Increased Tax Rates On Oil And Gas Fields In Ireland

Author:Mr Michael O'Connor
Profession:Matheson
 
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On 22 October 2015 and after much speculation, the Minister for Finance published the Finance Bill 2015 which unveiled new draft laws that will see the maximum marginal tax rate on oil and gas field exploration in Ireland increase from 40% to 55%. The overall marginal increase will incorporate corporation tax and the new Petroleum Production Tax ("PPT"). 

The PPT will replace the Profit Resources Rent Tax introduced by the Finance Act 2008. The PPT will ensure that discoveries made under future exploration licences will be subject to a higher tax rate resulting in an increased revenue stream for the State. In addition, this increased financial return will accrue to the Government at an earlier point in time which will result in higher income security from lucrative offshore resources. 

The PPT will provide that a minimum payment of 5% of annual gross revenues will be due annually once a field starts producing oil or gas. Although the exact...

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