The Australian Taxation Office (ATO) has announced an update to its Taxation Ruling TR 2014/9 to incorporate recent clarifications in the law regarding the petroleum resource rent tax (PRRT) on 25 July 2024.
This ruling is in response to the decision of the Full Federal Court in Commissioner of Taxation v Shell Energy Holdings Australia Limited [2022] FCAFC 2; the Government has amended the PRRT to clarify that ‘exploration for petroleum’ is limited to the ‘discovery and identification of the existence, extent and nature of the petroleum resource’ and does not extend to ‘activities and feasibility studies directed at evaluating whether the resource is commercially recoverable.’
The amendments contained in the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 received Royal Assent on 9 July 2024.
The Commissioner of Taxation’s administrative treatment and written binding advice set out in Taxation Ruling TR 2014/9, which applies from 21 August 2013, is currently being updated to reflect the amendments in the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024.
The amendments will apply to all expenditure incurred from 21 August, 2013.
