Romania's Energy Ministry has submitted a draft legislation for public debate to change the Offshore Law, a controversial law issued last year with provisions imposed by the former leaders of the governing Social Democrats (PSD). That law has been received badly by oil and gas investors and reports have circulated that ExxonMobil would plan to drop an oil license at the Black Sea because of that. The Government wants to change the regulation.
With the new bill, the Government aims at relaxing taxation for investors, even more so as new oil perimeters were put out for tender. According to HotNews.ro sources, interest for these new perimeters has been limited so far, with the unfavorable legislation seen as one possible reason.
When US President Donald Trump met visiting Romanian President Klaus Iohannis at the White House in August, the American leader voiced expectation that the Romanian energy-related legislation, especially the Offshore law and an emergency ordinance which hit multiple sectors in December 2018, would be improved to raise Romanian attactiveness for investors.
Romanian PM Viorica Dancila starts a visit to the US on Sunday and has planned a meeting with US Vice President Mike Pence.
Key changes provided by the new bill:
- supplementary taxation on revenue for selling prices where investors do not report high profit is eliminated
- reference price would no longer be used to determine the base for taxation on supplementary income
- increasing the threshold for upstream investment deduction in determining supplementary offshore tax from 30% to 60%
- eliminating limits to investment deduction for the calculus of taxation on profits
- eliminating the compulsiory trading on centralised markets in Romania on medium and long term