Gas exploration tax change to cover development
Gas exploration tax change to cover development, seismic ships
The Government is to extend a recently announced tax measure to cover drilling rigs undertaking gas field development work and to seismic survey ships involved in gas exploration, Revenue Minister Michael Cullen announced today.
As part of a package of measures to boost gas exploration in New Zealand over the next five years the Government announced last month that it would legislate to remove a tax obstacle by temporarily lifting the ‘183-day rule’ for offshore rig operators.
The Government is now extending the tax exemption to include development drilling and non-resident operators of seismic survey ships.
“These operators can face problems similar to those of rigs undertaking exploration work,” Dr Cullen said.
The change will be included in a taxation bill to be introduced in November.
Dr Cullen also clarified detail surrounding changes to the 183-day rule.
He said “the change will not include employees or contractors of rigs, resident drilling rig operators, onshore drilling rig operators or supply or support vessels that service the rigs while in New Zealand and, in some cases, bring the rigs to New Zealand.”
The change now means non-resident offshore rig operators and non-resident operators of seismic survey ships will be exempted from paying company tax on their profits in New Zealand from 30 June 2004 to 31 December 2009.
This is the same period applying to the gas exploration royalty incentives announced on 14 June.