The Government of Romania approved, at the proposal of the Ministry of Finance, the introduction by Emergency Ordinance of an additional tax of 60% on the surplus profits of companies in the crude oil, natural gas, coal and refineries sectors. The measure applies to companies that exceed in one year, starting in 2022, by more than 20% the average taxable profits related to the financial years from 2018-2021
Nicknamed “solidarity contribution”, the tax is justified by the government based on Regulation no. 1854/2022 of the Council of October 6, 2022. “The main reason is, on the one hand, to protect vulnerable categories of the population against the effects of rising energy prices and, on the other hand, […] to ensure the financing of investments in strategic energy projects, especially those from renewable sources”, explained Mihai Diaconu, State Secretary at the Ministry of Finance. “We are talking about super-profits in the field at a time when the prices of energy products are volatile. For some states, fortunately this is not the case in Romania, resources are difficult to identify and the population needs support in these complicated times. Targeted companies are solid companies with considerable profits, those who in the past years have performed extraordinarily, and now it is their turn, as stipulated by the European Regulation, to contribute to passing this difficult period as easily as possible. Who are the taxpayers? They are commercial companies that carry out activities in the sectors of crude oil, natural gas, coal and refineries. The taxable base is represented by what exceeds by more than 20% the average profits for the last four years, namely 2018, 2019, 2020 and 2021. As the regulation also stipulates, Romania has transposed this provision verbatim, so to speak . The tax rate, exactly as I said earlier, is 60% of the extra profit, which exceeds the average by 20%”, Diaconu explained.
He also emphasized that, of the amount collected in this special fund, at least 70% will be distributed to finance strategic investments, as well as investments in energy efficiency and investments in energy from renewable sources. The payment deadline will be June 25, 2023, respectively for the profit of the year that has not yet been completed in 2022, and June 25, 2024 for the profit that will be realized in the year 2023.
The government is considering similar measures for other industries. “For example, Hungary, from what I’ve seen, imposed taxes including on the banking and pharmaceutical sectors, they chose another mechanism”, answered Mihai Diaconu to a question from the press.