Romania: New tax on extra profit for upstream sector could be introduced

26. May 2016. / SEE Energy News

Romanian Minister of Finance Anca Dragu announced in December last year that the draft of new taxation system should be completed and published for public debate in the first quarter of 2016, while the new law on royalties in oil sector should come into force in 2017.

According to the National Convergence Program 2016-2019, the Government plans to introduce a new system of taxation in oil sector in 2017, which will be applicable to all holders of agreements, both offshore and onshore.

The Government is planning to revise the current taxation system by introducing new tax on extra profit in upstream sector (exploration and production), but with additional application of a tax deduction on investments. According to the document, the taxation system will ensure that the real taxation rate for the companies will not exceed 60 %, the number used at international level.

Romanian Minister of Finance Anca Dragu announced in December last year that the draft of new taxation system should be completed and published for public debate in the first quarter of 2016, while the new law on royalties in oil sector should come into force in 2017.

Currently, the royalties are based on the fact how rich the extracted deposits are, therefore companies pay to the state between 3.5 % and 13.5 %. Since most of deposits in Romania are old and almost depleted these royalties are already at their minimum. The royalties system should have been changed two years ago, but the Government postponed the development and implementation of new regulations in this field, transmits Serbia-energy.eu

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