The budgetary impact of investments in Black Sea gas could be of 5 billion lei annually, according to the study “Analysis of the specific taxation of offshore natural gas production in Romania in 2021” conducted by PwC Romania.
The offshore law, adopted on Wednesday in the Parliament, will offer Romania an indisputable competitive advantage in the context of the crisis on the resource market and implicitly benefits determined by investments in exploitation: budgetary revenues from taxes and duties associated with these investments of approximately 5 billion lei annually, new jobs and attracting related investments.
Among the main provisions of the new law are the increase of the price threshold from which the revenues of the gas producers from the Black Sea are overtaxed and the introduction of the preemption right of the Romanian state on the deposits to be exploited.
Thus, the Government will be able to impose temporary restrictions on both price and sale for domestic production of natural gas in the Black Sea, but also from deep onshore perimeters. This provision was introduced in order to ensure the consumption of the population, but also so that Romania can help other EU member states in case of need, if they will face gas supply crises.
Regarding the fiscal framework, the additional taxation of the incomes is eliminated for the sale prices at which the investors do not realize extra profits, respectively between 45.71 lei/MWh and 85 lei/MWh, but the taxation grid is maintained in case of the additional incomes obtained following the practice of prices higher than 85 lei/MWh.
The law also removes restrictions that provide for 50% of the extracted gas to be sold on the local market. The exception will be the situation of energy crisis or distortion of Romania’s natural gas supply.
The reference price in determining the basis for calculating the additional income tax is also eliminated. This will take into account the actual price achieved through transactions and not the price on the Austrian CEGH stock exchange, a fact that could reduce the level of taxation.
According to the PwC consultants, another important provision is the increase from 30% to 40% of the maximum level for deducting investments in the upstream segment to determine the additional tax.