Country Report

Timor-Leste upstream fiscal summary

28 June 2018

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28 June 2018

Timor-Leste upstream fiscal summary

Report summary

The latest model Production Sharing Contract (PSC) was introduced in 2005, and is relatively straight-forward. The State has the right to take an equity interest of up to 20% in any commercial discovery. The First Tranche Petroleum (FTP) rate, cost recovery ceiling and profit oil splits are all fixed; there is an additional profits tax (called Supplemental Profits Tax) levied at 22.5% on net receipts after a project achieves a 16.5% rate of return post-corporation tax. There is also a...

Executive summary
Current licence, equity and fiscal terms
- Basis
- Licence terms
- Government equity participation
- Fiscal terms
  - Ring Fencing
  - Bonuses, Rentals and Fees
  - Indirect Taxes
  - Royalty
  - PSC Cost Recovery
  - PSC Profit Sharing
  - Corporate Income Tax
    - Small Field Depreciation (not included in the model):
  - Additional Profits Tax
  - Product Pricing
  - Summary of modelled terms
Fiscal stability
- Recent history of fiscal changes
- Stability Provisions
Economic analysis
- Split of the barrel and share of profit
- Effective royalty rate and maximum government share
- Progressivity
- Fiscal deterrence