The Albanese Government has opened a public consultation period on new legislation designed to modernise the Petroleum Resource Rent Tax and improve anti-avoidance laws.
The push to adjust the Petroleum Resource Rent Tax legislation comes as part of the government's response to the Treasury Gas Transfer Pricing Review initiated by the former government.
“We want to ensure all big companies pay their fair share of tax, delivering a fairer return to the Australian people from the resources they own, provide certainty to industry and ensure Australia remains a reliable trade and investment partner,” Treasurer Jim Chalmers said in a statement.
The changes form part of the government’s response to the Treasury Gas Transfer Pricing Review initiated by the former government and will mean the offshore LNG industry pays more tax sooner.”
Exploration excludes feasibility studies
Part of the changes proposed would clarify the definition of exploration activities within the sector, which will exclude feasibility studies.
This would prohibit companies from claiming expenditure on feasibility studies as a tax deduction.
The amendments are also intended to tighten the treatment of mining, quarrying and prospecting rights for income tax depreciation purposes, making it more difficult for companies to hold depreciating assets simply for tax purposes.
The Treasury says these reforms will ensure the resource sector continues to be a major contributor to Australia’s economic prosperity and provide certainty to the industry.
The draft legislation is available on the Treasury’s website for feedback and consultation until February 9, 2024, with further reforms to follow in response to the Gas Transfer Pricing Review in early 2024.