Romgaz, the largest gas producer in Romania, has announced that it will pay a solidarity tax of 60% on “exceptional profits” from 2022. It is estimated that the company will pay the Romanian state more than RON 900m.
The Ministry of Finance has asked the European Commission for clarifications regarding the European regulation transposed into national legislation, as it concerns the way in which this tax is calculated. The clarification could be decisive in determining the position of the tax authorities in the case of OMV Petrom, a company that has originally submitted that it is not obliged to pay this tax.
The 60% tax rate that the government of Romania has opted for is double the minimum provided in the European Union regulation, which is 33%, and is the third largest in the EU. It is applied to a tax base represented by the difference between the taxable profit for 2022 and 2023 (being an exceptional measure, it applies only until December 31, 2023) and 120% of the average taxable profit achieved in the period 2018-2021.
According to Romgaz, in 2023 more than half of the company’s expenses (55%) will be tax expenses, compared to only 14% personnel expenses, 13% goods and services expenses and 18% other operational expenses. These expenses include royalties, the tax on additional revenues from the sale of gas, the contribution to the energy transition fund, contributions owed to ANRE, the solidarity contribution (mentioned RON 900m), taxes on land and buildings and other taxes and fees. In total, the amount of taxes and fees that Romgaz estimates it will pay to the budget in 2023, including the solidarity contribution, will amount to over RON 4.1bn, which is 2 times higher than the net profit forecast by the company for the same year, which is RON 2bn.
Furthermore, last week OMV Petrom, the largest producer of hydrocarbons in Romania, has stated that according to the European Regulation, transposed into domestic legislation, through which the contribution of 60% of the accounting profit was introduced, it is not obliged to pay this tax. The main shareholder, the Austrian group OMV, has informed the Vienna Stock Exchange that Petrom will not pay the solidarity contribution to the Romanian state. At the same time, the Austrian group announced the amount that OMV will pay on account of the 33% solidarity contribution (if investments are made, 40% in their absence) introduced by the Viennese government: “Based on the preliminary financial figures, we expect that the solidarity contribution from Austria to have a negative impact of approximately 150 million euros for the year 2022. This will be effectively paid only in 2023”.
