{"id":"C2012A00021","name":"Petroleum Resource Rent Tax (Imposition—General) Act 2012","slug":"petroleum-resource-rent-tax-imposition-general-act-2012","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"21 of 2012","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":8330,"registerId":"commonwealth-C2012A00021-current","compilationNumber":null,"startDate":"2026-03-30","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Petroleum Resource Rent Tax (Imposition—General) 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—General) Act 2012\n\n \n\nNo. 21, 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 neither a duty of customs nor 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—General) Act 2012\n\nNo. 21, 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 neither a duty of customs nor 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—General) 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 neither a duty of customs nor 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(228/11)\n\n \n","sortOrder":0}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":2,"scope_assessment":{"changed":false,"description":"This is a standard imposition Act with a narrow, specific purpose: to impose the tax at a fixed rate while avoiding constitutional issues. It has not expanded beyond its original intent of serving as the taxing mechanism companion to the Assessment Act."},"complexity_factors":["Only 6 sections total","No defined terms in the Act itself (relies entirely on the incorporated Assessment Act for definitions)","Single straightforward rate (40%) with no conditions or tiers","Minimal conditional logic (only one exception in section 4(2) regarding constitutional limitations)","Heavy reliance on incorporation by reference to the Petroleum Resource Rent Tax Assessment Act 1987 for substantive content"],"plain_english_summary":"This law creates a 40% tax on profits from certain petroleum (oil and gas) projects in Australia. It works together with the Petroleum Resource Rent Tax Assessment Act 1987, which contains the detailed rules about how to calculate those profits. The tax applies to years starting from 1 July 1986 onwards. Importantly, the law is carefully worded to avoid being classified as a customs duty or excise tax (types of taxes that the Constitution restricts), and it explicitly protects state government property from being taxed."},"flash_summary":{"complexity_score":3,"scope_assessment":{"changed":false,"description":"This Act is narrowly focused: it imposes the PRRT, sets the headline 40% rate, specifies temporal scope (from 1 July 1986) and incorporates the 1987 Assessment Act for the detailed rules. It does not materially expand the categories of taxpayers or the tax base within its text; the substantive scope and measurement are delegated to the incorporated Assessment Act. The only notable scope feature is the retrospective temporal reach to 1 July 1986 (section 4(3)), but that appears intended to align the imposition with the policy framing of the PRRT rather than to broaden the law beyond its original purpose. Therefore, the Act has not grown significantly beyond its original, narrowly defined purpose of imposing the PRRT."},"complexity_factors":["Very short instrument (6 sections)","Incorporates the Petroleum Resource Rent Tax Assessment Act 1987 (section 3) — detailed definitions and calculation rules live in that other Act","Clear headline rule with a single tax rate (40%) (section 5)","Temporal cross‑reference: applies to years of tax from 1 July 1986 (section 4(3)) — retrospective/timing effect increases legal complexity","Two constitutional cross‑references: limits to avoid being an excise/customs duty (section 4(2), referencing Constitution s55) and exclusion of State property (section 6, referencing Constitution s114)","Practical complexity arises from reliance on external Act rather than from internal conditional logic (few internal defined terms or nested exceptions in this Act)"],"plain_english_summary":"**What this law does (mechanically)**\n\n- The Act imposes a tax called the Petroleum Resource Rent Tax (PRRT) on the taxable profit derived from specified petroleum projects (section 4(1)).\n- The detailed rules for calculating who is liable and how taxable profit is measured are not in this short Act; they are found in the Petroleum Resource Rent Tax Assessment Act 1987, which this Act incorporates and must be read with it (section 3).\n- The tax rate is 40% of taxable profit (section 5).\n- The tax applies to years of tax beginning 1 July 1986 and later (section 4(3)).\n- The Act expressly limits the tax so it does not operate as a duty of customs or excise under the Constitution (section 4(2)).\n- The Act also states it does not impose a tax on property belonging to a State (section 6), using the constitutional meaning of “property of any kind belonging to a State” (section 6(2) referencing Constitution s114).\n- The Act commenced on 1 July 2012 (section 2).\n\n**Who it affects**\n\n- Companies or other persons involved in a petroleum project who have a taxable profit under the PRRT rules in the 1987 Assessment Act. Those persons are the taxpayers who will pay the 40% PRRT on taxable profit (sections 3–5).\n- Commonwealth revenue authorities: the tax will be administered under the incorporated Assessment Act (see section 3).\n- States are explicitly protected from this Act taxing their property (section 6).\n\n**Why it matters (practical consequences and mechanics)**\n\n- Revenue and distribution: the law creates a concentrated revenue stream for the Commonwealth from profitable petroleum projects by charging 40% of taxable profit. The benefit (tax receipts) is concentrated to the Commonwealth; the immediate cost is borne by the project participants.\n- Investment and contract effects: by raising the effective tax on profits from petroleum projects, the law reduces after‑tax returns to participants and therefore changes incentives for exploration, development or the structuring of projects (the Act sets the headline rate; precise incentives depend on the measurement rules in the incorporated 1987 Assessment Act).\n- Compliance and administration: calculation, assessment, timing and compliance obligations come from the incorporated Assessment Act. The short imposition Act therefore relies heavily on that body of detailed tax administration law (section 3). That produces administrative work for taxpayers and the Australian Taxation Office (or other administering body) under the 1987 Act.\n- Legal boundary and constitutional risk: the Act explicitly limits the charge so that it is not an excise or customs duty (section 4(2)) and excludes State property from being taxed (section 6). These provisions clarify constitutional boundaries but also signal potential legal issues if the tax were characterised by a court as an excise or as impinging on State property rights.\n\n**How it works in practice (who pays, who decides, and how behaviour changes)**\n\n- Who pays: the persons whose taxable profit from a petroleum project is determined under the PRRT Assessment Act 1987.\n- Who decides and administers: the assessment rules and administration are carried out under the 1987 Act (incorporated by section 3); that Act sets definitions, calculation methods, allowable deductions, timing and enforcement.\n- Behavioural effect: because the Act taxes taxable profit at 40%, project participants face lower post‑tax returns, which can affect decisions about investment, project timing, cost control, contract negotiations and financing. Some of these effects will be mitigated or amplified by the detailed profit measurement and relief rules in the 1987 Assessment Act.\n\n**Trade‑offs, costs and implementation risks (brief testing of claimed purpose)**\n\n- Cost and incidence: the direct economic cost falls on the owners/participants of petroleum projects in the form of higher tax liabilities (section 4–5). Depending on market structure, some economic incidence may be shifted (e.g. to contractors or consumers) but that depends on specific market conditions.\n- Administrative burden: reliance on the 1987 Assessment Act concentrates the legal and compliance complexity there — taxpayers must apply the incorporated assessment rules to calculate the 40% charge (section 3).\n- Constitutional limits and litigation risk: the Act’s express qualifications (not an excise/customs duty (s4(2)); not a tax on State property (s6)) indicate attention to constitutional limits; parties could still litigate characterisation disputes which pose implementation risk.\n- Concentrated benefits, diffuse costs: the revenue is concentrated to the Commonwealth; costs are borne by project participants. Any advantage to particular taxpayers (for example, by how taxable profit is measured in the Assessment Act) would be realised through the incorporated measures rather than this short imposition Act (see section 3).\n\n**Key sections to read for details**\n\n- Section 3 (incorporation of Petroleum Resource Rent Tax Assessment Act 1987) — the heavy detail is there.\n- Section 4 (imposition and temporal scope) — who is taxed and from when.\n- Section 5 (rate — 40%).\n- Section 6 (no tax on State property).\n\n(Statements about likely economic effects and risks above are mechanistic: they follow from the tax being a 40% charge on taxable profit and from the Act’s reliance on the Assessment Act. The text of this Act does not itself set out deductions, thresholds or exemptions — those appear in the incorporated 1987 Act.)"},"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-general-act-2012","history":"/api/acts/petroleum-resource-rent-tax-imposition-general-act-2012/history","analysis":"/api/acts/petroleum-resource-rent-tax-imposition-general-act-2012/analysis","conflicts":"/api/acts/petroleum-resource-rent-tax-imposition-general-act-2012/conflicts","importantCases":"/api/acts/petroleum-resource-rent-tax-imposition-general-act-2012/important-cases","documents":"/api/acts/petroleum-resource-rent-tax-imposition-general-act-2012/documents"}}