The effective royalties and similar taxes rate that oil and gas producers pay in Romania increased to 17.4%, in 2016, while the European average rate decreased to 8.8%, according to a Deloitte study.

However, Deloitte points out that the effective tax rate for oil and gas companies in Romania decreased to 13.9% in 2017 after the tax on special constructions was eliminated.

Deloitte makes a yearly overview on royalties and similar taxes for the oil and gas upstream sector across Europe. In 2016, the average effective royalties and similar taxes rate in the European states dropped to 8.8% from 10% in 2015 and 11.7% in 2014, according to the study. The average effective royalties and similar taxes rate decreased in 2016 compared to 2015 in 9 European countries: UK, Norway, Denmark, Hungary, Ireland, Germany, Spain, Italy and Albania. Meanwhile, the tax rate increased in 2016 in six European countries: Romania, Austria, Holland, Greece, Lithuania and Poland.

In Romania, the effective tax rate is computed as an average between the observable royalties and other similar taxes, including the 60% tax applied to additional revenues resulted from the deregulation of natural gas prices, special construction tax, the 0.5% tax applied to revenues resulted from the crude oil exploitation. The effective tax rate for the upstream gas activity is higher than the one for the upstream oil activity.

editor@romania-insider.com