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PRRT entities

Find out if your entity is affected by petroleum resource rent tax (PRRT).

Last updated 27 August 2024

Who is affected

PRRT affects any entity that has an interest in either:

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

Date of effect

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provisions that relate to initial amounts of starting base expenditure and the consolidation single entity rule were repealed.

Joint venture partners and contractors

Joint venture partners have individual responsibilities and contractors normally don't have PRRT responsibilities.

Who holds an interest

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 either:

  • petroleum recovered from the project area
  • marketable petroleum commodities (MPCs) produced from that petroleum.
  • an entity with an interest in a production licence may have lodgment obligations, including:
  • lodging instalment statements and paying PRRT instalments
  • lodging, reporting and paying for PRRT
  • notifying us of certain choices.

Entities that hold an interest in an exploration permit or a retention lease are encouraged to register for PRRT. Registration allows us to send entities timely information on PRRT and ensures that forms and payments (including refunds) are processed promptly.

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 either:

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

An exploration permit or retention lease isn't a petroleum project under PRRT. Your entity isn't required to lodge PRRT instalment statements or returns in relation to them. It will become a petroleum project for PRRT purposes when a production licence comes into force.

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

Production licences

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

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

If your entity has no assessable receipts derived, your entity generally doesn't have a PRRT liability or any reporting obligations until it begins to derive assessable receipts in relation to the production licence. You will, however, need to keep relevant records.

Entities deriving assessable receipts

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

PRRT applies on a project basis. Therefore, your entity needs to lodge separate PRRT instalment statements and PRRT returns for each project it has an interest in.

Combining PRRT projects

An entity that holds an interest in 2 or more petroleum projects can apply to have them combined and treated as a single project for PRRT purposes, provided certain criteria are met. You apply to the Resources Minister and a qualifying period applies.

You can't combine an interest in the North West shelf project with another project.

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 2 joint venture participants in a project, they would both register separately for PRRT and would also lodge separate instalment statements and PRRT returns.

Contractors

If you are a contractor, you are generally paid for your services and have no entitlement to the resources or receipts from the sale of petroleum recovered from the petroleum project. Unless you have an interest in an exploration permit, retention lease or production licence, you aren't subject to PRRT.

Register for PRRT

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

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

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

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

If your entity has an interest in more than one project, you need to register separately for each petroleum interest.

More information

We are committed to helping you understand and meet any PRRT obligations your entity may have. If your entity requires information, guidance or advice, contact us by phone or in writing:

 

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