UK hits offshore producers with supplemental tax

In a surprise move, UK tax officials applied the "stick" to offshore producers with an immediate new 10% supplemental tax on North Sea oil and gas profits, while hinting at a future "carrot" through possible abolishment of the 12.5% overriding royalty for older fields.The new supplementary tax outlined in the new UK budget presented Apr. 17 effectively raises the corporate tax rate to 40% from 30% previously, said officials at Deutsche Bank AG in London. Financing costs are not deductible from the supplementary tax and, like the corporate tax, there is a "ring fence" to prevent the reduction of taxable upstream profits by losses from other activities.In an Ap...

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