Taxation of Petroleum presentation - new (世界各国税务体系介绍).ppt

TaxationofPetroleumResourceExplorationandExploitation AlanWinstonGranwellPaulMyersRajniSekhri 2 10 2020 2 IntroductoryNote TheinformationcontainedhereinhasbeenobtainedfromtheDLAPipernetwork fromfirmswithwhichwehavecorrespondentrelationshipsincountriesinwhichwedonothaveofficesandfromothersources Thispresentation i isintendedtoprovideasummaryoverviewofcertaininformationrequested ii isnotintendedtoconstitutelegaladvicewithrespecttothelawsofanyparticularcountryand iii shouldnotberelieduponaslegaladviceinstructuringinvestmentsorconductingactivitiesinanyparticularcountry Incertaincases wehavenotbeenabletodatetoobtainasummaryoverviewofthetaxregimeofsomecountriesorobtaininformationwithrespecttoselectedissues Wewouldbepleasedtoprovidetheresponsesatalatertimeifrequested 2 10 2020 3 FocusofPresentation TosurveyhowaChineseenterpriseengagedinpetroleumresourceexplorationandexploitationwouldbesubjecttotaxationinselectedjurisdictions Note asageneralmatter withrespecttothetaxationoftheChineseenterpriseinthosejurisdictionswithwhichChinahasconcludedabilateralincometaxtreaty theChineseenterpriseshouldbeabletoobtainthetaxationbenefitsprovidedbythedoubletaxationagreement Theseissuesarebeyondthescopeofthispresentation Jurisdictionssurveyed Australia Canada Kazakhstan Kenya Indonesia Iran Norway UKandUS Jurisdictionsforwhichinformationstillisrequiredtobeobtained SaudiArabiaandVietnam 2 10 2020 4 TopicsCovered Formsofagreementforpetroleumexplorationandexploitation Choiceofentity Generalincometaxrules Specialtaxationrulesapplicabletopetroleumoperations 2 10 2020 5 Background Theincometaxationofpetroleumtransactionsiscomplexandspecialized primarilybecauseofthenatureoftheindustry Theacquisition exploration anddevelopmentofpropertiesfortheproductionofpetroleumproductsrequirestheinvestmentofconsiderablecapitalandofteninvolvetheassumptionofconsiderablerisk particularlywithrespecttopreviouslyundevelopedproperties Theownersandoperatorsofpetroleumpropertiesmayutilizeavarietyoftechniquestofinancethedevelopmentofpropertiesandtospreadtherisk 2 10 2020 6 TheIndustryInGeneral Thepetroleumindustryisgenerallydividedintotwobroadsegments ExplorationandProduction the Upstream Segment Exploration Ascertainingtheexistence location extent orqualityofamineraldeposit Production Operationsthatdealwithbringingtheoiltothesurface Transportation RefiningandMarketing the Downstream Segment Transportation Operationsthatdealwithmovingtheoilformthefieldtotherefineryorprocessingplant Refining Processing Convertingcrudeoilinitsrawstatetomarketableproducts i e fuels lubricatingoils waxes asphaltandpetrochemicals DistributionSystem Operationsincludestorageandhandling transportation anddeliverytotheenduser Enduserscanbeterminals companyownedservicestationsandotherbrandedoutlets andindependentmiddlemen jobbers Integratedcompaniesthatconductbothsegments WefocushereinontheUpstreamsegment 2 10 2020 7 Definitions Amortization Thecostrecoverysystemforintangibleproperty analogoustodepreciationfortangibleproperty Depletion Anallowancefortheexhaustionofthemineralreservesthatisintendedtoreturntheenterprise scapitalinvestmentinthereservesconsumedintheproductionofincome Adepletiondeductioncanbebasedonunitsofproductionorastipulatedpercentageofthegrossincomeofthepropertyduringthetaxableyear Oilinplaceisawastingassetthatisphysicallyconsumedorexhaustedbythedevelopmentof andproductionfrom themineralproperty Theproductionofoilisanincome producingoperationandresemblesamanufacturingbusinesscarriedonthroughtheuseofsoil Depreciation Areasonableallowancefortheexhaustion wearandtear includingareasonableallowanceforobsolescence ofpropertyusedinatradeorbusinessorheldfortheproductionofincome ExplorationCosts Costspaidorincurredbeforethedevelopmentstage forascertainingtheexistence location extent orqualityofamineraldeposit 2 10 2020 8 Definitions ExploratoryGeologicalandGeophysicalCosts Expendituresincurredbyanenterpriseforthepurposeofobtainingandaccumulatingdatathatwillserveasthebasisfortheacquisitionsandretentionofmineralpropertiesbytheenterpriseexploringforminerals IntangibleDrillingandDevelopmentCosts Costsincurredindevelopinganoilproperty 2 10 2020 9 FormsofAgreement Asageneralmatter thepetroleumindustryoperatesincountriesthroughouttheworldinaccordancewithanumberofdifferenttypesofagreements Theseagreementsgenerallyfallintooneoffourcategories oracombinationofthecategories Concessions Productionsharingagreements Riskagreements Servicecontracts Wesummarizethefirsttwotypesofagreementsherein astheywouldappearmostrelevanttooursummary 2 10 2020 10 Concession Aconcessionisacontractthatgrantspermissionwithadegreeofexclusivitytoexploreandextractmineralresourcesinanareaofthesourcecountryorinterritorialwatersunderthesovereignjurisdictionofthecountry Issues Whethertheabilitytoenterintoaconcessionagreementislimitedtodomesticallycontrolledenterprisesorcanbegrantedtoforeigncontrolledenterprises Thetermandconditionsoftheconcession Whetheraconcessionisgrantedseparatelyforexplorationandexploitation respectively Whethertheconcessionfeeisdeterminedbyreferencetotheconcessionarea productionorboth 2 10 2020 11 ProductionSharingAgreement PSA APSAisacommontypeofcontractexecutedbetweenagovernmentandaresourcecompanywithrespecttohowmuchoftheresourcetheprivatecompanyandthegovernmentalentitywillreceive InaPSA thegovernmentawardstheexecutionofexplorationandproductionactivitiestoacompany Thecompanybearsthemineralandfinancialriskoftheinitiativeandexplores developsandultimatelyproducesthefieldasrequired Whensuccessful thecompanyispermittedtousethemoneyfromproducedoiltorecovercapitalandoperationalexpenditures knownas costoil Theremainingmoney knownas profitoil issplitbetweenthegovernmentandthecompany typicallyatarateofabout80 forthegovernment 20 forthecompany PSAscanbebeneficialtogovernmentsofcountriesthatlacktheexpertiseorcapitaltodeveloptheirresourcesandwishtoattractforeigncompaniestodosoandcanbeprofitablefortheoilcompaniesinvolved butofteninvolveconsiderablerisk 2 10 2020 12 ChoiceofEntity FormsAdomesticcompany Abranchofaforeigncompany Ajointventure Whetherthereisanylimitationinacountrywithrespecttotheconductofpetroleumoperations eithertheexplorationorexploitationactivities WhetheraconcessionoraPSAforlocaltaxpurposesconstitutesapermanentestablishment PE fortreatypurposesifconductedthroughbranchform 2 10 2020 13 GeneralPrinciplesofTaxationIncome Arethereanytaxexemptionsavailablefortheexplorationorexploitationofpetroleumorpetrochemicalproducts Income DomesticCompany Worldwideorresidencebasis BranchofForeignCompany DoesaPEarise IstheincomeattributabletoaPE JointVenture Taxationofallocableshareofprofits Taxationofoperatingincome Onanannualbasis Onanetbasis Canonedetermineoperatingincomeonaconsolidatedbasisoroffsetthelossesofonebranchagainsttheprofitsofanotherbranch 2 10 2020 14 DeductibleExpenditures Howtheincomesubjecttotaxationisdetermined Istaxableincomedeterminedbyreferencetogrossincomenetofoperatingexpenses e g expensesincurredduringtheyearinacquiring securing andmaintainingtheincome plusdepreciation amortizationandotherdirectorindirectexpenses Aredeductionsprovidedfordepletion intangibledrillingcosts abandonment delayrentals geologicalandgeophysicalexpenses Aredirectorindirectcostsexpensedorcapitalized Aretherelimitationsonthedeductibilityofinterestsuchasthroughthincapitalizationrules isinterestcapitalizedorexpensed Arethereanyinventoryadjustmentsorwritedownsofassetvalues Aredeductibleexpenseslimitedtothoseexpendituresassociatedwithacquiringincomeordotheyincludeexpendituresinacquiringabusiness suchasconsultancyfees Arethereanyspecialdeductionsforcompaniesengagedinpetroleumextractionorexploitationoperations Arethere ringfence provisionsthatpreventoilprofitsfrombeingreducedbynon oillossesorexcessiveinterestpayments Whataretheprovisionsfortaxlosscarry forwardsorcarry backs 2 10 2020 15 IncomeTax Doesthegeneralincometaxapplyoristhereaspecialincometaxregimeapplicabletoincomefromtheextractionandexploitation Whatistherateoftax Isthereasupplementarytaxorchargeonoilprofits Arethereanytaxcreditstooffsetthetax Isthereabranchprofitsorwithholdingtax 2 10 2020 16 CountrySpecificAnalysis Australia 2 10 2020 17 AustraliaFormsofAgreement Australiasplitsauthorityforregulatingexplorationandexploitationbetweenthefederalandstateandlocalgovernments Generallyspeaking onshoreactivitiesarewithinthejurisdictionofthestateandlocalgovernments Offshoreactivitiesarewhollyregulatedbythefederalgovernment 2 10 2020 18 AustraliaFormsofAgreement FederalProgram ThroughitsOffshorePetroleumExplorationAcreageRelease OPEAR program followingconsultationwithstakeholders thefederalgovernmentreleasesoffshorepetroleumexplorationacreageforcompetitivebiddingbyprospectiveexplorers OPEARisthekeymechanismforthegovernmenttoencourageoffshorepetroleumexplorationinAustralia Theannualreleaseofacreageenableslongtermplanningfortheindustry accesstocomprehensivegeologicalandgeophysicaldataonCD ROMandthroughthewebsite andprovideshigh qualityinformationaboutissuesthatmayneedtobetakenintoconsiderationbyapplicants 2 10 2020 19 AustraliaFormofAgreement StateandLocalPermits TheDepartmentalsomanages inpartnershipwiththestatesandtheNorthernTerritory theawardofexplorationpermits Explorationpermitsareawardedtothoseapplicantswhowillundertakethefullestassessmentofanarea spetroleumpotential Followingdiscoveryofapetroleumresource thesuccessfulexplorerwillhavetherighttoproducetheresourceandtoconstructpipelinesandotherinfrastructure subjecttodevelopmentapprovalstoensureappropriateregardtosafety theenvironmentandgoodoilfieldpractice 2 10 2020 20 AustraliaChoiceofEntity Nolimitations TheformwilldeterminetheincidenceofbothcorporateandPRRTtaxation discussedbelow InformationhastobeobtainedastowhetheraconcessionoraPSAconstitutesaPEifconductedthroughbranchform 2 10 2020 21 AustraliaGeneralPrinciplesofIncomeTaxation IncomeTax Domesticcompanytaxedonworldwideincome BranchofforeigncompanywithPEtaxedonattributableprofits JointVenturertaxedonallocableshare Accountingperiodstillneedstobeclarified Whetherconsolidatedreportingisavailableforcompanygroupsstillneedstobeclarified 2 10 2020 22 AustraliaDeductibleExpenditures Explorationdeductionsapplytobothcapitalandrevenueexpenditures butarenotavailableforthecostofdepreciatingassets Adeductionisavailableonlyiftheassetisnotusedfordevelopmentdrillingforpetroleumoroperationsinthecourseofworkingapetroleumfield AnoutrightdeductionisavailableforcurrentandcapitalexpenditureonrehabilitationofAustralianandForeignsitesusedbythetaxpayerforpetroleumoperations Rehabilitation fullorpartialrestorationofthesitetoareasonableapproximationofitspre miningcondition Furtherdeductionsforexpendituresincurredforenvironmentalprotectionactivities Examples pollution wastemeasures andestablishingcarbonsinkforests 2 10 2020 23 AustraliaGeneralPrinciplesofIncomeTaxation Offshoreprojects Australialeviesaprofit based PetroleumResourceRentTax or PRRT onPetroleumproducersinlieuofaroyaltyorexcisetax Somespecificfeaturesofthistaxare Taxisimposedata40 rateontaxableprofit PPRTisdeductibleindeterminingcompanyax Projectexpendituresaredeductibleindeterminingtaxableprofit Projectexpendituresincludecapitalorrevenuepaymentsthatanentityincursbyprovidingoperationsandfacilitiesinthepreparationfortheproject includingconductingafeasibilityorenvironmentalstudyandtakingresponsibilityforaproductionlicenseorotherfees Capitalexpendituresaredepreciatedonastraightlinebasisoverfieldlife Projectexpendituresfromrelatedoffshoreprojectscanbetransferredfromprojecttoproject Projectexpenditurescanbecarriedforwardtooffsetfuturetaxableprofitandareincreasedpursuanttospecifiedtimevalueofmoneybenchmarks 2 10 2020 24 AustraliaGeneralPrinciplesofIncomeTaxation Onshoreprojects NosubjecttoPRRT Rathertheyaresubjecttoexciseandroyaltybasedchargesofapproximate12 5 ofnet wellheadvalue 2 10 2020 25 AustraliaThinCapitalization Appliestothefollowingentities ForeignentitiesinvestinginAustralia Foreign controlledAustralianentities andAustralianmultinationalenterpriseswithcontrolled 2 10 2020 26 AustraliaGeneralPrinciplesofIncomeTaxation DividendImputation AustralianresidentindividualswhoreceiveataxabledividendfromAustralianresidentcompaniesreceiveacreditfortaxpaidbythecompanyonitsincome Effectonshareholders subjecttotheirmarginaltaxrate thetaxpayableonthedividendiseffectivelyfullyorpartiallypaid Effectoncompanies certainrecordsmustbemaintainedtoverifytheinvestment 2 10 2020 27 CountrySpecificAnalysis Canada 2 10 2020 28 CanadaFormsofAgreement Thealternativeagreementswhichcanbereachedregardingtherighttoexploreandexploithasnotbeenidentified 2 10 2020 29 CanadaChoiceofEntity Nolimitations Certainrestrictionsapplytoincorporatedsubsidiariesthatdonotapplytobranchoperations Branchoperationsaresubjecttobranchtaxinadditiontoregularincometax InformationhastobeobtainedastowhetheraconcessionoraPSAconstitutesaPEifconductedthroughbranchform 2 10 2020 30 CanadaGeneralPrinciplesofIncomeTaxation Income Domesticcompanytaxedonaworldwidebasis BranchofforeigncompanywithPEtaxedonattributableprofits JointVenturerstaxedonallocableshare Accountingperiodstillneedstobeclarified Whetherconsolidatedreportingisavailableforcompanygroupsstillneedstobeclarified 2 10 2020 31 CanadaDeductibleExpenditures PetroleumExpensesaredividedamongthreepools explorationexpenditures developmentexpendituresandoperationexpenditures Explorationexpendituresareexpensed Developmentexpendituresaredeductedata30 ofthepoolperannum Operatingexpendituresaredeductedatarateof10 ofthepoolperannum Unclearwhetherthereanyspecific ringfences onpetroleumrelatedlosses Certaintangiblegoodcostsarecapitalizedandamortized Therearethincapitalizationrules Generaltreatmentofinterest inventoryitems NOLsandgeneraldepreciationrulesrequiresfurtherclarification 2 10 2020 32 CanadaIncomeTax Thefollowingitemsstillrequireclarification Doesthegeneralincometaxapplyoristhereaspecialincometaxregimeapplicabletoincomefromtheextractionandexploitation Whatistherateoftax Isthereasupplementarytaxorchargeonoilprofits Arethereanytaxcreditstooffsetthetax 2 10 2020 33 CanadaGST TheimpactoftheGSTonPetroleumexplorationandexploitationstillrequiresclarification 2 10 2020 34 CountrySpecificAnalysis Indonesia 2 10 2020 35 IndonesiaFormsofAgreement ParticipationinupstreamactivitiescanonlybepossiblepursuanttocontractualengagementswiththeholderoftherelevantOilandGasMiningauthority Thecontractsaretermed CooperationContracts andtheengagingpartyisBPHMigas Indonesia sOilandGasDownstreamRegulatoryAgency BPHMigasischargedwithassuringsufficientnaturalgasanddomesticfuelsuppliesandthesafeoperationofrefining storage transportation anddistributionofpetroleumproducts TheContractorcanbeeitheraforeignorIndonesianincorporatedcompany ThetermofaCooperationContractis30yearsfromthedateofapprovalandtheContractormuststarttheactivitywithin6monthsfromthedateofsigningtheCooperationContract Thetermsstartwithanexplorationperiodof6yearswhichmaybeextendedupto10years 2 10 2020 36 IndonesiaFormsofAgreement WhenaContractor oftenaforeignoilcompany andBPMigasenterintoanagreement thefollowingfeaturesapply Contractorsbearallrisksandcostsofexplorationuntilcommencementofcommercialproduction Ifproductionproceeds Contractorsreceiveashareofproductiontomeetcostrecovery aninvestmentcredit andanafter taxequityinterestoftheremainingproduction Explorationexpensesarerecoverableonlyfromcommercialproduction Contractorisentitledtocostrecoveryforallallowablecurrentcosts includingproductioncosts amortizedexplorationcosts andcapitalexpenditures Aftercommercialproduction Contractormaybeentitledtorecoveraninvestmentcreditrangingfrom17 to55 ofcapitalinvestmentcostsincurredindevelopingcrudeoilproductionfacilities 2 10 2020 37 IndonesiaChoiceofEntity CompanyisataxresidentofIndonesiaifincorporatedordomiciledinIndonesia Foreigncompanydoesnotloseitsstatusasanon residenttaxpayerbyoperatingaPEortaxablebranchinIndonesia butthePEitselfmustassumethesametaxobligationsasaresidenttaxpayer 2 10 2020 38 IndonesiaGeneralPrinciplesofIncomeTaxation Mosttaxresidentcompanies businesses andPEarerequiredtopaymonthlyinstallmentsoftax Calculatedwithreferencetothemostrecentcorporatetaxreturn Taxonthefollowingiscollectedbymeansofwithholdingtax Interest royalties rent dividends prizesandawards insurancepremiumspaidtooffshoreinsurancecompanies gainsonthesaleofpropertyinIndonesia andservicefees includingthosetonon residentconstructionContractors Taxwithheldisaprepaymentoftherecipient sincometaxliabilityiftherecipientisataxresidentofIndonesiaandafinaltaxiftherecipientisanonresident Taxontheincomeofresidenttaxpayerssubjecttofinaltaxisgenerallycollectedbydesignatedwithholdersandtreatedasexemptincomewhichisexcludedfromtheannualtaxreturn 2 10 2020 39 IndonesiaGeneralPrinciplesofIncomeTaxation Taxablebusinessprofitsarecomputedonthebasisofnormalaccountingprinciplesasmodifiedbycertaintaxadjustments Generally adeductionisallowedforallexpendituresincurredtoobtain collect andmaintaintaxablebusinessprofits Lossesmaybecarriedforwardforamaximumof5years However foralimitedcategoryofbusinessesincertainregions theperiodcanbeextendedupto10years Carry backoflossesisnotpossible Taxconsolidationisunavailable 2 10 2020 40 IndonesiaGeneralPrinciplesofIncomeTaxation Taxiswithheldfromdividendsincertaincircumstances Residentcompanies DividendsreceivedfromIndonesiancompaniesbylimitedliabilitycompaniesincorporatedinIndonesia cooperatives andstateorregion ownedcompaniesareexemptfromincometaxifthefollowingconditionsaremet Dividendsarepaidoutofretainedearnings Shareholderholdsatleast25 ofthepaid incapital andShareholderhasan activebusiness otherthantheshareholding Non residentrecipients 20 lowerfortreatycompanies withholdingtax whichisthefinaltaxliabilityofthenon residentrecipient 2 10 2020 41 IndonesiaDeductibleExpenditures Generally adeductionisallowedforallexpenditurestoobtain collect andmaintaintaxablebusinessprofits However severaldeductionsaredisallowed including Benefits in kind e g freehousing Incometaxpayments Taxpenalties Distributionofprofits Expensesrelatingtoincomewhichistaxedatafinalrate Expensesr