Acasă » Renewables » PATRES: Investors in the renewable sector, wave of lawsuits against the state

PATRES: Investors in the renewable sector, wave of lawsuits against the state

29 January 2024
Renewables
energynomics

The Employers’ Organization of Renewable Energy Producers in Romania, representing producers with an installed capacity of 2 GW and investments in Romania of over 2.7 billion euro decided to go to court to defend the interests of its member companies. Through this approach, PATRES allies itself with a large number of operators in the renewables sector which are already in litigation with the state, being seriously affected by legal provisions that apply retroactively.

The request for intervention submitted by PATRES to the Bucharest Court, Administrative and Fiscal Litigation Section concerns the practice of fiscal bodies in the sense of retroactive application of the law, a practice that affects all electricity producers, especially those of energy from renewable sources, which have the obligation of additional payment of the contribution to the Energy Transition Fund.

“After a series of approaches to the authorities, without success, we considered necessary to initiate legal actions. Through the request for intervention sent to the Bucharest Court, Administrative and Fiscal Litigation Section, we support the position of some member companies, in existing pending cases. The request to sue is well-founded, the purpose of PATRES being to promote, support, defend and represent the interests of producers of energy from renewable sources, as well as ensuring a healthy business environment in this field of activity and supporting its development. Among other objectives, our patronage represents the economic and legal interests of producers, members of PATRES,” states Viorel Lefter, President of PATRES.

For good and correct information, we present the de facto situation:

According to GEO 27/2022, between April 1, 2022 and March 31, 2023, electricity producers, with the exception of those that put production capacities into operation after the entry into force of GEO 27 (March 22, 2022), have the obligation to pay monthly, to the state budget, the tax at the rate of 80% of the additional income made from the sale of electricity. From September 1, 2022, GEO 119/2022 entered into force, amending and supplementing GEO 27/2022, which established the obligation for electricity producers to pay a contribution to the Energy Transition Fund in the amount of 100%. In December 2022, Law 357/2022, which approves GEO 119/2022 and implicitly GEO 27/2022, comes and changes the method of calculating the contribution to the Energy Transition Fund, respectively the definition of the monthly expenses taken into account changes, in the sense of limiting expenses with imbalances at a maximum of 5% of the value of electricity with physical delivery from own production and the elimination of profiling expenses (profiling represents the purchase of energy necessary to comply with the contracted quantity when the plant does not produce). Limitations that did not exist before!!! This legal amendment/provision entered into force on December 16, 2022. After this date, following meticulously carried out tax controls, the tax authorities imposed on producers an obligation to pay the additional contribution for the period September – December 2022, applying but the calculation formula was only approved on December 16 by law 357.

“We emphasize that in the presented situation, of retroactive application of the law, all electricity producers are affected, not only those in the renewable sector. However, the impact is major for RES producers because in their case the imbalances and profiling expenses are high. As a result, a wave of lawsuits by renewables investors against the state has been triggered, and in unison with them, PATRES is going to court to defend the interests of its members. Romania is campaigning for green energy and, in this context, it is incomprehensible why the state authorities choose to act again, abusively, against a sector that should currently have the best development in line with the rest of the European states,” says Martin Moise, First Vice-President of PATRES.

In the context in which electricity producers, in this case producers of energy from renewable sources, were put in the situation where they were forced to pay certain fiscal obligations, it cannot be claimed from these producers to expect that through a new normative act, which enters into force later, to be obliged to pay the same obligations in an increased amount, for the period before the entry into force of the provision regulating the new contribution calculation formula, Patres indicates in the intervention request.

The imposition decision is illegal as it violates the principle of non-retroactivity of the law.

According to art. 15 of the Romanian Constitution, the principle of non-retroactivity of the law is regulated, as follows: “The law disposes only for the future”. And the Constitution prevails before any law/normative act and even more so the state authorities, including ANAF officials and those of the Ministry of Finance, who implement the laws, have the obligation to comply with their provisions.

Moreover, the retroactive application of the new Contribution calculation formula contravenes the legal provisions in fiscal matters, as it is forbidden for a fiscal obligation, of any nature, to be established retroactively, including regarding the limitation of any deductible expenses incurred in the exercise of the activity (art 4, Fiscal Code).

PATRES specifies, in the request for intervention to the Bucharest Court, that the decision to impose additional fiscal obligations on electricity producers through the retroactive application of the legal provisions introduced by law 357 is illegal and causes serious damage to producers.

In the given context, PATRES asks the court to order the annulment of the tax decisions and the documents that were the basis for their issuance.

PATRES imperiously requested the authorities, repeatedly, to consider a fair formula to be the basis of the overtaxation measures of electricity producers, in order not to endanger the production of green energy. In the addresses sent, I indicated that in the case of energy producers from renewable sources, if the application of the Contribution to the Energy Transition Fund will be maintained with the consideration in the calculation formula of all revenues, without taking into account in a fair way also the expenses mandatory, producers may end up in a situation where they accumulate losses, endangering the stability of the entire national energy system. We also pointed out that any surtax formula must take into account the volatile nature of production from renewable sources, which by definition cannot produce the same amount consistently. The surtax formulas must be applied to the net income achieved after deducting the expenses necessary for the purchase of energy for profiling and the expenses for the registered imbalances, expenses which, in the case of producers from renewable sources, represent a substantial and indispensable component of the current operating costs. Otherwise, Patres is talking about overtaxing the loss.

The negative impact on companies in the renewables sector is caused, among other things, by the costs of imbalances, which are only recognized in proportion to 5% of the value of electricity sold, while the industry standard shows imbalances recorded by wind power plants of around 40% , respectively 25% in the case of solar plants.

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