Taxes and royalties on minerals and petroleum

The Australian Government and state and territory governments own Australia’s mineral and petroleum resources on behalf of the community. Companies that extract mineral and petroleum resources must pay taxes and royalties. This ensures the community receives an adequate return on the use of Australia’s non-renewable resources.

Roles and responsibilities

The Australian Government and state and territory governments share responsibility for taxing resources projects.

Australian Government

The Australian Government:

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

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

Our department

We work with the Western Australia Department of Mines, Industry Regulation and Safety 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.

We also collect royalties for the Commonwealth from:

• the Joint Petroleum Development Area with Timor Leste
• the Barrow Island (resource rent royalty)
• some onshore production in Western Australia from pre-1979 leases

State and territory governments

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

Read more

• Find out how to apply for a petroleum projects combination certificate.
• The Australian Taxation Office administers all tax regimes, including company tax, the PRRT and crude oil excise.
• The Treasury is responsible for developing the Australian Government’s policy on resource-specific taxation.