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PRT, and for payments of tax that should have been paid by
foreign contractors providing services to the taxpayer in the
North Sea.
Under PRT, operating losses from any period are carried back
or carried forward without limit to income associated with the
field.
Additional prominent features of PRT, as originally enacted
and as amended over the years, may be described generally as
follows:
(1) As an incentive to development of marginal North
Sea fields, an “oil allowance” or exemption from PRT is
allowed for each field in an amount equivalent to the
value of 500,000 metric tons of oil per 6-month period
up to a total of 10 million metric tons over the life
of the field;4
(2) A tariff receipts allowance is allowed, which for each
6-month chargeable period exempts from PRT tariff receipts
attributable to transportation of up to 250,000 metric tons
(i.e., up to 1,875,000 barrels) of oil from each field);
(3) Various nonfield-specific expenses are deductible
against income from a field (e.g., exploration,
appraisal, and research expenses);
(4) As a limit on the amount of PRT that would be
owed, a “safeguard” provision limits the amount of PRT
payable in each 6-month period in which it applies
except to the extent that adjusted profits from a field
exceed 15 percent of accumulated capital investment in
a field and then PRT only applies to 80 percent of such
adjusted profits;
4 Over the life of each field, the oil allowance or exemption
varied from 75 to 35 million barrels of crude oil.
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