Taxable income
Petroleum companies are taxed at the rate of 50% of their annual net
profit from petroleum operations, including profit from the transfer
of their concession interests and other activities incidental to
petroleum operations. Deductions are allowed for “ordinary and
necessary” business expenses, as well as depreciation on capital
expenditure, petroleum royalties and other charges. Certain types of
expenses are specifically disallowed for deduction, including interest.