The Albanese Government will consult on new legislation to modernise the Petroleum Resource Rent Tax and to strengthen anti‑avoidance laws.
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.
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.
Today we’re releasing new legislation to strengthen tax anti‑avoidance rules for the offshore resources sector. The proposed amendments to the anti‑avoidance rules in the Petroleum Resource Rent Tax Assessment Act 1987 will bring these rules in line with income tax anti‑avoidance rules.
We’re also consulting on legislation that directly address issues from the Full Federal Court’s decision in Commissioner of Taxation v Shell Energy Holdings Australia Limited [2022] FCAFC 2, announced in last year’s Budget.
The amendments will ensure PRRT and income tax legislation operate as intended by clarifying that exploration for petroleum excludes feasibility studies. The amendments also tighten the treatment of mining, quarrying and prospecting rights for income tax depreciation purposes.
The resources sector makes a substantial contribution to Australia’s national economic prosperity, including through investment, jobs, energy supply and corporate and other taxes, and these changes will ensure this continues.
The reforms will deliver a fairer return to the Australian people from the resources they own, provide certainty to industry and ensure Australia remains a reliable investment partner.
Our economic plan is all about maximising our advantages in the defining decade ahead and the resources sector will play a big role in that.
Draft legislation for consultation and feedback is available on Treasury’s website until 9 February 2024.
The Government will consult on draft legislation implementing the remaining elements of its response to the Gas Transfer Pricing Review in early 2024.
Legislation to introduce a cap on the use of PRRT deductions was introduced into Parliament on 16 November 2023. The draft regulation to better account for the business practice of ‘tolling’ in the offshore LNG sector remains open for consultation and feedback until 9 February 2024.