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.