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increased operating costs were becoming a disincentive to North
Sea oil and gas development activity.
As a result of the above increases and decreases in world
oil prices and the changing perceptions regarding PRT and the PRT
rate, in 1979, 1980, 1982, and 1993 the tax rate for PRT was
changed from the original rate of 45 percent as enacted in 1975
to the rates indicated:
1979 1980 1982 1993
PRT Rate 60% 70% 75% 50%
In 1993, PRT was eliminated for all subsequent North Sea oil
and gas activity under licenses to be issued thereafter, and, as
indicated, the PRT rate was reduced to 50 percent for existing
licenses.
For 1975 through 1988, Exxon paid �3.5 billion in PRT,
approximately 11 percent of the approximate total �32 billion in
PRT that was paid to the United Kingdom by all oil and gas
companies for those years.
Because primarily of timing differences associated with
calculations of PRT at the field level and because PRT was
deductible in computing the Ring Fence Tax, for any 1 year
companies may owe PRT but no Ring Fence Tax, they may owe Ring
Fence Tax but no PRT, and they may owe both PRT and Ring Fence
Tax or neither. These differing results are not inconsistent
with the objective of PRT to tax extraordinary profits and to
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