Romania will forward oil and gas royalty tax law to parliament in September

26/05/2015 00:13

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Romania's government will forward a draft law on royalty taxes for the oil and gas sector to parliament in September, as declared by Deputy Finance Minister Dan Manolescu to an energy seminar on Monday.

The new tax system should comprise separated royalties for onshore and offshore extraction and will apply only to new agreements. It will also contain a levy on profit from upstream activities, additionally to the global flat tax on profit of 16 percent, and a system of assumptions based on investment, according to Manolescu. Romania is one of the European Union's poorest states, but it has a huge range of energy resources, comprising gas and coal, and several analysts have mentioned that quite low royalties prevent it from making the maximum of what it possesses. Firms presently pay royalties varying from 3.5 to 13.5 percent of production for oil and gas, depending on the volume extracted. They also pay a tax on special buildings such as oil wells and a tax of approximately 60 percent on income from more elevated prices because of continuing energy market deregulation. Both levies are provisional. Royalties in Romania did not modify since 2004, a stipulation it agreed to under the 2004 privatisation of oil and gas conglomerate Petrom, now possessed by Austria's OMV. After the royalties law is consented, a plan to tender 36 new concessions for onshore and offshore hydrocarbon licences would be held, stated Gheorghe Dutu, the manager of the National Agency for Mineral Resources (ANRM).

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