The latest ATO corporate tax data presents a mixed outlook for Australia’s gas industry. While there is progress in corporate tax transparency, concerns persist regarding the Petroleum Resource Rent Tax (PRRT) and its effects on offshore gas resources. The 12th year of this data reveals ongoing challenges, despite some improvements.
The FY 2024-25 data reveals the initial impact of the Labor government’s PRRT reforms, which cap deductions at 90% of production value. Consequently, 90% of offshore gas production remains exempt from PRRT, with the tax applied to only 10%. This structure has been criticized for failing to generate adequate public returns from Australia’s vast offshore gas resources.
LNG Exports Surge, But PRRT Revenue Stays Low
LNG exports reached a record $65 billion in 2024-25, yet the PRRT revenue was less than $1.9 billion, representing under 3% of export value. This disparity exists despite the PRRT rate being set at 40% of raw gas value. The surge in LNG exports, driven by global demand and geopolitical tensions, highlights the urgency for reform to ensure Australia captures a fair share of the revenue.
Given the ongoing conflict in the Middle East, Australia‘s LNG exports, already among the highest globally, are projected to increase further. However, the current PRRT structure indicates that Australia’s share of this revenue will likely remain limited, raising questions about the fairness of the system.
Chevron: Illustrating Profit Margins and Tax Contributions
Chevron, Australia’s top gas producer, serves as a prime example of this trend. Following a High Court loss in 2017 related to a profit-shifting scheme, Chevron now pays substantial corporate income tax, totaling $2.9 billion in 2024-25. This marks a significant shift from its previous tax practices.
In contrast, its PRRT payment for the same period was only $167 million, less than 1% of its $17.3 billion total income. This stands in stark contrast to its 57% profit margin, one of the highest among Australia’s leading 100 corporations. Chevron’s taxable income exceeded $9.8 billion, showing its exceptional profitability in the Australian market.
Although Chevron’s tax payments have risen, its PRRT contribution remains minimal, fueling ongoing debates about the fairness of Australia’s gas resource taxation system. The company’s profit margin is only surpassed by a few entities, including a BHP Iron Ore subsidiary at 61%, Hancock Prospecting at 76%, and a Rio Tinto subsidiary at nearly 143%.
Chevron’s Global Tax Practices and Australia’s Resource Sector
Chevron’s global tax practices highlight a significant difference between its payments in Australia and other countries. According to its 2025 global resource extraction payment report, Chevron paid more taxes in Australia than in any other country except Canada. This is despite Australia being its second-largest production hub, accounting for nearly 13% of its global production with 472 thousand barrels of oil-equivalent per day.
In Canada, Chevron also paid substantial royalties, amounting to $359 million. In contrast, Australia received no royalties from Chevron, despite its massive production volumes. Chevron’s U.S. tax payments were relatively low, at $143 million, but it paid over $1 billion in royalties there, with 57% going to the federal government for offshore wells in the Gulf of Mexico.
Reforms and Future Initiatives
The report shows the necessity for additional PRRT reforms, which have faced criticism for failing to generate adequate public returns. Proposed measures, such as a 25% export levy on LNG, aim to secure a more equitable return for Australians. These reforms are key as LNG prices spiked to $90 billion in 2022-23 following Russia’s invasion of Ukraine, highlighting the industry’s profitability.
