Oil Taxation Act 1975 section 1

Petroleum revenue tax

Section 1 establishes petroleum revenue tax (PRT) as a tax on profits from oil extraction under UK licensing, sets the current rate at 0%, defines the chargeable periods, and explains what counts as "oil" for PRT purposes.

• PRT is charged on profits from oil won under licences granted under the Petroleum Act 1998 or the equivalent Northern Ireland legislation, where "oil" covers all substances extracted except methane gas recovered as part of mine safety operations.
• The current rate of PRT is 0%, applied to each participator's assessable profit from a taxable field for each chargeable period, after deducting allowable losses and the participator's share of the oil allowance, subject to a safeguard limit.
• The first chargeable period for a field runs from an unlimited time before the start of the "critical half year" up to the end of that half year, with each subsequent six-month period (ending 30 June or 31 December) being a separate chargeable period.
• The "critical half year" is the first six-month period ending after 12 November 1974 during which cumulative oil production from the field exceeds 1,000 metric tonnes, with gas converted at a rate of 1,100 cubic metres (at 15°C and one atmosphere) per metric tonne.