Petroleum Resource Rent Tax Assessment Act 1987

PART V - LIABILITY TO TAXATION  

Division 1 - Liability to tax on taxable profit  

SECTION 22   TAXABLE PROFIT  

22(1)    
Where, in relation to a petroleum project and a year of tax, the assessable receipts derived by a person exceed the sum of:

(a)    the deductible expenditure incurred by the person; and

(b)    the total of the amounts (if any) transferred by the person to the project in relation to the year of tax under section 45A ; and

(c)    the total of the amounts (if any) transferred by another person to the person in relation to the project and the year of tax under section 45B ;

the person is taken for the purposes of this Act to have a taxable profit in relation to the project and the year of tax of an amount equal to the excess.

Note:

because of subsection 45D(2) , some transfers of expenditure are taken to be transfers of amounts compounded in accordance with Part 7 of Schedule 1 .

Allowing for Greater Sunrise apportionments

22(2)    

However, if the petroleum project is a Greater Sunrise project, the person is taken for the purposes of this Act to have a taxable profit in relation to the project and the year of tax of an amount worked out using the following formula:

Initial taxable profit × Apportionment percentage figure

100

where:

apportionment percentage figure
has the meaning given by subsection 2C(2) .

initial taxable profit
means the amount of taxable profit worked out under subsection (1) ignoring this subsection.

Deemed taxable profit for certain liquefied natural gas projects

22(3)    

If:

(a)    a person derives assessable petroleum receipts or assessable tolling receipts in relation to a petroleum project in a year of tax; and

(b)    sales gas is, or will be, produced from some or all of the petroleum that is, or will be, recovered from the project; and

(c)    the person is a party to an arrangement (within the meaning of section 50 ); and

(d)    it is intended, as a result of carrying out the arrangement, that sales gas (which may or may not be the sales gas mentioned in paragraph (b) ) is to be wholly or primarily processed into liquefied natural gas; and

(e)    the person enters, or will enter, into such arrangements on a regular or consistent basis; and

(f)    the person is not taken under subsection (1) or (2) to have a taxable profit in relation to the project and the year of tax; and

(g)    the project is not excluded under subsection (5) for the year of tax;

the person is taken for the purposes of this Act to have a taxable profit in relation to the project and the year of tax of an amount (the denied deduction amount ) equal to 10% of the assessable receipts derived by the person in relation to the project in the year of tax.

22(4)    

However, if the project is a Greater Sunrise project, the person is taken for the purposes of this Act to have a taxable profit in relation to the project and the year of tax of an amount (the denied deduction amount ) worked out using the following formula:

Initial taxable profit × Apportionment percentage figure

100

where:

apportionment percentage figure
has the meaning given by subsection 2C(2) .

initial taxable profit
means the amount of taxable profit worked out under subsection (3) ignoring this subsection.

22(5)    

For the purposes of paragraph (3)(g) , a project is excluded for a year of tax if:

(a)    the year of tax is the first financial year in which assessable petroleum receipts are derived by the person in relation to the project or one of the subsequent 7 financial years; or

(b)    the person incurs resource tax expenditure or starting base expenditure in the year of tax in relation to the project; or

(c)    the person is not taken to incur any amounts under subsection 33(3) , 34(3) , 34A(4) , 35(3) , 35C(5) , 35E(3) , 35F(2) or 36(1) (including because of section 48 or 48A ) in relation to the project:

(i) on the first day of the year of tax; or

(ii) on the first day of a previous year of tax (other than the first year of tax in which the person incurred deductible expenditure in relation to the project).