Page 12 - March 2018 Newsletter

In addition, they should clarify the Specifically, rejecting the state's Further, the IAGC believe this added
interrelationship between the arguments that the new information analysis will establish for the ATO, that
authorities delegated to the Service demonstrates substantially different the costs associated with multi-client
by statute and the application of the effects on coastal uses and
policy on private sector stakeholders. resources and further providing data collection and processing are
arguments supporting our position immediately deductible for tax
The IAGC's full comments are declining the request. purposes.
available below:
The week of 12 February, the IAGC
FWS-HQ-ES-2017-0074 Australia Austral Committee met with Australian
FWS-HQ-ES-2017-0075 officials at the ATO, the Department of

IAGC Submits Comments on Industry, the Ministry for Resources,
North Carolina Australia Draft Taxation Ruling and the Department of Treasury to
further explain our comments and
Atlantic G&G Permit opposition to the draft ruling, as
Applicants Submit Letters On 9 February, the IAGC submitted proposed. IAGC is also engaged with oil
Opposing NC "Supplemental comments regarding draft Taxation and gas trade association APPEA, who
Ruling TR 2017/D11 Income tax:
has offered their support in contacting
Consistency Certification" capital allowances: expenditure government officials to ensure a
incurred by a service provider in positive outcome for the seismic
On 22 December 2017, the North collecting and processing multi-client industry.
Carolina Division of Coastal seismic data (TR 2017/D11). The
Management (DCM) sent letters to draft Taxation Ruling interprets that The IAGC and NERA Strive to
Atlantic seismic permit applicant multi-client data acquisition should Improve Environmental
companies requesting submission of be accounted as a capital asset with a Approvals and Energy Policies
a "supplemental consistency 15 year depreciating life, instead of a
certification in accordance with 15 taxable expense, and that the change
CFR 930.66." The state claims in interpretation will be retroactive to In a recent meeting with the National
"significant new circumstances and 2013. Energy Resources Australia (NERA), the
information" provided in their letter IAGC encouraged streamlining of
in making the request. Many of the environmental approvals for seismic
studies cited in the letter have been IAGC continues to have serious surveys, as well as pursuing energy
previously analyzed by IAGC concerns regarding the Australian policies that support regulatory
through comments and internal Taxation Office's (ATO's) views of certainty. NERA has a remit to increase
review. the taxation of multi-client seismic Australia's competitiveness in relation
data and the significant impact this to oil and gas activities, even though
Upon IAGC's review of the scientific will have on multi-client activities and Australia is recognized as a relatively
papers cited by North Carolina, IAGC exploration in Australia, especially if expensive place to do business, mainly
and applicant-members concluded applied retroactively. due to an increasingly uncertain and
that supplemental certification was expensive environmental approval
not appropriate. It is the view of the IAGC that the processes.
application of the Australian tax law

Over the past month, Atlantic to the full business model of multi- NERA's goal is to create and receive
applicants sent letters to North client companies requires a deeper NOPSEMA approval of 5-year
Carolina and BOEM, respectively, analysis of the purpose, activities and Environmental Plans (EPs) that cover
rejecting the request for risks undertaken by multi-client each "environmental region" so that all
supplemental consistency. companies. exploration activities can use that
single approval whenever required.

12 The IAGC Newsletter | In Depth