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Australia: Updated guidance on petroleum resource rent tax implements gas transfer pricing review recommendations

Guidance applies to tax years beginning on or after July 1, 2024

August 7, 2024

The government released updated guidance on the petroleum resource rent tax (PRRT) that implements recommendations of the Treasury gas transfer pricing review, including:

  • Various changes to better accommodate commercial tolling arrangements
  • Requirement that an irrevocable election be made to use either the shorter or longer asset life formula
  • Equalization of treatment of notional upstream and downstream entities between loss and profit situations when using the residual pricing method (RPM)
  • Updated comparable uncontrolled price (CUP) rules to align with current OECD guidelines
  • Modified advanced pricing arrangement (APA) rules
  • Requirement that when a new facility is brought into the PRRT regime for the first time, the value of the plant for use in the RPM is the historical cost of the facility

The updated guidance applies to tax years beginning on or after July 1, 2024.

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