Fossil Fuel Support - NZL
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NEW ZEALAND: GENERAL METADATA

DATA DOCUMENTATION

GENERAL NOTES

The fiscal year in New Zealand runs from 1 July to 30 June. Following OECD convention, data are allocated to the starting calendar year so that data covering the period July 2005 to June 2006 are allocated to 2005.

PRODUCER SUPPORT ESTIMATE

New Zealand’s fiscal regime applicable to the oil and natural-gas industry combines a corporate income tax and royalty-based taxation. The corporate income tax amounts to 28% of taxable income, where taxable income is defined as any assessable income less deductions and net losses, the latter of which can be carried forward indefinitely. Generally, companies cannot deduct expenditures of a capital nature when incurred. However, deductions for certain exploration and development expenditures of a capital nature are available for oil and natural-gas companies (see Tax Deductions for Petroleum-Mining Expenditures).

Depending on the year of the discovery, different royalty regimes apply. For discoveries made on or after 1995, royalties are set out in detail in the 2005 Minerals Programme for Petroleum and comprise of the following:

·an ad valorem royalty (AVR) component of 5% payable on the basis of either a sales price received or, where there has been no sale or no arm’s length sale, the deemed sales price; and

·an accounting profits royalty (APR) component of 20% payable on the difference between revenue received from the sale of products and the costs of extracting, processing and selling those products up to the point of sale.

In case of an exploration permit, the permit holder is liable to pay only the AVR. For all mining permits with net sales above NZD 1 million, the permit holder is required to calculate for each period for which a royalty return must be provided to both the AVR and the APR, and pay whichever is higher. Typically, AVR is paid in the early years of production as prior costs are netted against revenue and at the end of the field’s life, as production falls. APR is typically paid during the peak years of production of non-marginal fields. In order to encourage exploration for new natural-gas reserves, the government reduced royalty rates from June 2004 through 31 December 2009 (see Reduction in Royalty Payments for Petroleum). For discoveries after 31 December 2009, the same royalty rates that are in operation before 30 June 2004 are applicable.

More generally, royalties are payable for petroleum that is (1) discovered and sold, (2) used in the production process as fuel, (3) exchanged or transferred out of permit boundaries without sale or (3) left unsold at the expiry of the permit (Ernst and Young, 2013). No royalties are payable on petroleum that is flared or returned to natural reservoirs within the permit boundaries (e.g. the re-injection of gas).

In 2008, the government introduced an emissions trading scheme (ETS) for greenhouse gases. Legislation for the scheme has been subsequently amended with the latest enacted in 2012. There are no special exceptions for the oil and gas sector under the current ETS regime.


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Source: OECD, FFS database, 2015

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Sep-15

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Fiscal Year starts on 1 July

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New Zealand Dollar
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Indicator

PSE: Producer Support Estimate

GSSE: General Services Support Estimate

CSE: Consumer Support Estimate

Stage

EXTRACT: Extraction or mining stage

TRANS: Transportation of fossil fuels (e.g., through pipelines)

REFIN:Refining or processing stage

GENER: Use of fossil fuels in electricity generation

INDUS: Use of fossil fuels in the industrial sector

END: Other end uses of fossil fuels

Statutory or Formal Incidence

consumption: Direct consumption

returns: Output Returns

income:Enterprise Income

inputs: Cost of Intermediate Inputs

labour: Labour

land: Land and natural resources

capital: Capital

knowledge: Knowledge

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Database
published : September 2015


These tables are a complement to the report Inventory of Estimates Budgetary Support and Tax Expenditures for Fossil Fuels 2015. They comprise the summary of fossil fuels support expenditures for OECD and BRIICS countries.

Complete documentation by country is available at:

Fossil Fuel Support - NZLAbstract



NEW ZEALAND: GENERAL METADATA

DATA DOCUMENTATION

GENERAL NOTES

The fiscal year in New Zealand runs from 1 July to 30 June. Following OECD convention, data are allocated to the starting calendar year so that data covering the period July 2005 to June 2006 are allocated to 2005.

PRODUCER SUPPORT ESTIMATE

New Zealand’s fiscal regime applicable to the oil and natural-gas industry combines a corporate income tax and royalty-based taxation. The corporate income tax amounts to 28% of taxable income, where taxable income is defined as any assessable income less deductions and net losses, the latter of which can be carried forward indefinitely. Generally, companies cannot deduct expenditures of a capital nature when incurred. However, deductions for certain exploration and development expenditures of a capital nature are available for oil and natural-gas companies (see Tax Deductions for Petroleum-Mining Expenditures).

Depending on the year of the discovery, different royalty regimes apply. For discoveries made on or after 1995, royalties are set out in detail in the 2005 Minerals Programme for Petroleum and comprise of the following:

·an ad valorem royalty (AVR) component of 5% payable on the basis of either a sales price received or, where there has been no sale or no arm’s length sale, the deemed sales price; and

·an accounting profits royalty (APR) component of 20% payable on the difference between revenue received from the sale of products and the costs of extracting, processing and selling those products up to the point of sale.

In case of an exploration permit, the permit holder is liable to pay only the AVR. For all mining permits with net sales above NZD 1 million, the permit holder is required to calculate for each period for which a royalty return must be provided to both the AVR and the APR, and pay whichever is higher. Typically, AVR is paid in the early years of production as prior costs are netted against revenue and at the end of the field’s life, as production falls. APR is typically paid during the peak years of production of non-marginal fields. In order to encourage exploration for new natural-gas reserves, the government reduced royalty rates from June 2004 through 31 December 2009 (see Reduction in Royalty Payments for Petroleum). For discoveries after 31 December 2009, the same royalty rates that are in operation before 30 June 2004 are applicable.

More generally, royalties are payable for petroleum that is (1) discovered and sold, (2) used in the production process as fuel, (3) exchanged or transferred out of permit boundaries without sale or (3) left unsold at the expiry of the permit (Ernst and Young, 2013). No royalties are payable on petroleum that is flared or returned to natural reservoirs within the permit boundaries (e.g. the re-injection of gas).

In 2008, the government introduced an emissions trading scheme (ETS) for greenhouse gases. Legislation for the scheme has been subsequently amended with the latest enacted in 2012. There are no special exceptions for the oil and gas sector under the current ETS regime.


http://www.oecd.org/site/tadffss/http://www.oecd.org/site/tadffss/Country notesftp://agrpub:public@ftp.oecd.org/FFS2015/NZL_country overview.pdfSourcesftp://agrpub:public@ftp.oecd.org/FFS2015/NZL_sources.pdf
Contact person/organisation

ffs.contact@oecd.orgmailto:ffs.contact@oecd.orgName of collection/source

Source: OECD, FFS database, 2015

Unit of measure usedNew Zealand DollarPeriodicity

Fiscal Year starts on 1 July

Date last updated

Sep-15

Key statistical concept

Indicator

PSE: Producer Support Estimate

GSSE: General Services Support Estimate

CSE: Consumer Support Estimate

Stage

EXTRACT: Extraction or mining stage

TRANS: Transportation of fossil fuels (e.g., through pipelines)

REFIN:Refining or processing stage

GENER: Use of fossil fuels in electricity generation

INDUS: Use of fossil fuels in the industrial sector

END: Other end uses of fossil fuels

Statutory or Formal Incidence

consumption: Direct consumption

returns: Output Returns

income:Enterprise Income

inputs: Cost of Intermediate Inputs

labour: Labour

land: Land and natural resources

capital: Capital

knowledge: Knowledge

Recommended uses and limitations




Database
published : September 2015


These tables are a complement to the report Inventory of Estimates Budgetary Support and Tax Expenditures for Fossil Fuels 2015. They comprise the summary of fossil fuels support expenditures for OECD and BRIICS countries.

Complete documentation by country is available at: