
TY  - JOUR
A1  - Cathro, W.G. 
T1  - PETROLEUM RESOURCE RENT TAX ISSUES AFFECTING THE USE OF DEDUCTIONS
JF  - The APPEA Journal
JO  - The APPEA Journal
Y1  - 2006
VL  - 46
IS  - 1
SP  - 577
EP  - 586
KW  - 
UR  - https://doi.org/10.1071/AJ05038 
N2  - Careful planning is necessary when buying or selling an interest in an offshore petroleum area, farming into a project or setting up operating arrangements for a project within the petroleum resource rent tax (PRRT) net, to ensure maximum use of deductions for exploration expenditure and other costs of the project.The rules dealing with transfers of interests in petroleum projects and with the transfer of undeducted exploration expenditure from an unprofitable project to a profitable one, encourage participants to ensure that they hold an interest in the relevant area before they commence exploration activity.There are special rules applying in the PRRT context to the transfer of interests in a project from one person to another. It is important to understand how these rules apply as they can impact both upon who is liable to pay PRRT on the project and the ability to use and transfer exploration expenditure.Certain head-office costs are excluded from deductibility when calculating the taxable profit of a project. The manner in which a project is structured may impact on the practical implications of this exclusion.This paper provides an overview of the PRRT regime, the implications of the transfer of an interest in a project and the requirements which must be satisfied in order to transfer exploration expenditure between projects. The paper then contains a discussion of a number of issues in relation to deductibility and use of exploration expenditure, the transfer of interests in permits and the use of contractors to undertake activities on behalf of joint venture participants maximising the scope of available deductions. 
ER  -

