Falklands’ considering easing capital gains tax for oil and gas industry
The Falkland Islands government is considering tax legislation that will help to further promote the oil and gas industry activities by granting more time for the capital gains effective presentation.
In its latest meeting the Executive Council was presented with a paper proposing an extra statutory concession covering capital gains in the oil and gas industry.
“The effect of our present legislation means that any monies paid by a “buy in partner” would be treated as a capital gain and taxed as such and could mean that a company could actually be bankrupt before the proceeds of extracted hydrocarbons started to come back into the company”, said the Exco release.
The effect of this Extra Statutory Concession is that “we will put the capital gains tax portion on any monies received as the result of a buy in on ice for five years or until monies are received from the sales of extracted hydrocarbons, whichever happens the soonest”.
The government points out that this is not waiving any taxes that are due, but giving companies a period of time to have revenues coming in before the Falklands’ government starts looking for them to pay the capital gains tax.