On 18 March 2024, the Australian Treasury announced that it initiated a public consultation on Petroleum Resource Rent Tax transfer pricing regulations. The deadline for receiving comments on the matter is set at 12 April 2024.
In the 2023 24 Budget, the government announced the measure ‘Petroleum Resource Rent Tax – Government Response to the Review of the Petroleum Resource Rent Tax (PRRT) Gas Transfer Pricing arrangements.’ This measure included a commitment to remake the Petroleum Resource Rent Tax Assessment Regulation 2015 (the 2015 Regulation).
The Petroleum Resource Rent Tax Assessment Regulations 2024 (the 2024 Regulations) reforms the methodology used in the 2015 Regulation to calculate the price of sales gas that is processed into liquefied natural gas (LNG), including:
- the advanced pricing arrangement (APA) rules
- comparable uncontrolled price (CUP) rules
- provisions for backfilling
- making asset life formula elections irrevocable
- equalizing the upstream/downstream treatment in profit/loss situations
- ensuring that tolling arrangements are expressly captured in the regulations.
The Petroleum Resource Rent Tax Assessment Regulations 2024: Miscellaneous amendments (2024 remake) insert deals with all the announced reforms to the 2015 Regulation, except for those measures relating to tolling arrangements, which were released in an earlier consultation.
The Treasury is currently seeking views from interested parties on the 2024 remake. Consultation on the Callaghan review recommendations will commence later in 2024.
The Australian Treasury also seeks stakeholder feedback on priority issues that would inform the ATO’s administrative approach and public advice and guidance on these measures. This also includes feedback in the form of any public advice and guidance necessary to support understanding of the measures.
