Romania's Chamber of Deputies votes offshore law with amendment on stable taxation

Romania’s Chamber of Deputies voted on Wednesday, October 24, the offshore law, which sets the conditions for gas exploitation operations in the Black Sea. According to the law, investors who extract gas from the Black Sea must trade at least half of the quantities on the local market and hire at least 25% local workers. The ruling party PSD had to accept an amendment proposed by the National Liberal Party (PNL) which provides that the taxation will remain unchanged throughout the whole period of the concession agreements, which can be closed for a maximum period of 30 years with the possibility to extend them by 15 years, local Mediafax reported. Without this provision, for which the investors involved in Black Sea operations insisted, the law wouldn’t have passed. The taxation framework remains the one proposed by PSD earlier this year. Thus, besides the royalties, the companies that extract gas from the Black Sea will have to pay a tax on additional revenues, whose quota will vary based on gas prices. The extra revenues will be calculated based on the difference between the actual gas sales prices and the reference price of RON 45.71 (EUR 9.8) per MWh. Thus, for prices of up to RON 85 per MWh, companies will pay an extra tax of 30% of the additional revenues. For prices of over RON 85 per MWh, additional quotas will be paid based on price intervals. Companies will be able to deduct their upstream investments from the tax on additional revenues, in the limit of 30% of the yearly tax. The law will now go to president Klaus Iohannis for promulgation. Romania’s Chamber of Deputies postpones vote on offshore law as PSD fails to secure majority editor@romania-insider.com