Modern Concession. The modern concessions also known as the Royalty/Tax Systems because they include various combinations of a royalty, an income tax and a resource rent tax. Concessions are now sometimes called permits, licence or lease. In many countries, the transmutation of traditional concessions to modern concessions is happened, especially in Latin America and North Africa. The foundations of the new generation of concession contract is essentially based on the same principle of exclusive rights and ownership of product in return for royalties in kind or cash and tax on the profits derived from production. However, the main concerns of the traditional concessions were related to degree of international oil companies’ control, geographical scope, long period and also financial compensation, which have been rebalanced in the modern concessions.3 The scope of grant in narrowly defined, the geographical area has reduced and local content obligations have added and increased.4 The modern concessions are for a shorter period of time than traditional concession contracts5 (maximum 30-40 years), share for the government both from royalty and taxes have increased, for example, Kazakhstan’s new model concession contracts royalties increased and various levels of taxation have been added. Kazakhstan’s new model contracts employ numerous fiscal devices and sophisticated formulas to capture rent.6 Also, modern concessions may include a signing bonus, exploration fee, operation profit percentage, corporate income taxes7 and some control by the host State, through a NOC, over the management and exploration of its petroleum reserves.8
