Taxes Consolidation Act 1997 section 696G

Interpretation and application (Chapter 4)

Section 696G defines the key terms used in the petroleum production tax (PPT) provisions.

• Defines cumulative field costs, cumulative field gross revenue, eligible expenditure, field costs, gross revenue, net income, relevant period, R factor, specified licence, taxable field, and transportation expenditure, all by reference to periods commencing on or after 18 June 2014.
• The R factor (cumulative field gross revenue divided by cumulative field costs) determines the profit ratio of a taxable field and the applicable rate of PPT.
• Existing definitions in section 684 (such as exploration expenditure, development expenditure, and abandonment expenditure) apply to this Chapter with any necessary modifications.
• Where an area becomes a taxable field after 18 June 2014, expenditure incurred after that date but before the petroleum lease was granted is treated as incurred on the date the area first becomes a taxable field.