The Petroleum Resource Rent Tax (PRRT) is a tax on oil and gas projects located offshore in Australian waters. Onshore oil and gas projects pay royalties to state and territory governments instead.

PRRT is paid when a petroleum project’s total assessable receipts exceed total deductible expenditure. The point at which petroleum, or products produced from petroleum, becomes taxable is commonly referred to as the taxing point. The taxing point signifies the boundary between petroleum project operations, which fall within PRRT, and non-project operations, which do not.

This review consulted extensively with LNG industry participants and other interested parties over several years and processes, beginning with the Callaghan Review. Industry has largely maintained its position that no changes should be made to the existing GTP rules, arguing that the PRRT is operating as intended in its application to LNG and that current settings are the best fit for future LNG developments involving brownfield expansion and backfill projects. Industry highlighted that the current GTP rules, which resulted from a co-design process between government and industry participants that ran from the mid-1990s to the early 2000s, remain fit for purpose, as do the principles and assumptions that underpinned them.

Treasury considers the proposed changes should apply to all projects as soon as is practical, subject to detailed design of new law.