Timor-Leste upstream fiscal summary Report

Country Report 25 May 2023

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Report summary

All upstream licences in Timor-Leste are awarded through licensing rounds under production sharing contract terms (PSCs). The terms are set for each licensing round, and include royalty of 5%, no cost recovery ceiling and contractor’s profit share of 60%. Other non-biddable items include a supplemental profits tax paid of 22.5% and corporate income tax of 30%. The State has an option to take up to 20% stake in any development. In August 2019, Timor-Leste resolved maritime border dispute with Australia and removed Joint Petroleum Development Area (JPDA).The JPDA was ceded to Timor-Leste.

Basis
Licence terms
Government equity participation
Fiscal terms
- Bonuses, rentals and fees
- Royalty
- Ring fencing
- Base
- Rate
- Payment schedule
- PSC production sharing
- Ring fencing
- PSC cost recovery
- Base
- Rate (cost recovery ceiling)
- Recoverable costs
- Unrecovered costs
- Excess cost recovery
- PSC profit sharing
- Base
- Rate
- Payment schedule
- Corporate income tax
- Ring fencing
- Base
- Rate
- Payment schedule
- Supplemental profits tax
- Ring fencing
- Base
- Rate
- Payment schedule
- Fiscal treatment of decommissioning
- Product pricing
Recent history of fiscal changes
Stability Provisions
Split of the barrel and share of profit
Effective royalty rate and maximum government share
Progressivity
Fiscal deterrence