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  • Service: Tax
  • Type: Regulatory update
  • Date: 9/24/2014

Romania 

Taxes and Incentives
Romania Taxes and incentives for renewable energy KPMG Global Energy & Natural Resources.

Support schemes

Investment and other subsidies


Tax incentives


In Romania, the following tax incentives may be applicable to energy produced from the following renewable sources: wind, solar, geothermal, hydraulic utilized in power plants with an installed capacity of maximum 10 MW, biomass and residues fermentation gas.


  • Electricity from renewable sources is excise duties exempt.
  • Accelerated depreciation for tax purposes can be used for technological equipment, computers and related peripheral equipment.
  • Buildings and land used within hydroelectric, thermoelectric and nuclear power plants, as well as buildings and land relating to transformation and connection posts, are not subject to local taxes.
  • Reinvested dividends can be dividend tax exempt, provided the dividends are used for the purpose of creating new work places or developing the activities of Romanian entities.
  • Incentives (for example, exemption from payments to unemployment funds or monthly grants) can also be available to companies which provide places of work for students, recent graduates or disabled persons.
  • Reinvested profit - starting 1st of July 2014, is applicable the tax relief for the profit reinvested in the production and/or acquisition of technical equipment (machines, equipment and work installations) used for carrying out economic activities put into operation no later than 31 December 2016.
    • The types of equipment eligible for this tax relief are defined in subgroup 2.1 of the Catalogue regarding the classification and the normal useful life of fixed assets.
    • The profit which can be reinvested represents the balance of profit (loss) account for the period, namely the accumulated accounting profit from the beginning of the year, in the year in which the investment is realized. The tax relief is granted up to the limit of corporate tax due for the period in which these investments are made.
    • The corporate tax relief applies only for new fixed assets. Also, taxpayers which benefit from this incentive are required to keep the specific fixed assets for at least half of their normal economic useful life established according to the accounting applicable regulations, but no more than 5 years.
    • Also, taxpayers who benefit from this incentive cannot apply the accelerated depreciation method for this equipment.

Operating subsidies

Green certificate system


The price of a green certificate has been set between the Romanian new leu (RON) equivalent of EUR29/ General Certificate (GC) and EUR59/GC. Currently, the price of a green certificate is equivalent with the maximum value of EUR59/GC, since the demand of GC is higher than the offer.

Quota obligation

On 21 March 2014, the Romanian Regulatory Authority in the Field of Energy (ANRE) calculated the estimated quota of GCs acquisition for 2014 for the electricity suppliers as 0.237 GC/MWh supplied to final consumers.

Additional information

Legal basis


Electricity Law 13/2007 and Law 220/2008 for approval of the support scheme for electricity from renewable sources (Law 220/2008) and the secondary relating legislation issued by ANRE.


Administrative procedures


The activity of production of electricity from renewable sources requires a license granted by ANRE. Such a license can be obtained by an entity that meets certain requirements (relating to its financial position, technical resources, etc.) and provides a specific set of documentation.


The license is granted for a fixed term, but no longer than 15 years. In case of production of electricity from renewable sources, the maximum period during which ANRE should issue the relating license is reduced to 30 days.


Green certificate scheme


In order to promote investments in renewable electricity production capacities, a Tradable Green Certificates (TGC or GC) system has been in place in Romania since 2004, coupled with a supplier quota obligation system. Under this framework, energy producers are entitled to receive a set amount of GCs according to the amount of electricity generated by them from renewable sources. The revenue from GC sales represents additional revenue for eligible renewable producers on top of electricity sales on the market.


According to Law 220/2008, the producers of electricity from renewable sources benefit from a different number of green certificates depending on the fuel used. For example:


  • 0.7 GC/MWh for new hydroelectric power plants with installed capacity of maximum 10 MW;
  • 1 GC for each 2 MWh for hydroelectric power plants with an installed capacity of maxim 10 MW;
  • 0.5 GC/MWh for wind power, up to 31 December 2017 and 0.25 GC/MWh starting with 1st of January 2018
  • 3 GC/MWh for solar power.

The support scheme is granted for a period of 3 to 15 years, depending on the age of the plants and the installed capacity. Eligible electricity producers will be able to enter the scheme only if the commissioning/refurbishment of the power plant are performed before 31 December 2016.


Sale


The annual mandatory GCs acquisition quota is established based on the quantity of renewable electricity produced and on the final electricity consumption of the previous year, without exceeding the level corresponding to the mandatory quota for the electricity produced from renewable sources.


The quantity of electricity for which the annual mandatory GCs acquisition quota is established includes the electricity purchased by electricity suppliers for their own consumption or for the sale to final consumer, the electricity used by the electricity producers for their own consumption (other than CPT), and for the supply of end consumers directly connected to the power plant.


Electricity suppliers and electricity producers previously mentioned have the obligation to acquire annually a number of GCs which is equivalent to the product between the annual mandatory GCs acquisition quota and the quantity of electricity detailed in the paragraph above, supplied annually to final consumers.


For 2014, the estimated quota of acquisition of GCs for the electricity suppliers is 0.237 GC/MWh delivered to final consumers. Any supplier that fails to fulfil this obligation must pay the equivalent value of the GC at a premium of EUR119.293 per each non-purchased certificate.


The GCs are issued by the transmission system operator and are valid for 16 months. The trading value of a GC has been established by ANRE as between the RON equivalent of EUR 29/GC and EUR59/GC. Currently, the price of a green certificate is equivalent with the maximum value of EUR59/GC, because the demand of GC is higher than the offer.


During the period 1st of July 2013 – 31 March 2017 it is temporarily deferral from trading of a certain number of GC for each 1MWh generated and delivered by the electric energy producers from renewable resources, accredited by ANRE up to the date of 31 December 2013, as follows:


  • 1GC for hydroelectric power plants with installed capacities of maximum 10 MW;
  • 1GC for wind power plants;
  • 2GC for solar power plants.
 

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