Romania

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  • Type: Publication series
  • Date: 3/7/2013

Fiscal barometer February 2013 

            

Ramona Jurubita

Partner, Taxation Services

There were so many controversial fiscal changes in February that it would not be surprising if it turns out to be the most eventful month of the year from a tax perspective. The changes were a clear demonstration that to apply tax rules properly, the specific of each industry must first be understood.

 

Teodora Alecu

Director, Transfer Pricing

 

A number of controversial measures were introduced affecting the oil and gas sector as well as companies dealing with qualifying natural resources. While some players on the market were invited to discuss the draft legislation, two of the new measures took the market by surprise.

Also, potential investors in the oil and gas sectors found themselves unable to quantify the impact of the new laws in their business plans, due to the complexity of the formula for calculating the tax. The three most important measures are: 

  • A 0.5% tax on turnover of companies that are in possession of extraction licenses for certain natural resources (other than gas). Based on the current wording, the tax applies to all turnover, not only on that derived from direct use of the natural resources.
  • A 60% tax on the additional income derived by companies which extract oil and gas in Romania. The formula for calculating this has presented difficulties for companies in the industry, because it is so complex. A lack of guidance or impact studies on the effect of the new law left many of our clients wondering how this tax translates in terms of the increase in royalties. 
  • A monopoly tax applied for each MW/h for which transport and distribution services are invoiced by companies in the oil and gas sector.


The fact that this package only applies until 2014 and the feedback from the authorities that it will be replaced by a yet to be decided increase in royalties only made everything more complicated.

The second important change affected the clawback tax. In this case, what happened was rather surprising and it shows that it is better to correct a situation rather than continuing to act wrongly. The Constitutional Court has decided that the law provision which states that the value of drugs sales (calculation element for the “clawback” tax) also includes Value Added Tax is non-constitutional. The Constitutional Court decision opens the possibility for taxpayers to recover the surplus amounts paid in the first three quarters of 2012 as a result of including the Value Added Tax in the calculation of the “clawback” tax.

 

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