Petroleum revenue tax
Produced in partnership with Phil Greatrex of CW Energy LLP
Petroleum revenue tax

The following Tax practice note produced in partnership with Phil Greatrex of CW Energy LLP provides comprehensive and up to date legal information covering:

  • Petroleum revenue tax
  • PRT post 1 January 2016
  • PRT basics
  • Production receipts
  • Tariff receipts
  • Field expenditure
  • Non-field reliefs
  • Cross-field allowance
  • Research expenditure relief
  • Unrelievable field loss relief
  • More...

This Practice Note is about the rules on petroleum revenue tax (PRT), which was payable by oil companies on the value of oil and gas produced and receipts from the use of qualifying infrastructure, less certain costs and reliefs. PRT was charged at varying rates following its introduction in 1975. It was set at 50% from July 1993 until it was reduced to zero with effect from 1 January 2016. It is still however possible to create losses which can be carried back to recover past PRT paid.

For information on the corporation tax and supplementary charge rules applying to companies in the oil and gas sector, see Practice Note: Oil and gas—corporation tax and the supplementary charge.

PRT post 1 January 2016

Under a 0% regime, losses calculated under the PRT rules arising on decommissioning or otherwise must be carried back on a last in, first out basis such that they would first have to be set against profits suffering the 0% rate, with only the excess losses being set against prior years and generating actual PRT refunds. Companies anticipating that future losses will be carried back into periods before 2016 to generate repayments of past PRT paid will still need to prepare PRT returns for records purposes, even though there will be nil PRT liability.

For some oilfields, PRT returns are no longer needed and such

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