Taxes Consolidation Act 1997 section 696H

Charge to petroleum production tax

Section 696H provides for the charge to petroleum production tax on each taxable field, calculated as the greater of a minimum rate on gross revenue or a sliding scale rate on net income determined by the field's profitability.

• Petroleum production tax is an additional duty charged for each taxable field in each relevant period, over and above corporation tax at 25 per cent on petroleum profits.
• The tax payable is the greater of 5 per cent of gross revenue less transportation costs, or a rate applied to net income on a sliding scale from 10 per cent (where the R factor is 1.5) up to 40 per cent (where the R factor is 4.5 or above).
• The market value rules in section 696 are extended to petroleum related assets, ensuring that disposals and acquisitions of petroleum or petroleum related assets are treated as made at market value.
• Where petroleum production tax applies to a taxable field, profit resource rent tax under section 696C cannot also apply to that field, preventing a double charge.