LONDON, Aug. 2, 2017 /PRNewswire/ -- Governments around the world continue to reassess their tax structures to pursue more strategic objectives despite many having already made essential tax adjustments in response to a low oil price environment, EY says while launching its 2017 Global oil and gas tax guide.
The guide, which summarizes the oil and gas corporate tax regimes in 87 countries, highlights national tax structures and changes made over the last year.
Alexey Kondrashov, EY Global Oil & Gas Tax Leader, says:
"With relative market certainty and a lower-for-longer oil price consensus throughout the sector, attracting oil and gas investment is back on the agenda of several governments. To stay competitive, many countries are evaluating new tax concepts rather than just reducing rates."
Tax systems in Canada and Mexico are among the most recent to undergo additional changes. In Canada, oil and gas royalties in Alberta have been reviewed. In Mexico, the Government has addressed feedback from companies bidding for oil and gas blocks as part of their ongoing energy reform and made modifications to the fiscal and economic terms of license and production sharing contracts to enhance attractiveness.
Meanwhile, Saudi Arabia has issued a Royal Decree to reduce the corporate income tax rate from 85% to 50% for upstream oil and hydrocarbon producing companies, which could set a new benchmark for attracting foreign investors that, for many countries, may not be easy to meet. Major resource-rich countries in the Middle East and Asia-Pacific are pursuing a similar agenda.
Kondrashov says: "Tax-take remains one of the top considerations for oil and gas investors. Governments of oil- and gas-producing countries must monitor tax structures and revise them accordingly in an era of lower commodity prices and volatility, particularly as some major producing countries have made important adjustments to attract capital. Maintaining investment and interest in oil and gas projects in any country requires a clear fiscal policy and a tax regime that provides competitive returns to investors."
Notes to Editors
About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.
How EY's Global Oil & Gas Sector can help your business
The oil and gas sector is constantly changing. Increasingly uncertain energy policies, geopolitical complexities, cost management and climate change all present significant challenges. EY's Global Oil & Gas Sector supports a global network of more than 10,000 oil and gas professionals with extensive experience in providing assurance, tax, transaction and advisory services across the upstream, midstream, downstream and oil field subsectors. The Sector team works to anticipate market trends, execute the mobility of our global resources and articulate points of view on relevant sector issues. With our deep sector focus, we can help your organization drive down costs and compete more effectively.
For more information, please visit ey.com/oilandgas.
About the guide
The Global oil and gas tax guide summarizes the oil and gas corporate tax regimes in 87 countries and also provides a directory of EY oil and gas tax contacts. The content is based on information current to 1 January 2017, unless otherwise indicated in the text of the chapter.
Sarah Shields
EY Global Media Relations
+1 604 891 8235
[email protected]
SOURCE EY
Share this article