The 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.
In 2012, the PRRT regime was applied to onshore petroleum projects and the North West Shelf project but not to the Joint Petroleum Development Area.
From 1 July 2019, onshore petroleum projects were removed from the scope of the PRRT. As a result, provisions that relate to initial amounts of starting base expenditure and the consolidation single entity rule were repealed.
In addition, new uplift rates also apply to certain categories of carried-forward expenditure during this period.
On 7 May 2023, the government announced changes to the PRRT. The changes respond to the Treasury Gas Transfer Pricing (GTP) Review.
From 1 July 2023, a deductions cap may apply in relation to a petroleum project for a year of tax. If the deductions cap applies, you will be taken to have a taxable profit of 10% of the assessable receipts you derived in relation to the project in the year of tax.