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Commonwealth act
This is the main law governing Petroleum Resource Rent Tax (PRRT) — a special profits-based tax on companies that extract oil and gas from Australian offshore areas (and some onshore areas like oil shale).
Think of PRRT like this: instead of taxing a company just for extracting petroleum, the government waits until the company has made a genuine profit above a threshold return, then taxes that profit. This section of the Act (Parts I–IV) lays the groundwork by:
Defining everything — what counts as 'petroleum' (including oil shale), what a 'petroleum project' is, what 'marketable petroleum commodities' are (like crude oil, sales gas, condensate, LPG, ethane), and dozens of other technical terms needed to apply the tax correctly.
Identifying which projects get taxed — A 'petroleum project' is defined around production licences (legal rights to extract oil/gas). Special rules apply to major projects like and the , which are treated as single projects regardless of how many individual licences they hold.
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Direct links to the current provisions in Petroleum Resource Rent Tax Assessment Act 1987.
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View on official registerSourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Allowing projects to be combined — The Resources Minister can issue a 'project combination certificate' merging multiple projects into one for tax purposes, if they're sufficiently related. This affects how costs and revenues are pooled.
Setting up economic adjustment mechanisms — Including a GDP-based inflation factor to adjust expenditure thresholds, and long-term bond rates used to calculate the minimum return companies must earn before PRRT kicks in.
Handling corporate group structures — Special rules determine when related companies count as a single group for tax purposes, preventing companies from splitting up to avoid tax.
Addressing international and currency matters — Foreign currency amounts must be converted to Australian dollars; the law applies outside Australia's borders.
PRRT is meant to ensure that companies making super-profits from Australia's publicly-owned natural resources pay a fair share back to the community. The detailed definitions and rules in this Act determine exactly when, how much, and on what basis that happens. Controversially, the design of the system (including generous deductions and uplift rates) has meant many large projects have paid little or no PRRT for many years.