What are tax-exempt tariffing receipts under Oil Taxation Act 1983 section 6A?

Tax-exempt tariffing receipts are amounts earned by oil field participators for allowing others to use their infrastructure, such as pipelines or platforms, which are excluded from the petroleum revenue tax charge. To qualify, the receipt must arise under a contract entered into on or after 9 April 2003 and relate to a new field, qualifying existing field or UK recommissioned field.

What conditions must be met for a tariffing receipt to be exempt from petroleum revenue tax?

Three conditions must all be satisfied. The amount must otherwise be a tariff receipt of a participator in an oil field. It must be received in a chargeable period ending on or after 30 June 2004 under a contract entered into on or after 9 April 2003. Finally, the receipt must be in respect of tax-exempt business connected with a qualifying field type.

What is a new field for the purposes of section 6A of the Oil Taxation Act 1983?

A new field is any oil field, whether located in the United Kingdom or in a foreign jurisdiction, for which no development consent had been granted and no programme of development had been served on or approved for a licensee before 9 April 2003. Fields receiving their first development consent on or after that date qualify as new fields.

Does the section 6A exemption apply to foreign fields and transmedian fields?

Yes, the exemption extends to infrastructure use connected with foreign fields — hydrocarbon accumulations outside UK jurisdiction. For transmedian fields straddling the UK boundary, the foreign sector is treated as a separate foreign field and the UK sector as a separate oil field, each assessed independently for exemption purposes under section 6A.

Oil Taxation Act 1983 section 6A

Tax-exempt tariffing receipts

Section 6A provides that certain tariffing receipts — income earned from allowing others to use oil infrastructure — are exempt from petroleum revenue tax when linked to new fields, qualifying existing fields or recommissioned fields.

Tariffing receipts that qualify as "tax-exempt" are excluded from the petroleum revenue tax charge, meaning they are not treated as tariff receipts under the Oil Taxation Acts.
To qualify, the receipt must arise under a contract entered into on or after 9 April 2003, be received in a chargeable period ending on or after 30 June 2004, and relate to tax-exempt business.
Tax-exempt business means income from the use of a qualifying asset (or services connected with such use) where that use relates to a new field, a qualifying existing field or a UK recommissioned field.
A new field is one for which no development consent or programme of development had been granted or served before 9 April 2003, whether it is a UK oil field or a foreign field.

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