{"id":"C2012A00020","name":"Petroleum Resource Rent Tax (Imposition—Excise) Act 2012","slug":"petroleum-resource-rent-tax-imposition-excise-act-2012","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"20 of 2012","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":8322,"registerId":"commonwealth-C2012A00020-current","compilationNumber":null,"startDate":"2026-03-30","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Petroleum Resource Rent Tax (Imposition—Excise) 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—Excise) Act 2012\n\n \n\nNo. 20, 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 excise\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—Excise) Act 2012\n\nNo. 20, 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 excise\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—Excise) 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 excise 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(232/11)\n\n \n","sortOrder":0}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":2,"scope_assessment":{"changed":false,"description":"This is a foundational imposition Act that has remained narrow and purpose-built since enactment. It does exactly what its title and long title suggest: imposes the PRRT as an excise duty. The scope has not expanded beyond this specific constitutional mechanism for imposing the tax."},"complexity_factors":["Extremely short: only 6 sections","No defined terms in this Act itself — relies entirely on the incorporated Assessment Act for definitions","Single cross-reference: incorporates the Petroleum Resource Rent Tax Assessment Act 1987 by reference","Simple conditional logic: only one substantive limitation (section 4(2) — only applies so far as it is a duty of excise)","No nested exceptions or complex procedural requirements","Straightforward rate: flat 40% with no tiers or conditions"],"plain_english_summary":"This law is one of three pieces of legislation that together create the Petroleum Resource Rent Tax (PRRT) — a tax on profits made from extracting petroleum resources in Australia.\n\n**What this specific law does:**\nThis particular Act is the \"excise\" version of the tax imposition. It imposes a **40% tax** on the **taxable profits** of petroleum projects (like oil and gas extraction), but **only to the extent that the tax counts as a duty of excise** under the Australian Constitution.\n\n**Why there are multiple imposition Acts:**\nAustralia's Constitution (section 55) requires that laws imposing taxes must only deal with one type of tax at a time. Because the PRRT could potentially be characterised as different constitutional types of tax, Parliament passed three separate imposition Acts to cover all bases:\n- This one (excise)\n- One for customs duties\n- One for general taxation\n\n**Who it affects:**\n- Companies and entities running petroleum projects in Australia\n- Does **not** apply to property belonging to a State government (protected by section 114 of the Constitution)\n\n**Key technical detail:**\nThis Act works together with the **Petroleum Resource Rent Tax Assessment Act 1987**, which contains the detailed rules for calculating what counts as \"taxable profit.\" This Act simply says \"the tax exists, it's 40%, and it's imposed as an excise.\""},"flash_summary":{"complexity_score":3,"scope_assessment":{"changed":false,"description":"This Act is primarily a concise, technical enactment that imposes the petroleum resource rent tax and fixes its rate while incorporating the substantive PRRT Assessment Act 1987. It does not introduce new categories of taxable activity or broader policy beyond restating and framing the PRRT in a form that highlights constitutional limits (\"only so far as\" a duty of excise) and confirms the exclusion of State property. The principal substantive detail and compliance regime remain in the incorporated 1987 Assessment Act, so the Act does not represent a significant expansion beyond the PRRT regime's original purpose; it is best read as a codifying/clarifying instrument rather than a scope‑expanding amendment. The only notable scope feature is the explicit temporal application to tax years from 1 July 1986, which clarifies retrospective coverage but does not, by itself, broaden the types of tax liability addressed."},"complexity_factors":["Very short Act: 6 sections (titles, commencement, incorporation, imposition, rate, State property exemption).","Incorporation of the Petroleum Resource Rent Tax Assessment Act 1987 (Section 3) transfers extensive substantive detail (definitions, computation, procedural rules) out of this short Act and into the incorporated Act.","Constitutional qualification: the imposition applies \"only so far as\" it is a duty of excise under section 55 of the Constitution (Section 4(2)), which creates interpretive and litigation complexity.","Temporal scope: the imposition is expressed to apply from tax years beginning 1 July 1986 onward (Section 4(3)), creating potential retrospective assessment issues.","Single fixed substantive parameter: the tax rate is a straightforward 40% (Section 5), which simplifies the arithmetic but not the underlying profit calculations.","Cross-reference to section 114 of the Constitution for the meaning of \"property of a State\" (Section 6(2))."],"plain_english_summary":"**What this law does (mechanics)\n\n- Imposes a tax on the taxable profits from specified petroleum projects. (Section 4.)\n- Sets the tax rate at 40% of those taxable profits. (Section 5.)\n- Requires that the detailed rules for calculating taxable profit are read together with the Petroleum Resource Rent Tax Assessment Act 1987 (that earlier Act is incorporated into this Act). (Section 3.)\n- Limits the operation of the imposition so that it only applies to the extent the tax is a \"duty of excise\" under section 55 of the Constitution — in other words, it is expressed to operate only where that form of taxation is constitutionally available. (Section 4(2).)\n- Does not apply to property that belongs to an Australian State (it adopts the constitutional meaning of \"property of a State\"). (Section 6.)\n- Commences on 1 July 2012, but specifies it applies to tax years beginning 1 July 1986 and later. (Sections 2 and 4(3).)\n\n\nWho this affects\n\n- Companies or other entities that participate in petroleum projects and who realise taxable profits under the rules in the incorporated PRRT Assessment Act 1987 are the parties that pay the tax (the Act itself speaks of \"a person\" with a \"taxable profit\"). (Sections 3 and 4.)\n- The Commissioner of Taxation and the Australian tax administration will apply the incorporated assessment and collection rules from the PRRT Assessment Act 1987 when administering the 40% charge. (Section 3.)\n- State governments receive protection from having their property taxed under this Act because it excludes \"property of a State.\" (Section 6.)\n\n\nWhy it matters (purpose claims and operational implications)\n\n- The official form of the Act is to impose the petroleum resource rent tax (PRRT) as a tax on profits from relevant petroleum projects and to state its rate (sides of the tax machinery are in the incorporated Assessment Act). (Sections 3–5.)\n- The Act explicitly ties the imposition to the category of \"duty of excise\" to reflect constitutional limits on how the Commonwealth may impose such charges (the Act refers to section 55 of the Constitution). (Section 4(2).)\n\n\nPractical effects, costs and incentives\n\n- Who pays: participants in taxable petroleum projects directly pay the tax on their taxable profits as calculated under the incorporated PRRT Assessment Act. (Sections 3–5.)\n- Revenue and distribution: the charge takes 40% of taxable profit as tax revenue to the Commonwealth; the immediate burden falls on project participants. Any pass-through of costs (for example, higher prices) depends on market structure and contracts in the petroleum supply chain. (Section 5.)\n- Investment incentives: a 40% tax on taxable profit changes project after‑tax returns, which can affect decisions on development, production, financing and contractual arrangements. Firms may respond by altering investment timing, cost structures, transfer pricing, or project structure to optimise after‑tax returns. (Section 5 and incorporation of the Assessment Act for computation details.)\n- Compliance burden: the Act itself is short, but it incorporates the substantive PRRT Assessment Act 1987. The calculation of \"taxable profit\" and the procedural rules for assessment, objections and refunds are in that incorporated Act, so compliance depends heavily on those detailed rules. (Section 3.)\n- Legal and constitutional risk: by limiting the imposition to the extent it is a duty of excise, the Act leaves some room for legal challenge about whether particular applications are constitutionally valid. That creates uncertainty until courts interpret whether particular PRRT applications fall within the \"duty of excise\" concept. (Section 4(2).)\n- Retroactivity: the Act states it applies to tax years beginning 1 July 1986 and later. That extends the temporal reach (or at least states the historic effective date), which can affect assessments for past years; the practical effect depends on how the incorporated Assessment Act treats earlier years. (Section 4(3).)\n- Limits on States: the Act confirms that it will not impose tax on State property, mirroring the constitutional protection for State property. This narrows the universe of taxable items the Commonwealth can reach under the Act. (Section 6.)\n\n\nImplementation and decision‑making\n\n- What Parliament sets: the Act fixes the statutory imposition and the rate (40%). (Sections 4–5.)\n- What administrators do: the Commissioner of Taxation applies the incorporated PRRT Assessment Act 1987 rules to compute taxable profit and carry out assessments, collections and reviews. (Section 3.)\n\n\nTrade‑offs and risks to watch\n\n- Concentrated vs diffuse effects: the fiscal benefit (Commonwealth revenue) is concentrated in budget receipts; the costs are concentrated on petroleum project participants but may be partly diffuse if consumers ultimately face higher energy prices. (Sections 4–5.)\n- Compliance and complexity are largely transplanted into the Assessment Act; users must evaluate that longer, technical Act for practical compliance costs. (Section 3.)\n- Constitutional uncertainty: the \"only so far as\" clause narrows the statutory imposition to the constitutionally permissible content, but that creates room for litigation about the constitutional character of particular applications under the PRRT framework. (Section 4(2).)\n\n\nKey sections to read for detail: Section 3 (incorporation of the Assessment Act), Section 4 (imposition and constitutional limit), Section 5 (rate), Section 6 (State property exemption).\n"},"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-excise-act-2012","history":"/api/acts/petroleum-resource-rent-tax-imposition-excise-act-2012/history","analysis":"/api/acts/petroleum-resource-rent-tax-imposition-excise-act-2012/analysis","conflicts":"/api/acts/petroleum-resource-rent-tax-imposition-excise-act-2012/conflicts","importantCases":"/api/acts/petroleum-resource-rent-tax-imposition-excise-act-2012/important-cases","documents":"/api/acts/petroleum-resource-rent-tax-imposition-excise-act-2012/documents"}}