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Romanian Parliament and Austrian Energy Giant Did Not Share Taxes

The Romanian Parliament on Wednesday proposed a new law on the payment of a solidarity contribution to OMV Petrom. The Chamber of Deputies of Romania’s bicameral parliament has passed a law on an additional income tax for energy companies, extending it to OMV Petrom, but the solidarity contribution to be collected from the Austrian company that owns the majority stake will be much less than parliament has previously proposed.

This is the third version of the bill. An emergency government decree imposing a tax on excess profits in December had previously been amended by parliament so that OMV Petrom could not evade the excess tax, but this version of the law was denied by head of state Klaus Iohannis .

In Romania, companies operating in the crude oil, natural gas, coal and refining sectors are expected to pay a “solidarity contribution” of 60% of their annual excess profits. A special tax, introduced in October by the EU Council regulation on emergency intervention to address high energy prices, is to be paid by the fossil fuel sector on profits that are more than 20% higher than the average annual profit for the period 2018-2021.

Parliament tried to amend the regulation, which has been in effect since December, after OMV Petrom, a major player in the Romanian energy market, announced that it was exempt from the legislation because less than 75% of its business turnover last year was in crude oil. , natural gas, coal and oil refining sector. Therefore, the legislators provided that when checking the threshold of 75%, the value of crude oil on the world market, which the company has transferred to other divisions of the group, for example, as already processed fuel, should also be taken into account.

After OMV Petrom said it would not make the necessary investments to start production at the massive Neptun natural gas field in the Black Sea if Romania forced it to pay additional income taxes, the head of state returned the bill to parliament for consideration.

For the third time, Romanian lawmakers have agreed not to extend the excess profit tax to OMV Petrom. Instead, they will oblige companies engaged in oil production and refining (OMV Petrom is the only one in Romania) to pay a solidarity contribution of 350 lei (€17.66) per ton. According to economic portal Economica.net, OMV Petrom, according to the latest version of the law, will have to pay about €300 million last year, which is significantly less than the 60% excess profit tax calculated on last year’s excess profit, which the government estimates is about one billion euros.

Another amendment was also included in the legislation, which, according to the document, is “addressed” to another Romanian offshore gas company, Black Sea Oil and Gas (BSOG). Legislators excluded from the scope of the excess profit tax law those companies that did not produce oil and gas from 2018 to 2021. BSOG, which owns a controlling stake in the Romanian Midia project, launched production at two small Black Sea fields last summer.

The head of state may choose not to return the law for consideration a second time, but may file a constitutional objection against it to the Constitutional Court.

Source: eadaily