Extractives Industry Flashcards
Licensee?
person granted a mining right
Contractor
person with whom government has concluded a petroleum agreement
subcontractor
supplies services to licensee and contractor
Licensee corporation tax rate
?
contractor tax rate
30% resident
37.5% non resident with PEs
upon ceasing of operations, how long can unutilized losses be carried forward?
3 years
What is prospecting expenditure?
incurred in operations authorised under a prospecting right
Exploration Expenditure?
incurred by a contractor in explorattion operations
Extraction expenditure
capex incurred by licensee when undertaking operations under extraction right
Development expenditure?
capex incurred by contractor while undertaking operations under a development plan
tax treatment of prospecting/exploration expenditure?
allowable deduction in the year incurred
Tax treatment of development/extraction expenditure?
20% claimed in year its incurred and subsequent years (till 100%)
treatment of social infrastructure expenditure?
tax deductible subject to approval by CS
Treatment of machinery for prospecting/exploration?
WTA at 100%
WTA rate of petroleum pipelines
12.5%
treatment of contributions to rehabilitation/decommissioning funds
allowed if approved
treatment of amount returned to the licensee/contractor or surplus?
taxable in the year it was returned
treatment of amount accumulated/withdrawn for rehab/decommissioning expenditure?
tax exempt
Tax treatment of Petroleum sharing agreement?
portion govt receives includes the taxes
taxes excluded from petroleum sharing agreements?
tax on gain on disposal of interest in the agreement
withholding tax
Farm out agreement?
agreement entered into by a licensee/contractor with a 3rd party for the transfer of interest in a mining/petroleum agreement
withholding tax to subcontractor paid by licensee?
20% on gross. Is final tax
withholding tax on payment by contractor to subcontractor?
5.625% on gross. Is a final tax
tax point on WHT on fees to subcontractors?
when fee is paid or time contractor credits service fee of subcontractor account whichever comes first
corporate tax rate of non resident subcontractors?
37.5%
corporate tax rate of resident subcontractors?
30%
thin cap ratio for licensees and contractors?
2:1
treatment of hedging income?
as a specified source of income
gain on disposal of interest where interest derives more than 50% from immovable property?
100% of gain is taxable
where value derived is between 20-50%
A*B/C
A- amount of gain
B -value of interest from immovable property
C - total value of interest
tax rate for the gains in disposal on interest?
30% resident
37.5% non resident
withholding tax rates on royalties?
5% resident
20% non residents
