Finance Bill ‘ignores oil and gas tax concerns’

The Government has used the Finance Bill to rubber-stamp its long-since mooted broader tax terms for exploration firms with Irish offshore interests, despite widespread calls for a revision of the proposals in light of depressed oil prices.

The new petroleum production tax, which was first proposed in mid-2014 and formally introduced yesterday, will see the top rate of tax on profits made from any future oil/gas finds in Irish waters go from 40% to 55%, with an additional 5% royalty revenue payable to the State for each year of a producing field’s lifespan.

Although the terms were proposed before the oil price sank to $50 per barrel, the Government has said that the analysis was based on a $60+ environment, not a $100 per barrel environment. The terms are based on advice from energy consultants Wood McKenzie.