North Sea tax change to end drillers' 20-year tax holiday


A planned change in the way the U.K. taxes North Sea drillers exposes the loophole in a system that allowed the industry to pay almost no corporate taxes for two decades, legally and with the consent of Britain's tax authority, according to a Reuters analysis of company accounts, shipping registers and other company statements.

Companies that have benefited from the current rules include Ensco (ESV), Rowan (RDC) and Transocean (RIG), which collectively accounted for 60%-plus of the U.K. market in 2012; the main British operating units of the three companies reported combined U.K. revenues of $11.8B during 1993-2012, while their combined tax charge was $70M.

The amount of money the government expects the tax change to raise is equivalent to ~5% of total rig market revenues, which would have raised an additional ~$600M from the three companies alone over the last 10 years.

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Comments (5)
  • maudie
    , contributor
    Comments (486) | Send Message
     
    I'm certain it will be put to good use.
    13 May 2014, 10:48 AM Reply Like
  • Stock Market Mike
    , contributor
    Comments (3507) | Send Message
     
    Seems like a positive change. Tax loopholes encourage shenanigans.

     

    Long SDRL.
    13 May 2014, 12:22 PM Reply Like
  • Dr.Strangelove
    , contributor
    Comments (91) | Send Message
     
    Over taxation has marked the demise of the British empire.
    13 May 2014, 12:24 PM Reply Like
  • JRS5
    , contributor
    Comments (331) | Send Message
     
    Wonder how this will impact future dividends from these traditionally high dividend companies.
    13 May 2014, 07:43 PM Reply Like
  • NV_GARY
    , contributor
    Comments (6160) | Send Message
     
    At least everyone is in agreement.... Let's see, more tax = more income...?
    13 May 2014, 09:46 PM Reply Like
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