{"id":"C2012A00019","name":"Petroleum Resource Rent Tax (Imposition—Customs) Act 2012","slug":"petroleum-resource-rent-tax-imposition-customs-act-2012","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"19 of 2012","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":8313,"registerId":"commonwealth-C2012A00019-current","compilationNumber":null,"startDate":"2026-03-30","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Petroleum Resource Rent Tax (Imposition—Customs) Act 2012","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\n---\n\n?xml version=\"1.0\" encoding=\"utf-8\" standalone=\"no\"?>\n\n![](image.001.png)\n\n \n\n \n\n \n\n \n\n \n\n \n\nPetroleum Resource Rent Tax (Imposition—Customs) Act 2012\n\n \n\nNo. 19, 2012\n\n \n\n \n\n \n\n \n\n \n\nAn Act to impose a tax in respect of the profits of certain petroleum projects, so far as that tax is a duty of customs\n\n \n\n \n\n \n\nContents\n\n1 Short title\n\n2 Commencement\n\n3 Incorporation\n\n4 Imposition of tax\n\n5 Rate of tax\n\n6 Act does not impose a tax on property of a State\n\n \n\n![](image.001.png)\n\n \n\n \n\nPetroleum Resource Rent Tax (Imposition—Customs) Act 2012\n\nNo. 19, 2012\n\n \n\n \n\n \n\nAn Act to impose a tax in respect of the profits of certain petroleum projects, so far as that tax is a duty of customs\n\n[Assented to 29 March 2012]\n\nThe Parliament of Australia enacts:\n\n1  Short title\n\n  This Act may be cited as the Petroleum Resource Rent Tax (Imposition—Customs) Act 2012.\n\n2  Commencement\n\n  This Act commences on 1 July 2012.\n\n3  Incorporation\n\n  The Petroleum Resource Rent Tax Assessment Act 1987 is incorporated and is to be read as one with this Act.\n\n4  Imposition of tax\n\n (1) Tax is imposed in respect of the taxable profit of a person of a year of tax in relation to a petroleum project.\n\n (2) However, this section imposes that tax only so far as it is a duty of customs within the meaning of section 55 of the Constitution.\n\n (3) This section applies in relation to the year of tax beginning on 1 July 1986 and later years of tax.\n\n5  Rate of tax\n\n  The rate of tax in respect of the taxable profit of a person of a year of tax in relation to a petroleum project is 40%.\n\n6  Act does not impose a tax on property of a State\n\n (1) This Act does not impose a tax on property of any kind belonging to a State.\n\n (2) In this section, property of any kind belonging to a State has the same meaning as in section 114 of the Constitution.\n\n[Minister’s second reading speech made in—\n\nHouse of Representatives on 2 November 2011\n\nSenate on 7 February 2012]\n\n(229/11)\n\n \n","sortOrder":0}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":2,"scope_assessment":{"changed":false,"description":"This Act remains tightly scoped to its original constitutional purpose. It has not expanded beyond its narrow function of imposing the PRRT qua customs duty. The substantive expansion of the PRRT regime (to onshore projects, coal seam gas, etc.) occurred through amendments to the incorporated Assessment Act 1987 and the parallel imposition Acts, not through expansion of this particular Act's scope."},"complexity_factors":["Extremely short: only 6 sections covering 2 pages","No defined terms in this Act itself — all substantive definitions reside in the incorporated Assessment Act","Single cross-reference: incorporation by reference of the Petroleum Resource Rent Tax Assessment Act 1987","Simple conditional logic: section 4(2) limits application to 'duties of customs' only","No nested exceptions or complex procedural requirements within this Act","Constitutional safeguard in section 6 is straightforward and mirrors section 114 of the Constitution directly"],"plain_english_summary":"This law is one of three separate Acts that together create the Petroleum Resource Rent Tax (PRRT) — a tax on profits made from extracting petroleum (oil and gas) in Australia.\n\n**What this specific Act does:**\nThis particular Act imposes the PRRT **only in situations where the tax counts as a 'duty of customs'** under the Australian Constitution. This is a technical constitutional requirement. In Australia's federal system, certain types of taxes must be imposed through specific legislative mechanisms. This Act covers the 'customs' aspect.\n\n**Key points:**\n- **Tax rate:** 40% of taxable profit from petroleum projects\n- **Who it affects:** Companies and entities making profits from petroleum extraction projects\n- **How it works:** This Act doesn't work alone — it 'incorporates' (treats as part of itself) the main **Petroleum Resource Rent Tax Assessment Act 1987**, which contains all the detailed rules about how to calculate taxable profit, what deductions are allowed, and how the tax is administered\n- **Constitutional protection:** The Act explicitly excludes state government property from taxation (section 6), protecting state assets as required by the Constitution\n\n**Why it matters:**\nThis Act is part of Australia's system for ensuring the community gets a return from the extraction of non-renewable petroleum resources. The 40% tax rate applies to 'super profits' — profits above a specified return threshold. The split into three separate imposition Acts (Customs, Excise, and General) is a constitutional technicality to ensure the tax is validly imposed regardless of how courts might characterise the nature of the tax."},"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"This Act does not materially expand the substantive scope of the Petroleum Resource Rent Tax; it performs a narrow legal function: it imposes the PRRT at a 40% rate (s4–s5) and incorporates the substantive Assessment Act (s3). The constitutional qualification (s4(2)) and the exclusion of State property (s6) constrain the tax rather than broaden it. In effect, the Act clarifies the legal basis and mechanics for imposing the PRRT (including applying it back to the 1986 tax year (s4(3))), but it does not add new categories of taxpayers or new tax bases beyond what is handled in the Assessment Act."},"complexity_factors":["Short, 6-section Act but incorporates the Petroleum Resource Rent Tax Assessment Act 1987 (s3), transferring substantial complexity to that separate statute","Constitutional qualification: tax is limited to what is a \"duty of customs\" (s4(2)), requiring interpretation of s55 of the Constitution","Reference to constitutional protection of State property (s6) and section 114 of the Constitution introduces constitutional law considerations","Temporal scope language: applies to the year of tax beginning 1 July 1986 and later (s4(3)), creating retrospective-operational framing","Clear single-rate rule (40%) keeps the headline simple (s5), but practical calculation complexity arises from incorporated Act","Cross-references: the Act's practical effect depends on many defined terms and rules in the incorporated Assessment Act, increasing indirect complexity","Modest conditionality in the text (tax imposed but only to the extent of customs duty) adds interpretive layers despite short form"],"plain_english_summary":"**What this law does, in plain language**\n\n- This Act makes the Petroleum Resource Rent Tax (PRRT) apply as a tax on the profits of people (companies or other taxpayers) from specified petroleum projects (section 4).  It sets the tax rate at 40% of taxable profit (section 5).  The Act takes effect from 1 July 2012 (section 2), and it applies to the tax year that began 1 July 1986 and later years (section 4(3)).\n\n- The Act does not itself contain the detailed rules for calculating, assessing or collecting the tax.  Instead it incorporates the Petroleum Resource Rent Tax Assessment Act 1987 and must be read together with that Act (section 3).  That incorporated Act contains the technical definitions, measurement rules, credits, assessments and administrative procedures.\n\n- The PRRT imposed by this Act is limited so it operates \"only so far as it is a duty of customs\" within the meaning of section 55 of the Constitution (section 4(2)).  The Act also expressly says it does not impose a tax on property belonging to a State, with the meaning used in section 114 of the Constitution (section 6).\n\nWho this affects\n\n- Petroleum project participants and entities that derive taxable profits from petroleum projects (see section 4).  Practically, that means upstream oil and gas companies and their project contractors and joint venture participants who are subject to the PRRT rules in the incorporated Assessment Act.\n\nWhy it matters (official stated purpose and practical implications)\n\n- Officially, the Act imposes the PRRT on the profits of petroleum projects and fixes the rate at 40% (sections 4 and 5).  By incorporating the Assessment Act (section 3) it makes the existing PRRT compliance, calculation and collection framework legally operative for these taxable profits.\n\n- Practical implications and trade-offs:\n  - Who pays: the economic incidence falls on persons (typically companies) with taxable profits from petroleum projects (s4).  The legal administration — calculation, assessment and collection procedures — is governed by the incorporated Assessment Act (s3), which is administered through the standard tax administration machinery (assessments, audits, objections, appeals).\n  - Effects on business decisions: a 40% profit-based tax raises the after-tax required return on petroleum projects, which can affect decisions on whether to invest, how to finance projects, and how to structure or time transactions.  Project operators may alter investment timing, contract terms, or capital structure in response to the tax rate and measurement rules in the Assessment Act.\n  - Costs and compliance burden: the detailed compliance, reporting and administrative burden is driven by the incorporated Petroleum Resource Rent Tax Assessment Act 1987 (s3).  PRRT calculations are typically technically complex (counts of costs, deductions, uplift rules, credits) and so impose legal/accounting costs on taxpayers and administrative costs on the tax authority.\n  - Constitutional limits and legal risk: the tax is expressly limited to what can be imposed as a duty of customs (s4(2)) and does not tax State-owned property (s6).  Those limits constrain the scope of the law and reflect legal/constitutional compliance considerations.  They may require interpretation in litigation or administrative practice, which is an implementation risk.\n\nAdministrative discretion and implementation risk\n\n- The Act itself is short and largely declarative; most administrable discretion, definitional detail and enforcement tools exist in the incorporated Assessment Act (s3).  That means outcomes depend heavily on how the Assessment Act is applied by the tax authority, interpreted by courts, and specified in guidance.\n\nNet effect (mechanics, not policy judgment)\n\n- Mechanically, this Act creates a 40% tax on taxable profits from petroleum projects (s4–s5), makes the Assessment Act the operative measurement/administration law (s3), limits the imposition to what is a duty of customs (s4(2)), and excludes State property from being taxed (s6).  It therefore changes the legal basis and enforcement setting for PRRT liabilities but relies on the Assessment Act for the substantive tax rules."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"}},"importantCases":[],"_links":{"self":"/api/acts/petroleum-resource-rent-tax-imposition-customs-act-2012","history":"/api/acts/petroleum-resource-rent-tax-imposition-customs-act-2012/history","analysis":"/api/acts/petroleum-resource-rent-tax-imposition-customs-act-2012/analysis","conflicts":"/api/acts/petroleum-resource-rent-tax-imposition-customs-act-2012/conflicts","importantCases":"/api/acts/petroleum-resource-rent-tax-imposition-customs-act-2012/important-cases","documents":"/api/acts/petroleum-resource-rent-tax-imposition-customs-act-2012/documents"}}