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On January 31, 2025, the Romanian government enacted Ordinance No. 3/2025, which amended Article 46² of Law No. 227/2015, impacting fiscal regulations surrounding the oil and natural gas sectors. This ordinance, which takes effect on February 3, aims to clarify the additional turnover tax obligations for nonresident legal entities engaged in these industries.
Background on the New Tax Regulation
In 2024, Romania introduced an additional turnover tax of 0.5% applicable to corporate entities operating in the oil and gas sectors, specifically those subject to corporate income tax (CIT). Initially, this tax applied only to domestic and nonresident entities with a permanent establishment in Romania and a turnover exceeding €50 million in the previous fiscal year. However, as of January 1, 2025, this revenue threshold has been removed, broadening the tax’s applicability to include more entities operating within the sector.
The calculation for this tax follows a specific formula and excludes certain activities such as the distribution and transportation of electricity and natural gas, as well as entities whose income derives solely from secondary activities.
Understanding the Tax Obligations for Nonresident Legal Entities
Beginning January 1, 2025, all nonresident entities, whether acting individually or as part of a group, are potentially liable for the additional turnover tax if they provide goods or services in Romania or export goods from the country. This requirement applies irrespective of their CIT status in Romania.
Entities subject to this additional turnover tax will fall under specific classifications outlined by the CAEN (National Classification of Economic Activities) codes, which include but are not limited to:
- 0610: Extraction of crude petroleum
- 0620: Extraction of natural gas
- 0910: Services related to the extraction of crude petroleum and natural gas
- 1920: Manufacture of refined petroleum products
- 3522: Distribution of gaseous fuels through pipelines
- 4671: Wholesale trade of solid, liquid, and gaseous fuels
These codes define the principal and secondary activities of entities that will incur the additional tax.
Tax Calculation for Nonresidents
For nonresidents operating without a permanent establishment in Romania, the additional turnover tax is computed as 0.5% of total turnover, minus revenue that is specifically excluded and deducting ongoing investments and asset depreciation. For these nonresident entities, total turnover may also include sums reported in customs declarations and intra-Community delivery documents.
Important Payment and Administrative Details
The additional turnover tax is generally due by the 25th of the month following each quarter. However, for nonresidents with a permanent establishment in Romania, the deadline for the fourth-quarter payment aligns with the CIT return, which is due by June 25 or the 25th day of the sixth month following the end of the fiscal year.
Non-EU legal entities must appoint a fiscal representative—a Romanian entity tasked with ensuring compliance with tax obligations. This appointment is optional for EU-resident entities. The fiscal representative will share liability for the tax, necessitating thorough scrutiny of their financial and operational accountability.
Guarantee Requirements for Nonresidents
Nonresident entities are required to secure a guarantee of €1 million in favor of the Romanian tax authorities for the payment of the additional tax. This may be provided in the form of a bank guarantee or a cash deposit with the Romanian treasury.
The guarantee must be established within 15 days following significant milestones, including the emergence of revenue generation or the registration of the fiscal representative. Failure to pay the additional tax within 30 days of the due date will result in the deduction of the tax amount from the guarantee, which must be replenished within 15 days to avoid disruptions in customs procedures.
Conclusion
The introduction of the additional turnover tax signifies a crucial policy shift that impacts nonresident entities within Romania’s oil and gas sectors. Companies operating in these areas need to understand their new tax obligations fully to ensure compliance and maintain smooth operations moving forward
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