Back Matter

Back Matter

Author(s):
Jack Calder
Published Date:
July 2014
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References

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Index

Page numbers followed by n or t refer to footnotes or tables, respectively.

A

  • Abandonment costs, 9, 86
  • Accounting periods, 38–39
  • Accounting system issues, 48, 55, 96
  • Administrative capacity
    • funding and autonomy and, 66–67
    • information management and, 66
    • introduction to, xi, 61–62
    • performance management and, 65–66
    • private sector’s role in, 67
    • recruitment practices, 63–64
    • reforms implementation and, 67–68
    • salary structures and, 63
    • staffing requirements and, 62–63
    • training issues, 64–65
  • Anticorruption strategy, 58
  • Appeals and dispute resolution, 49, 58
  • Arm’s-length principle, 70–76, 78–82
  • Artisanal mining, 4, 43
  • Auditing
    • adjustments related to, 48, 93
    • aggressive and unfair, 46
    • CIT and, 46
    • integrity issues and, 57
    • joint or collaborative, 34
    • nonroutine functions, 45–49
    • nontax, 47
    • payment in kind and, 42
    • physical, 29, 45, 64
    • recruitment practices for, 64
    • risk assessment, 47, 96
    • specialized skills for, 16
    • streamlined procedures and, 55–56
    • tax design and, 20
    • of tax returns, 46
  • Average prices, 72, 75

B

  • Back-loaded costs, 9, 86
  • Benchmark prices
    • establishing, 45–46
    • mineral valuation and, 79
    • natural resources and, 5
    • special expertise for, 5
    • tax department and, 29
    • tax design and, 19
    • valuation rules and, 73
  • Bribes, 58, 63
  • Budget processes, 23, 54, 55

C

  • Capital expenditure, 85–86
  • Capital gains, 48, 87
  • Capital investment, 8–9, 12
  • Change management, 67–68
  • Commercial risk-sharing agreements, 10–11
  • Community service, 24, 27
  • Compliance strategy, 26, 27, 43
  • Concessionary regimes, 13, 41
  • Consortium agreements, 10–11
  • Consumption incentives, 89
  • Corporate income tax (CIT)
    • auditing issues, 46
    • foreign tax credit and, 9, 28
    • production sharing regime and, 28
    • RRT and, 20
  • Corruption issues, 14, 63
  • Cost allocation, 48, 84
  • Customs import exemptions, 88

D

  • Deepwater Horizon accident, 6
  • Depreciation, rules for calculating, 86
  • Depreciation rates, 21, 47, 64
  • Developing economies
    • exports and import issues and, 10
    • information technology in, 66
    • royalty issues, 19
    • transfer pricing rules in, 71
  • Development expenditure, 85
  • Dividends, 23, 24
  • Dollar accounting and payment, 36, 41, 66
  • Domestic processing, 89
  • Double taxation, 5n, 73, 88
  • Downstream operations, 1, 69, 70, 74, 75
  • “Dutch disease,” 51n

E

  • Electronic filing and payment, 42
  • Equity participation
    • disclosure of, 53
    • full, carried and free, 12
    • government, 23–24, 53
    • risks related to, 12
    • tax administration and, 14
  • Exploration expenditure, 85
  • Exports and imports issues, 10
  • Extraction rights, 2–3
  • Extractive Industries Transparency Initiative (EITI)
    • focus of, 56–57
    • payment in dollars and, 10
    • phases of, 56
    • purpose of, x
    • self-assessment and, 37–38
    • support for, 56

F

  • “Farm-outs,” 87
  • Financing
    • costs, 81–82
    • for natural resources, 7
    • tax treatment of, 8–9
  • Fiscal decentralization, 26, 30
  • Fiscal legislation, scattered, 53
  • Fiscal policy issues, 8, 18, 25
  • Fiscal provisions, badly designed, 21–22
  • Foreign currency accounting, 41
  • Foreign tax credit, 9, 28

G

  • Gas valuation, 75–76
  • General tax administration, 28, 31, 35, 62, 64, 66
  • Geographic concentration issues, 9–10
  • Governance and transparency
    • assurances of integrity and, 57–59
    • clarity of roles and, 52–54
    • introduction to, x–xi, 51–52
    • investments and, 52
    • open budget processes and, 54
    • public availability of information and, 54–57
    • See also Natural resource revenue administration
  • Governments
    • anticorruption strategy by, 58
    • equity participation, 23–24, 53
    • investment incentives by, 8, 9
    • provincial and local, 30–31
    • stability agreements by, 9, 21, 52
    • subsidies by, 10
    • See also National resource company (NRC); Natural resource taxes
  • Guidance and training materials, 65
  • Guide on Resource Revenue Transparency (GRRT)
    • assurances of integrity and, 57–59
    • clarity of roles and, 52–54
    • open budget processes and, 54
    • public availability of information and, 54–57
  • Guide to Resource Revenue Transparency, 14

H

  • Hedging
    • gains and losses, 82–83
    • natural resource prices and, 7

I

  • Indirect transfer, 87
  • Information technology (IT), 33, 66, 96
  • Infrastructure development, 3, 24, 44, 83n
  • In-kind public revenue, 3, 13, 15, 42, 93
  • Integrated tax administration system (ITAS), 66
  • Interdepartmental task forces, 33
  • Interest
    • automatically charging of, 40
    • disguised, 82
    • financing costs and, 81–82
    • for tax audit adjustments, 48
  • International training courses, 65
  • Investment
    • allowances, 86
    • governance and transparency issues, 52
    • incentives for, 8, 9
    • tax holidays and, 85
  • In-year installments, 39, 79

J

  • Joint ventures
    • agreements, 10–11, 23
    • audits, 47–49
    • transfer pricing issues, 80

K

  • Key performance indicators (KPIs), 58, 97, 98, 99

L

  • Large taxpayer office (LTO), 31, 32, 62–63, 97–99
  • Late payments, 36, 37, 40
  • Legal and policy framework, 14–15, 57–58
  • License agreements, 2, 44
  • License rights, 3
  • License transfers, 11, 87
  • Licensing procedures, 52
  • Liquefied natural gas (LNG), 75
  • Local government responsibilities, 30–31
  • London fixing price, 78

M

  • Managing Natural Resource Wealth Topical Trust Fund (MNRW-TTF) program, 51, 52
  • Mineral valuation, 76–80
  • Mining projects
    • capital expenditure, 86
    • long operating period for, 9
    • no-profit rule for, 81
    • physical auditing of, 29
    • profitability issues, 4
  • Mining shadow economy, 43
  • MNRW-TTF program, 51, 52

N

  • National resource company (NRC)
    • government equity and, 23
    • integrated administration by, 28–29
    • integrity issues, 58–59
    • ownership structure, 12, 53–54
    • payment in kind and, 41–42
    • physical audit issues, 45
    • responsibilities of, 30, 54
    • special considerations for, 44
    • special taxes and, 21
    • tax design and, 19
    • tax procedure codes and, 36
  • Natural resource revenue administration
    • accounting system issues, 48, 55, 96
    • challenges to, 8
    • combating corruption in, 14
    • consequences for, 14–15
    • evaluating and strengthening, 15–16
    • exploration risks and, 6
    • fiscal policy issues, 8, 18, 25
    • fragmented, 27–28, 53
    • funding for, 66–67
    • in-house capacity for, 67
    • information exchange issues, 32–33
    • integrated, 26–27, 33–34
    • for joint ventures, 11
    • legal and policy framework for, 14–15, 57–58
    • organization of, 26, 31–32, 34
    • special tax deals and, 7–8
    • staffing requirements for, 62–63
    • training and skills for, 64–65
    • transparency issues, 35
    • See also Procedures
  • Natural resources
    • benefits from, 51–52
    • capital expenditure, 85–86
    • capital investment for, 8–9
    • commercial participation in, 12
    • contracts, 52, 53
    • exports and imports issues, 10
    • features of, 2
    • financing for, 7
    • fiscal provisions, 21–22
    • geographic concentration issues, 9–10
    • license agreements for, 2, 44
    • license interests transfer, 11
    • long operating period for, 9
    • nonrenewability of, 2–4
    • policy and administration, 25t
    • poor governance, 14
    • prices of, 7, 10, 59, 72, 82
    • rent-generating potential of, 4–6
    • revenue report, 97–100
    • risk-sharing arrangements, 10–11
    • scale and profitability of, 4
    • state control and ownership, 11–14
    • taxpayers, 37, 62, 97, 99
    • uncertainty and risk issues, 6–8
    • valuation of, 45, 46
  • Natural resource taxes
    • accounting periods for, 38–39
    • administrative regime for, 42
    • allocating payments against, 40–41
    • appeals and dispute resolution for, 49
    • capital expenditure and, 85–86
    • complexity of, 20–21
    • consumption incentives and, 89
    • customs import exemptions and, 88
    • double tax agreements and, 88
    • economic models for, 95–96
    • financing costs and, 81–82
    • frequency of installments of, 39–40
    • gas valuation and, 75–76
    • hedging and, 82–83
    • implementation of, 19–22
    • license transfers and, 87
    • mineral valuation and, 76–80
    • oil valuation and, 74–75
    • payments for, 92
    • point of valuation and, 69
    • pricing basis and, 69–70
    • refund procedures, 41
    • ring-fencing of costs and, 84–85
    • separate returns for, 39
    • social infrastructure costs and, 86–87
    • streamlining and harmonizing, 91–93
    • tax deductibility of costs and, 83–84
    • tax holidays and, 85
    • transfer pricing and, 70–72, 80–81
    • unitizations and redeterminations and, 88
    • valuation rules and, 73
  • Netback pricing, 71
  • Net smelter return (NSR), 79, 80
  • Non-arm’s-length transactions, 7, 22, 45, 71–75, 80, 83
  • Noncash consideration, 87
  • Nonrenewable resources, 3, 4, 75
  • Nonroutine functions
    • appeals and dispute resolution, 49
    • audit, 45–49
    • benchmark pricing, 45–46
    • enforcement, 44
    • risk assessment and management, 42–43
    • segmentation and compliance strategy, 43
    • taxpayer services, 44–45
  • Nontax agencies, 16, 27, 62
  • Nontax audits, 47
  • Nontax reforms, 43
  • Nontax revenues, 23–24
  • No-profit rule, 80, 81
  • Nuisance taxes, 21, 31

O

  • Obsolescing bargain, 9
  • Oil valuation, 74–75
  • One-off agreements, 7, 8
  • Open budget processes, 54
  • “Ordinary and necessary” costs, 83
  • Organization and cooperation
    • among agencies, 26
    • exchange of information and, 32–33
    • fragmented administration and, 27–28
    • integrated administration and, 28–29, 33–34
    • introduction to, x, 25–26
    • tax department and, 26–27, 29–31
  • Organization for Economic Cooperation and Development (OECD), 5, 80, 81

P

  • Payment in kind, 13, 38, 41–42
  • Penalties
    • for nonfiling, 40
    • for nonpayment of royalties, 36n
    • for tax audit adjustments, 48
    • for in-year installments, 39
  • Performance management, 65–66
  • Petroleum extraction
    • capital expenditure, 85
    • physical auditing of, 29
    • PSAs and, 13
    • royalty issues, 2–3
    • transfer pricing issues, 80
    • uncertainty and risk issues, 6
  • Physical auditing, 29, 45, 64
  • Point of valuation, 69, 74, 76
  • Policy and legal issues
    • implementation of taxes and, 19–22
    • introduction to, ix–x, 17
    • nontax revenues and, 23–24
    • tax administration and, 18–19
    • taxation law accessibility and, 17–18
    • See also Governance and transparency
  • Poor governance, 14, 51, 52
  • Preference shares, 24, 82
  • Private sector
    • role of, 67
    • salary structure, 63
  • Procedures
    • introduction to, x, 35
    • nonroutine functions, 42–49
    • routine functions, 37–42
    • tax procedure codes, 36–37
  • Production expenditure, 85
  • Production sharing agreements (PSAs)
    • CIT and, 28
    • nontax revenues and, 23
    • NRC and, 30
    • payment in kind and, 41
    • for petroleum production, 13
    • tax appeals and, 49
    • tax procedure codes and, 36
    • transfer pricing and, 75
  • Profit-shifting, 5, 70, 85
  • Provincial government responsibilities, 30–31
  • Public availability of information, 54–57

R

  • Recruitment practices, 63–64
  • Redetermination process, 88
  • References prices, 73, 74, 99
  • Refund procedures, 41
  • Rent taxes, 4–6, 19, 70
  • Resource curse, 51
  • Resource rent taxes (RRT), 4, 20t, 39, 46, 79, 91
  • Ring-fencing of costs, 5–6, 84–85
  • Risk assessment and management, 42–43, 47
  • Risk-sharing agreements, 10–11
  • Routine functions
    • noncompliance with, 43
    • registration, 37
    • self-assessment, 37–38
    • simplifying, 38–42
  • Royalties
    • complexity of, 7
    • deferral payment of, 44
    • description of, 2
    • fiscal authority issues, 53
    • mineral valuation and, 78
    • oil values for, 74
    • penalty for nonpayment of, 36n
    • petroleum extraction and, 2–3
    • versus profit and rent taxes, 19–20
    • reliance on, 6
    • tax return issues, 39, 46
    • valuation, 19, 77, 78, 79

S

  • Salary structures, 63
  • Self-assessment
    • benefits of, 18, 37–38
    • compliance strategy and, 43
    • tax return, 91, 92
  • Social infrastructure costs, 86–87
  • Special tax deals, 7–8
  • Spot prices, 74, 75, 76
  • Stability agreements, 9, 18, 21, 22, 35, 52
  • Staffing requirements, 62–63, 65
  • State contract regime, 13–14
  • State control and ownership, 11–14
  • Stripping costs, 86
  • Sunk costs, 9

T

  • Tax administration, 14, 18–19
  • Taxation law, accessibility of, 17–18
  • Tax auditing. See Auditing
  • Tax deductibility of costs, 83–84
  • Tax department
    • integrated administration by, 26–27
    • responsibilities of, 29–31
    • See also Natural resource revenue administration
  • Tax depreciation, 21, 85, 86, 95
  • Tax design and implementation, 6, 19–20
  • Tax holidays, 7, 8, 84n, 85
  • Taxpayer services, 44–45
  • Tax policy, 18–19
  • Tax procedure codes, 36–37
  • Tax returns
    • auditing of, 46
    • royalties and, 39
    • self-assessment, 91, 92
  • Technological expertise for natural resources, 8–9
  • Thin capitalization, 82
  • Training and skills, 64–65
  • Transfer pricing
    • domestic processing and, 89
    • exports and imports and, 10
    • general rules, 70–71
    • joint ventures and, 80
    • mineral valuation and, 77, 79
    • natural resource taxes and, 70–72, 80–81
    • procedures, 81
    • PSAs and, 75
    • in revenue administration, 5
    • specific rules and, 71–72, 81
  • Transparency. See Governance and transparency

U

  • Unitizations, 88
  • Up-front fees, 6, 7, 8, 9
  • Upstream operations, 1, 5, 56, 69, 75

V

  • Valuation prices, 45, 46
  • Valuation rules, 48, 73, 75, 83
  • Value-added tax (VAT), 10, 88

W

  • Weighted average prices, 46, 72, 75
  • Withholding taxes (WHT), 10, 48, 82, 88, 91
1

For a comprehensive discussion on natural resource fiscal regimes, see IMF (2012).

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