Resources Taxation

  • Resources projects are subject to a range of taxes and royalties at state and national levels.
  • Resource-specific taxes are designed to ensure the community receives an adequate return from Australia’s natural resources, while encouraging their ongoing development.
  • The Australian Government has collected over $25 billion in PRRT revenue since 1999–00.

Resources companies operating in Australia are subject to a range of taxes and charges. Some of these apply to all incorporated entities, like the company tax regime. Others are resource-specific and apply only to companies with interests in resources and energy projects. These secondary or resource-specific taxation arrangements vary depending on the commodity produced and its geographic location.

Responsibility for resource-specific taxation

The Australian, state and territory governments own Australia’s mineral and petroleum resources on behalf of the community and impose charges or taxes on the companies that extract them. This ensures the community receives an adequate return on the development of the country’s natural resources.

Responsibility for resources taxation is divided between the Australian and state/territory governments:

  • State/territory governments collect royalties for onshore mineral and petroleum projects and offshore mineral and petroleum projects located within their coastal waters. There is no common royalty regime in place across the states and territories.
  • The Australian Government administers the Petroleum Resource Rent Tax (PRRT), a profit-based tax on all petroleum or oil and gas projects, both onshore and offshore. The Government also collects specific taxes and charges on the recovery of oil, gas and condensate recovered from projects located in Commonwealth waters. A summary of these taxes and charges is in the Summary of offshore resources taxes and charges factsheet.

Role of the department

Within the Australian Government, responsibility for the development, implementation and administration of the various tax regimes is shared.

The Australian Taxation Office (ATO) 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.

The Department of Industry, Innovation and Science (DIIS), together with the Western Australia Department of Mines, Industry Regulation and Safety, is responsible for administering the collection of petroleum royalties from the North West Shelf project. DIIS also administers the collection of the Commonwealth’s entitlement to revenue from royalties including the Joint Petroleum Development Area with Timor Leste, the Barrow Island (resource rent royalty) and some onshore production in Western Australia derived from pre-1979 leases.  

Within this overarching framework, the Resources Minister has direct responsibility for issuing combination certificates under the Petroleum Resource Rent Tax Assessment Act 1987 (Cth).

Related documents

  • Summary of offshore resources taxes and charges factsheet

Related Pages

  • Resources Exploration Incentives
  • Roles and responsibilities
  • Offshore petroleum

Contact

People or companies with potential tax liabilities are advised to seek further information from the ATO in the first instance.

For information on the Australian Government’s taxation policies and specific taxation issues (for example tax transparency or the work of the Tax Avoidance Taskforce), please contact The Treasury.

For additional information, please contact resources@industry.gov.au.

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