Obligations for PRRT Entities
Under the petroleum resource rent tax, an entity may have a lodgment, reporting, and payment obligation with an interest in a petroleum project. For instance, an entity is required to file quarterly instalment statements and an annual PRRT return if it derives assessable receipts, and the tax is payable in quarterly instalments.
An entity with an interest in an exploration permit or retention lease does not have to pay PRRT. However, it may benefit from understanding aspects of PRRT that could affect it now and into the future. This detail helps it consider record-keeping requirements.
Registering for PRRT
An entity with an interest in a petroleum project opting for the PRRT regime for the first time may need to register for PRRT and provide accurate contact details. The ATO can then provide the entity with the right information to help it make PRRT decisions. If an entity has a PRRT payment liability, the ATO releases it with a unique payment reference number so it can pay electronically. An entity with an interest in an exploration permit or retention lease may also opt to register for PRRT. As PRRT is assessed on a project basis, an entity that chooses to register for PRRT files a separate registration form with the ATO for its interest in each petroleum project, exploration permit or retention lease.
You can speak to the best accountant Melbourne or a registered tax agent to help you meet your Petroleum Resource Rent Tax obligations.
Lodging Quarterly PRRT Instalment Statements
An entity must pay its PRRT liability for a year of tax in 3 cumulative quarterly instalments with a final payment when it files its annual PRRT return. The tax year for PRRT purposes runs from 1 July to 30 June the following year. An entity can’t choose a substituted accounting period for PRRT. PRRT instalments of tax are due and payable on or before the dates mentioned below each year of tax:
- 21 October
- 21 January
- 21 April
PRRT instalment statements should be filed on or before those dates for a relevant instalment period. PRRT instalments are cumulative, with each instalment period effectively treated as a year of tax. An instalment period is the period at the beginning of the year of tax and ending at the end of the month before the month in which the instalment is due and payable. That is, the instalment period is the 3-month, 6-month, or 9-month period ending on the dates mentioned below in a year of tax:
- 30 September
- 31 December
- 31 March.
The current liability for each instalment time period considers actual receipts and expenditure in that current year of tax up till the end of the instalment period, and a proportionate amount of any undeducted expenditure and transferred exploration expenditure calculated depending on the following percentage amounts:
- First instalment period: 25%
- Second instalment period: 50%
- Third instalment period: 75%
The previous instalment period liability is deducted from the existing instalment period liability to determine the instalment of tax payable. However, an entity is not required to file an instalment statement until it has a liability for an instalment time period. After lodging an instalment statement, it needs to file an instalment statement for each subsequent instalment period, even if the instalment amount payable for the period is nil. As PRRT is assessed on the basis of a project, an entity must prepare and lodge separate instalment statements for each interest it has in a petroleum project.
Lodging a PRRT Return
An entity with a petroleum project that is in commercial production must lodge a PRRT return for a year of tax, even if its taxable profit is nil. The due date for PRRT return lodgment is no later than 60 days after the end of the year of tax, being on or prior to 29 August, or within such further period as we allow. Any final payment of tax is also due to be paid on 29 August at the end of the tax year. However, if the PRRT instalment paid for the tax year surpasses the assessed PRRT liability for the year, there will be a refundable amount. As PRRT is assessed on a project basis, an entity must prepare and file separate PRRT returns for each interest it has in a petroleum project.