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Offshore law to be amended, to remove several tax barriers
Energy Ministry has launched to public debate a draft law to radically amend the Offshore Law, which is regulating the investments in gas&oil deposits in the Black Sea.
The amendments are set to cut many of the tax barriers introduced in the law by former PSD chair Liviu Dragnea, which prompted big companies like ExxonMobil and OMV to stop investments.
The main amendments
The additional taxation of revenues for the selling prices where investors don’t generate superprofits (ranging from RON 45.71/MWh to RON 100/MWh) is removed. The tax bracket is maintained in case of additional revenues obtained following higher prices than RON 100/MWh.
The reference price used in determining the calculation basis of the additional revenue tax is also removed in order to put the Offshore Law in compliance with the tax principles in Romania stipulated by the Fiscal Code and by the international practice regarding the upstream taxes based on the achieved prices.
The maximum level for deducting investments in the upstream sector to set the additional offshore tax is increased from 30% to 60%, “in order to maintain the competition in the offshore sector in Romania and in order to attract investments, considering the high costs and risks, namely the long time frame of the offshore investments in the Black Sea.”
The restriction of deducting investments for the calculation of the corporate tax is also deleted “considering that this tax is general and all sectors must be treated equally, in accordance with the Fiscal Code”. Therefore, discriminatory practices among offshore players are removed.
The trading obligations on the centralised markets in Romania on medium and long term are also abolished, while investors in the offshore areas are exempted of enforcing GEO 114/2018.