VAT and Customs Duty in the Oil and Gas Industry

Introduction and background to structures and trading issues

Offshore exploration and exploitation

• The supply chain
• VAT registration
• Deduction of input tax incurred prior to registration
• Place of supply
• VAT liability of principal supplies and imports
• Exploration and production charges
• Pipeline transportation and maintenance
• On shore terminals
• Imports
• Goods returned from the continental shelf
• Supplies to OMS from third party contractors

Onshore exploration and exploitation

• Liability of exploration and production billings
• Supplies by third party contractors
• Environmental taxes

Disposal and rearrangement of licence interests and financing agreements

• Transfers of going concerns (TOGSs)
• Supplies not involving a TOGC

Warehousing

• Processing and other services
• VAT accounting procedures
• Evidence for claiming VAT
• Home produced oil
• Imports of finished products
• Valuation for VAT and tax points

Imports from outside the EU for use offshore (Ship Work End Use Relief – SWEU)

Decommissioning of rigs and platforms in the UKCS