Mexico



Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

Guyana agrees to pay ExxonMobil's tax out of nation's share of profit oil -IMF

 


By Abena Rockcliffe-Campbell

GEORGETOWN
Petroleumworld 05 07 2018

While government continues to give the nation the impression as if it will be benefitting from an equal share of profit oil, the truth is, Guyana will be getting much less.

The nation will be made to pay ExxonMobil's Corporate Income Tax (CIT) to the Guyana Revenue Authority (GRA). This money will come from Guyana's share of profit oil.

In a technical assistance report that the International Monetary Fund (IMF) handed to the Government of Guyana last year, the regulatory body noted that according to the Guyana Geology and Mines Commission's published minimum terms, the contractor's CIT liability is paid out of the government share (also known as pay-on-behalf system). In other words, the government share of profit oil/gas is inclusive of CIT and, therefore, the contractor (ExxonMobil) does not have to make separate CIT payments.

IMF said that since the CIT is included in the government share of profit oil, “this implies a ring-fence around the contract area for CIT purposes.”

The IMF said that while this arrangement is not unique to Guyana, 50 percent is a low share to be given to a government that still has to pay taxes on behalf of the company.

“This type of arrangement is also called post-tax production sharing, as the profit oil sharing is inclusive of CIT. An advantage of this approach is that it provides a measure of fiscal stability for companies, while protecting the government from abusive CIT planning as companies do not gain from engaging in such activities.”

However, the IMF said that “When this type of production sharing is used, usually the government share of profit oil/gas is higher than what the share would be if the contractor were separately liable for CIT. In the case of Guyana, this implies that the fixed 50 percent share is relatively low.”

That type of “pay on behalf” arrangement is employed in countries such as Egypt, Qatar, Sudan, Libya and Trinidad and Tobago.

The Production Sharing Agreement (PSA) signed in 2016 between Guyana, ExxonMobil and its partners says, “The Contractor shall provide the Minister with the Contractor's Income Tax returns to be submitted by the Minister to the Commissioner General, Guyana Revenue Authority so the Minister can pay income tax on behalf of the Contractor as provided under Article 15.4 (a).”

It continued, “On such returns, the Minister shall note that he is paying the income taxes on behalf of the Contractor, so that the Commissioner General, Guyana Revenue Authority can properly prepare the receipts required under this Article 15.5. Within one hundred and eighty (I80) days following the end of each year of assessment, the Minister shall furnish to the Contractor proper tax certificates in Contractor's name from the Commissioner General, Guyana Revenue Authority evidencing the payment of the Contractor's income tax.”

Petroleumworld.com

Hit your target - Advertise with Us

Story by Abena Rockcliffe-Campbell from Kaieter News

Kaieteurnewsonline.com
05 07 2018

We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

November 13 - 15, 2018.

Gubkin University, Moscow
SPE Student Chapter

 

 

 

 

 

 

 

 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld ™  / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.