Project Blue’s 2027-28 notional taxable income is reduced from $1000 million by $163 million to $837 million. This reduces Company B’s PRRT liability with respect to Project Blue by $65 million (from $400 million to $335 million) in the 2027-28 income year. is no balance of Company B’s exploration expenditure to carry forward as the full amount was transferred to Project Blue. Company C Company C’s interest in Red also starts becoming profitable in 2027-28 with a notional taxable profit of $1000 million. However, Red applied for and received its production licence in 2009-10. This means that while Company C must also transfer some of its exploration expenditure interest from Project Green to Red, the uplift rate that applies is LTBR plus 15 percentage points (as 2017-18 expenditure is incurred no earlier than five years before Red’s production licence was applied for and granted in 2009-10). (The LTBR is assumed to be constant at 5 per cent.) Project Red’s 2027-28 notional taxable income is reduced from $1000 million by $619 million to $381 million. This reduces Company C’s PRRT liability with respect to Project Red by $248 million (from $400 million to $152 million) in the 2027-28 year. There is no balance of Company C’s exploration expenditure to carry forward as the full amount is transferred to Project Red. While both Company B and C’s interests in their respective projects start to become profitable in the same year and with the same notional taxable profit, the tax outcomes as a result of transferability are different. Company D Company D does not have any other petroleum project interests. Its exploration expenditure from the 2017-18 year is considered Class 2 ABR exploration expenditure. Accordingly, it is uplifted at the rate of LTBR plus 15 percentage points and carried forward until the 2036-37 financial year when Project Green is in a cash flow positive situation. In 2036-37, the uplifted exploration expenditure that is able to be deducted is $3195 million. (The LTBR is assumed to be constant at 5 per cent.)
Project Blue’s 2027-28 notional taxable income is reduced from $1000 million by $163 million to $837 million. This reduces Company B’s PRRT liability with respect to Project Blue by $65 million (from $400 million to $335 million) in the 2027-28 income year. is no balance of Company B’s exploration expenditure to carry forward as the full amount was transferred to Project Blue. Company C Company C’s interest in Red also starts becoming profitable in 2027-28 with a notional taxable profit of $1000 million. However, Red applied for and received its production licence in 2009-10. This means that while Company C must also transfer some of its exploration expenditure interest from Project Green to Red, the uplift rate that applies is LTBR plus 15 percentage points (as 2017-18 expenditure is incurred no earlier than five years before Red’s production licence was applied for and granted in 2009-10). (The LTBR is assumed to be constant at 5 per cent.) Project Red’s 2027-28 notional taxable income is reduced from $1000 million by $619 million to $381 million. This reduces Company C’s PRRT liability with respect to Project Red by $248 million (from $400 million to $152 million) in the 2027-28 year. There is no balance of Company C’s exploration expenditure to carry forward as the full amount is transferred to Project Red. While both Company B and C’s interests in their respective projects start to become profitable in the same year and with the same notional taxable profit, the tax outcomes as a result of transferability are different. Company D Company D does not have any other petroleum project interests. Its exploration expenditure from the 2017-18 year is considered Class 2 ABR exploration expenditure. Accordingly, it is uplifted at the rate of LTBR plus 15 percentage points and carried forward until the 2036-37 financial year when Project Green is in a cash flow positive situation. In 2036-37, the uplifted exploration expenditure that is able to be deducted is $3195 million. (The LTBR is assumed to be constant at 5 per cent.)
OP_design_issues_PRRT.docx