The bill contains provisions that amend the tax treatment of petroleum mining.
Provisions relating to deductions for expenditure on petroleum mining undertaken via a branch in another country look to ensure that New Zealand receives its proper share of benefit from New Zealand petroleum resources, by preventing foreign branch petroleum mining expenditure being offset against income in New Zealand.
Other provisions look to remove disincentives that may affect investment in oil and gas exploration and development in New Zealand.
Ten submissions were received on the amendments. Most supported the modernisation of the petroleum mining tax rules, but raised some concerns around the practical application of the new rules. Generally, submissions did not support the proposed ring-fencing amendment.