if any, is not before the production year; and

(c)    the capital cost is not included under subsection 35(10) .

44(2)    
The included capital cost:

(a)    is augmented for the number of calendar years between the start date for the included capital cost and the production date; and

(b)    is taken to be incurred in the production year.

Note 1:

The start date for the included capital cost may have been affected:

  • (a) by subsection 43(2) , if that subsection applied to the cost; or
  • (b) by subsection 41(2) , if subsection 43(2) did not apply to the cost and an election was made under section 54 .

    • The amount of the cost may also have been affected by subsection 43(2) , if that subsection applied to the cost.

    Note 2:

    The steps of the method work sequentially. So, (assuming this subsection applies to the cost) the next applicable step or provision that refers to the cost will be referring to:

  • (a) the cost as augmented under this subsection; and
  • (b) a start date for the cost of 1 January in the production year.


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