In its 2013-2014 annual report, APPEA said it was placing a “high priority” on resolving the complexity and uncertainty associated with defining “excluded expenditure”

It also wants to ensure that the Australian Tax Office’s future compliance activity is undertaken on a systems basis rather than through the verification of all source documents held by companies.

APPEA also said it wanted to simplify the compliance obligations on smaller companies in the industry; while also addressing the potentially negative impacts that aspects of the transitional PRRT provisions are having on some onshore projects.

In doing so, APPEA wants to have introduced a “barrel of oil equivalent” exemption from PRRT for new onshore projects.

APPEA is also playing a waiting game on the government actually making headway on addressing the compliance and interpretive “challenges” posed by extending the PRRT onshore.

The group said the PRRT still posed challenges for companies regardless of whether production existed or if a tax liability would ever be incurred.

“In late 2013, the government committed to addressing the growing administrative burden. APPEA is now pressing to see real movement in implementing this commitment,” it said.

As the federal government has now committed to applying the PRRT to all upstream oil and gas operations in Australia – with the ATO having consulted with APPEA on this – the lobby group believes the excise regime needs to go, especially in areas where no liability exists.

“As part of its 2014-15 pre-federal Budget submission, APPEA has sought the abolition of the existing crude oil and condensate excise regime for production sourced from all areas onshore and from fields within state waters areas,” the group said.

“Removing the excise regime would also be consistent with the government’s commitment to remove unnecessary and duplicated red tape.”

APPEA has also engaged the ATO in discussions expected to extend over the next year to clarify the scope and definition of “exploration” for income tax purposes.

“APPEA advocates a definition that reflects that exploration is intended to generate commercially recoverable reserves of oil and gas,” the group said.

Queensland was the only state APPEA targeted where the petroleum royalty regime needed reform, with consultations underway with the Office of State Revenue on the regime’s administrative aspects, which included clarifying the imposition of penalties, along with its policy and interpretive provisions.