Section 52: Reduction in Rate of Petroleum Revenue Tax
Summary
1.This section amends the Oil Taxation Act (OTA) 1975 to reduce the rate of petroleum revenue tax from 50% to 35% for chargeable periods ending after 31 December 2015.
Details of the Section
2.Subsection (1) amends OTA 1975.
3.Subsections (2) and (4) reduce the rate of petroleum revenue tax from 50% to 35% for chargeable periods ending after 31 December 2015.
4.Subsection (3) provides a consequential amendment to the cap on interest carried on a repayment of petroleum revenue tax for periods subject to the lower rate. This subsection reduces the relevant percentage from 60% to 45% for periods ending after 31 December 2015.
Background Note
5.Petroleum revenue tax (PRT) was introduced by OTA 1975 and is essentially a tax on the profits from oil and gas production from the UK Continental Shelf.
6.This section reduces the rate of PRT payable by oil and gas companies operating on the UK Continental Shelf from 50% to 35% and provides a consequential reduction in the interest cap provided by Paragraph 17 of Schedule 2 to OTA 1975.
7.This reduction will help provide the right conditions for business investment to maximise the economic recovery of the UK’s oil and gas resources.
