In Romania, the effective royalties and similar taxes rate decreased to 13.9 percent in 2017 from 17.4 percent in 2016 and 16.9 percent in 2015, according to Deloitte’s An overview on royalties and similar taxes. Oil and gas upstream sector across Europe study. Starting with 2017, due to the construction tax cut, the effective tax rate decreased to 13.9 percent in Romania.
According to Vlad Boeriu, Partner Deloitte Romania, the decrease was mainly due to the special construction tax cut on January 1, 2017.
In Romania, the effective tax rate is computed as an average between the observable royalties and other similar taxes, namely: the 60 percent tax applied to additional revenues resulted from the deregulation of natural gas prices, special construction tax, the 0.5 percent 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. The difference is mainly driven by the supplementary tax on gas.
In 2016, the average effective royalties and similar taxes rate in the European states (including Groeningen field, Netherlands which has a special fiscal regime) dropped to 8.8 percent from 10 percent in 2015 and 11.7 percent in 2014. Also in 2016, the average effective royalty and other similar taxes rate (excluding the Groeningen field) decreased to 6.9 percent from 7.5 percent in 2015 and 9.1 percent in 2014.