The Government could eliminate the tax on special constructions for offshore platforms in the Black Sea

Ioana Maria Petrescu, the Minister of Finance, announced that the Government will except the companies operating offshore platforms in the Black Sea from paying the tax on special construction. Hence, companies such as Petrom, Lukoil or ExxonMobil will not pay the 1.5 percent tax introduced this year for the drilling wells they operate. 

“We are looking to meet the needs of investors and we aim to create a fiscal environment to enhance sustainable development, pro business. Thus, we have found a solution to exempt the offshore platforms operating in the Black Sea from paying the tax on constructions”, stated the minister during “Romania, the key to diverse, secure energy for Europe”, conference organized by Huston’s World Affairs Council.

Petrescu again emphasized that the tax on special construction will be reduced from 1.5 percent to 1 percent of the estimated value of constructions, the fiscal amendment which is supported by the Government being in progress, as it has  already been approved by the Committe on Economic Policy, Reform and Privatization and the Committe on Budget, Finance and Banks within the Chamber of Deputies.

“We support the consistent reduction by 33 percent of construction taxes which automatically means the diminution of the fiscal burden for the business environment. This is the solution we have reached as a result of consultations with investors and the Parliament”, she added.

The tax on special construction was one of the highly disputed fiscal measures introduced in 2014 being unanimously criticized by the business environment. As it is calculated based on the estimated value of concerned structures, it had a negative impact on economic operations, since it actually taxes the value of the investment of such constructions.

Its payment is made on a biennial basis and it was said to generate revenues of about 500 million lei, yet subsequent estimations revealed that this tax will bring over 1.5 billion lei to the state budget in 2014.