More topics

Overdue oil and natural gas royalties and tax

Last updated on August 17, 2022

You must pay all invoiced amounts by the payment due date or your account will become overdue and be subject to interest.

Your royalties become overdue when:

  • You owe a balance in your royalty account after the due date
  • You owe a balance in your deemed royalty account after the due date
  • Your royalties for any previous production months have been adjusted because:
    • you have filed an amended report or information increasing the royalty for that period
    • your well’s royalty incentives or allowances were decreased
    • you have received an assessment from us because of a validation amendment or audit 

Collection action may be taken on overdue accounts. By law, any amount invoiced to you is due and owing.

If you disagree with an amount invoiced to you, contact your royalty analyst to discuss your concerns. If your concern is not resolved, you may be able to request a reconsideration. You cannot request a reconsideration of interest alone. If an invoice is subsequently reduced, the amount is returned to you or credited to your account, with credit interest if applicable.

Interest

Interest is charged monthly on all overdue amounts.

Interest starts to accrue the day after the payment due date until the amount is paid. 

You are issued a Statement of Account (SOFA) showing the interest if the overdue amount is not fully paid by the 23rd of the following month (the interest cycle date).

Interest is set at an annual rate fixed for each quarterly period on:

  • January 1
  • April 1
  • July 1
  • October 1

Each quarter the rate of interest is set at 3% above the prime lending rate of our principal banker for the quarter.

Interest on penalties

If you are assessed a penalty, you are not charged interest on the penalty if paid in full and on time. However, if the penalty amount is not paid on time, interest is charged on the outstanding balance from the payment due date and shown on your next Statement of Account.

Interest on amended production periods

If you amend your royalty for a prior period, prior period interest is assessed based on the number of days from the original payment due date to the invoice date for the amendment.

If you are issued an assessment as the result of an audit or validation review, interest is assessed as a lump-sum amount. 

Any additional royalty or penalty is considered due on the original payment due date for that period. 

Example

Assume you amend your January 2018 gas production period on March 2, 2019 and you do not have sufficient non-refundable credits (NRCs), or credits from amendments to other periods on the same invoice, to offset the additional amount due:

  • The additional royalty due was payable on April 25, 2018 (based on an April 10, 2018 invoice)
  • Interest is charged on the additional royalty from April 25, 2018 (the date the royalty was originally due) until March 23, 2019 (the Crown invoice date). You have until April 1, 2019 (March 31, 2019 is a Sunday) to pay the invoice. No interest will be charged between March 23 and April 1, if you pay the full amount due. Interest will be charged on any unpaid balance from April 1, until it is paid in full.

Non-refundable credits that were available at the time of the amended period affect the amount you pay and the amount of interest that is charged to you. Learn more about how non-refundable credits apply when amending prior periods.

Interest on deemed royalties

Debit interest

Interest is charged on overdue deemed royalties.

Deemed royalties are eventually offset when the imbalance that caused the assessment is corrected. However, any accrued interest on an overdue deemed royalty balance must still be paid.

Credit interest

Any credit resulting from the offset of a deemed royalty starts accruing credit interest on the 61st day after the deemed royalty is offset on an invoice.

If a deemed royalty was overpaid, the overpayment starts accruing interest on the 61st day after the payment is effective.

Make a payment

Pay your overdue oil and natural gas invoices online with eTaxBC or learn other ways to pay.

The Receiveables Management Office (RMO) of the Ministry of Finance collects overdue balances.

If your account is overdue, you may be contacted by the RMO.

The RMO cannot adjust an invoice, discuss why an invoice was issued, or explain how the amount was calculated. Please contact your royalty analyst with these questions.