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PRT, not for the otherwise generally applicable U.K. corporation
tax.
In order to provide uniform administration of the Ring Fence
Tax and PRT, in 1975 the Oil Taxation Office of the U.K. Inland
Revenue was established and was delegated that responsibility.
The fees and royalties due under the licenses issued by the
United Kingdom to Exxon and other oil and gas companies regarding
the North Sea were not modified, supplemented, or altered by the
PRT that was enacted in 1975.
Gross income relating to North Sea oil and gas recovery
activities, with limited exceptions, constitutes the tax base for
PRT, and losses relating to activity outside the North Sea ring
fence are not allowed to offset income from activity occurring
within the North Sea ring fence. PRT is imposed on income
relating to extraction of oil and gas from the North Sea, income
earned by taxpayers providing transportation, treatment, and
other services relating to oil and gas resources in the North Sea
(tariff receipts), and income relating to sale of North Sea
assets (disposal receipts).
Interest income, income from sales of purchased and resold
crude oil, and income relating to sale of gas exempt from PRT
liability are not included in the income base for PRT purposes.
In computing net profits for PRT purposes and on which PRT
liability is calculated, all significant costs and expenses,
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