Taxes Consolidation Act 1997 section 684

Interpretation (Chapter 2)

Section 684 defines the key terms used throughout the petroleum taxation regime, covering the types of activities, expenditure, licences and corporate relationships relevant to offshore oil and gas exploration and extraction.

• A petroleum trade is a trade (or part of a trade) consisting of petroleum activities, which comprise exploration, extraction and the acquisition or exploitation of petroleum rights; petroleum profits from a relevant field are taxed at a reduced 25% rate and ring-fenced for loss relief purposes.
• Exploration expenditure covers capital spending on searching for petroleum deposits and licence payments to the Minister; development expenditure covers capital spending on machinery, plant and structures used in extraction and transport; abandonment expenditure covers the costs of closing down and decommissioning a field.
• A licence means an exploration licence, lease undertaking, licensing option, petroleum prospecting licence, petroleum lease or reserved area licence granted under the Petroleum and Other Minerals Development Act 1960 on terms presented to the Oireachtas on or after 29 April 1975.
• Two companies are associated if one is a 51% subsidiary of the other, both are 51% subsidiaries of a third company, or one is a member of a consortium of five or fewer companies that owns the other.