Electricity producer windfall tax period extended and calculation method established: GEO no. 27/2022

The takeaway

Government Emergency Ordinance no. 27/2022 established that electricity producers have to declare and pay monthly to the state budget a windfall tax of 80% on additional income from the sale of electricity during the period 1 April 2022 to 31 March 2023. Payments should be made by the 25th of the month following that for which it is due using the methodology provided in Annex 6 to the Ordinance. Such windfall tax payments do not apply to production capacity put into operation after the date of entry into force of this Ordinance.

In detail

The tax on additional income generated by electricity producers, with the exception of electricity producers based on fossil fuels, including cogeneration, was introduced by Law no. 259/2021 on capping prices and offsetting invoices. National Agency for Fiscal Administration Order (OPANAF) no. 64/2022 regulated the manner of declaring this 80% tax applied on the additional revenues generated by electricity producers resulting from the difference between the average monthly selling price of electricity and the price of RON 450/MWh for the period 1 November 2021 to 31 March 2022

Government Emergency Ordinance no. 27/2022 (GEO no. 27/2022) extended the application of the tax on additional income generated by producers of electricity from renewable sources for the period 1 April  2022 to 31 March 2023 to all electricity producers, except for production capacities put into operation after the date of entry into force of GEO no. 27/2022, and the methodology for calculating the 80% tax on additional income was established.

The additional income is calculated by multiplying the difference between the monthly selling price and RON 450/MWh by the difference between the monthly quantity physically delivered and the quantity of electricity delivered to Transelectrica. The 80% tax is then applied to that additional income.

Electricity producers can submit rectifying declarations, without calculating tax accessories, within 15 days after the Operator of the Romanian electricity and natural gas market operator (OPCOM) publishes  the final prices for the month of settlement.

The additional income tax has to be declared and paid to the state budget by the 25th of the month following that for which it is due.

The model and content of the declaration regarding the additional income tax will be approved by order of the president of the National Agency for Fiscal Administration within 15 days as of the date of entry into force of GEO no. 27/2022.

Failure by electricity producers to comply with the obligations to calculate, declare and pay the additional income tax constitutes a contravention and is sanctioned with a fine ranging from RON 100,000 to RON 400,000.

Source: [Emergency Ordinance no. 27/2022 on the measures applicable to final customers in the electricity and natural gas market between 1 April 2022 and 31 March 2023, as well as for the amendment and completion of some normative acts in the field of energy, published in the Official Gazette no. 274 dated 22 March 2022]