Government approves the transposition of the Regulation on the taxation of super-profits for energy companies / How much do countries like the Netherlands, France, Germany, Italy or Greece tax these companies?

The Government has approved the transposition of the Regulation on the taxation of super-profits of energy companies, as a result of which 3.9 billion lei will be collected in a special fund, Mihai Diaconu, secretary of state in the Ministry of Finance, said on Wednesday at the end of the Government meeting, Agerpres reports.

„The Government approved today, at the proposal of the Minister of Finance, the Emergency Ordinance on some measures to implement Council Regulation 1854 on 6 October 2022 on an emergency intervention to approve the problem of high energy prices. As the title also states, the Regulation is newly approved by the Council on 6 October 2022. The main reason for this is, on the one hand, to protect vulnerable groups of the population from the effects of rising energy prices and, on the other hand, the main objective of the Romanian Government, including that stipulated in the European Regulation, is to ensure the financing of investments in strategic energy projects, especially those from renewable sources. Therefore, we are dealing with a transposition of a European regulation that concerns all Member States. The Netherlands, France and Germany, for example, have imposed a 33% share of these extra-profits, or let us call them super-profits, of companies operating in the sector. Ireland has also transposed the Regulation and is going for a 75% tax rate, Italy has chosen 50% of profits for 2023. The Czech Republic, a country comparable to Romania, in our view, has imposed a tax rate of 60%, and Greece 90%. Therefore, the whole of Europe demands this solidarity contribution and Romania must align itself as a member of the European Union with this Regulation. We are talking about super-profits in the sector at a time when energy prices are volatile. For some countries, fortunately not Romania, resources are difficult to identify and the population needs support in these complicated times”, said Mihai Diaconu.

According to the Secretary of State, the companies concerned are solid companies with considerable profits, „those that have performed extraordinarily well in the past years, and now it is their turn, as stipulated by the European Regulation, to help make it as easy as possible to get through this difficult period”.

The taxpayers are companies operating in the oil, gas, coal, and refining sectors. The taxable base represents the amount exceeding the average profits of the last four years, 2018, 2019, 2020, and 2021, by more than 20%.

„As the Regulation stipulates, Romania has transposed this provision word for word, so to speak. The tax rate is 60% of the extra profit exceeding 20% of the average. And, very importantly, as I mentioned earlier, 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 renewable energy. The payment deadline will be 25 June 2023, i.e. for the profit of the year not yet completed, 2022, and 25 June 2024 for the profit to be realized in 2023”, explained Mihai Diaconu.

He noted that the draft obtained the opinion of the Economic and Social Council (ESC) on Wednesday.

Asked how the money will be divided, the secretary of state said that the ordinance only establishes the „primary basis”, and that the criteria and the concrete mechanism will be defined by government decision, on the proposals of the Ministry of Energy. The money will be held in an available account at the Treasury and will be accessed as investments are made. Investments can be made even by the companies paying this tax. The main purpose of the measure is to encourage investment.

Also asked about the amounts that could be raised in the fund, Mihai Diaconu said that the Ministry of Finance estimates are rather pessimistic, at least 3.9 billion lei.

Translated article