Petroleum taxes and royalites

Taxing resources projects

The Australian Government and state and territory governments own Australia’s petroleum resources on behalf of the community. They all share responsibility for taxing resources projects.

The ATO (Australian Tax Office):

• administers the Petroleum Resource Rent Tax (PRRT), a profits-based tax levied on all petroleum, oil and gas projects in Australian Commonwealth waters
• collects taxes and charges on the recovery of oil, gas and condensate from projects in Australian Commonwealth waters.

The Minister for Resources is responsible for issuing combination certificates for petroleum projects under the Petroleum Resource Rent Tax Assessment Act 1987.

Collecting petroleum royalties

Our department works with the Western Australia Department of Treasury and Finance to collect petroleum royalties from the North West Shelf project. The project is a joint venture between 6 major international companies and is one of the world’s largest liquefied natural gas producers.

Acts that include North West Shelf royalty provisions:

• Offshore Petroleum (Royalty) Act 2006
• Offshore Petroleum and Greenhouse Gas Storage Act 2006. 

We also collect royalties for the Commonwealth from:

• the Barrow Island (resource rent royalty)
• some onshore production in Western Australia from pre-1979 leases.

State and territory governments also collect royalties for onshore and offshore petroleum projects in their coastal waters. There is no common royalty regime in place across all states and territories.