Methodology for calculating the 2% annual monetary contribution established by GEO 114/2018

In brief

National Regulatory Authority for Energy (ANRE) Order no. 18/2019 details the methodology for calculating the annual monetary contribution payable by electric power, cogenerated electric and thermal energy, and natural gas licence holders.

In detail

Who has to pay the 2% contribution?

  • All holders of licences granted by ANRE for carrying out electric power, cogenerated electric and thermal energy (only for the electric power component), and natural gas activities.
  • Foreign operators, based in a European Union Member State, holding confirmation decisions treated as licences.

How much is the monetary contribution?

  • Holders of ANRE licences in electric power and / or natural gas have to pay an annual monetary contribution to ANRE equal to 2% of the turnover from the stated activities in the year covered by the licences granted.
  • For cogenerated electric and thermal energy licence holders, the 2% contribution applies to the turnover from the stated activities in the year covered by the licences granted for the electric power component.
  • For foreign operators, as described above, the 2% applies to the turnover achieved in Romania.

 

How is the 2% contribution paid?

The order stipulates two steps for payment of the monetary contribution due for year n: (1) licence holders have to submit to ANRE an estimate turnover statement for year n - 1, on the basis of which ANRE will issue an invoice (step 1 – estimate); (2) in year n + 1, once the year n actual turnover statement has been sent to ANRE, ANRE makes an adjustment based on the difference between the estimated and actual contribution due, then issues an invoice if appropriate (step 2 – adjustment).

 

How and when is the 2% contribution declared?

Step 1 – estimate

 

  • Licence holders owing this contribution to ANRE have to inform it by 15 March, through an "Official letter" signed by an empowered legal representative, of the estimated turnover expected from licensed activities in year n - 1. Based on that estimate, ANRE estimates the contribution due for year n and issues an invoice to the licence holder. The contribution for year n is then checked in year n + 1 and an adjustment is made based on the difference between the estimated and actual contribution due.
  • Specific situations are also provided for the declaration method, such as when the licence is obtained in year n, it is held by a joint venture or if year n is the year of withdrawal / expiration of the licence and it is not extended.

Step 2 –  adjustment (actual)

  • To confirm the actual contribution due, licence holders have to send to ANRE, within five days after the statutory deadline, as prescribed by the law, for submitting the annual financial statements: (i) the turnover from year n activities for which the contribution is due and (ii) financial statements for year n registered with the tax administration. Licence holders have to respond to ANRE’s notification regarding the correctness and completeness of the data within a maximum of 10 working days as of the day the notification was received.
  • An adjustment is then made based on the difference between the estimated and actual contribution due. The adjustment is made in the period 1 June to 31 December of year n + 1. If the adjustment means that the licence holder has paid more than was due, the money will be retained as prepayment for the year n + 1 contribution, if the following two conditions are met simultaneously: (1) the operator has paid the monetary contribution for year n and (2) it holds at least one valid licence for year n and for year n + 1.
  • Monetary contributions exceeding RON 5,000 can be paid in equal quarterly instalments.
  • Late-payment interest of 0.02% and penalties of 0.01% of the amount due are applied in the event of failure to pay the owed contributions, calculated per day of delay.

Establishing the turnover – specific cases

  • The 2% contribution is based on the turnover achieved by the licence holders only from the activities covered by the licences granted by ANRE. The following specific cases are also provided:

a) For centralised market and balancing market operators, the turnover does not include the revenues from the sale of electric power / natural gas for the markets where the operator acts as a counterparty;

b) For electric power / natural gas suppliers / traders which act as intermediaries for the market with continuous double bargaining, turnover does not include revenues from their electric power / gas transactions;

c) For suppliers / traders, turnover does not include the cost of distribution, transport, storage, system services, centralised market management, cogeneration contribution and excise duty to final customers, or the purchase price of electric power or natural gas as cargo;

d) For natural gas suppliers which also act as producers, the turnover does not include the consideration for the oil charge;

e) For distribution operators, other than concessionaires, which also provide resale electric power to network users, the turnover does not include the costs incurred in connection with upstream network distribution services, transport services, centralised market management services, cogeneration contribution and billed excise duty to end-customers, nor the purchase of electricity as a commodity.

What are the consequences of non-compliance?

Failure to send or misrepresent the data after receiving ANRE’s request notifications constitutes a contravention in accordance with the provisions of art. 93 and 194 of the Law on Electricity and Natural Gas no. 123/2012, and sanctioned as follows:

  • For operators in the natural gas sector:

(i) individuals: fine of RON 1,000 to RON 2,000;

(ii) legal persons: fine of RON 10,000 to RON 200,000.

  • For other licence holders:

(i) individuals: fine of RON 2,000 to RON 4,000;

(ii) legal persons: fine of RON 5,000 to RON 100,000.

Source: Order approving the methodology for calculating and establishing the annual monetary contribution provided under art. 2 par. (31) of Government Emergency Ordinance no. 33/2007 on the organization and functioning of the National Regulatory Authority for Energy, as approved with amendments and completions by Law no. 160/2012, as introduced by the Government Emergency Ordinance no. 114/2018, and amending the Order of the President of the National Regulatory Authority for Energy no. 224/2018 regarding the approval of tariffs and monetary contributions perceived by the National Regulatory Authority for Energy in 2019, published in the Official Gazette no. 149/25 February 2019 and Annexes 1 and 2 to this Order, published in the Official Gazette no. 149 bis / 25 February 2019.

The takeaway

ANRE’s Order 18/2019 details the calculation methodology, the obligations and deadlines related to the monetary contribution due by licence holders in the fields of electricity, electricity and heat in cogeneration, and natural gas.

Licence holders obliged to pay the 2% monetary contribution for the year 2019 have to submit to ANRE by 15 March 2019 the 2018 estimated turnover from activities covered by the licences held. Based on this information, ANRE calculates the monetary contribution and issues an invoice. The 2% monetary contribution due for 2019 is adjusted based on actual turnover figures and the final amount due is confirmed in 2020. Thus, within five days of the statutory deadline for submitting the annual financial statements to the tax administration authority, licence holders have to submit to ANRE the actual turnover together with the financial statements for the year 2019. The adjustment of the monetary contribution for 2019 will take place between June - December 2020 and consists in invoicing for the difference between the amount originally paid and the amount calculated based on the actual turnover for 2019. If this difference is negative, the resulting amount will be considered an advance payment of the contribution for 2020.

For holders of ANRE licences granted for the development of activities / services in the field of cogenerated electric and thermal energy (for the thermal energy component only), and for the thermal energy produced in a centralised system, the monetary contribution is set at 0.1% of the turnover from thermal energy activities covered by these licences in 2018, but not less than RON 3,125 (according to the provisions mentioned in Annex 2 of this Order).

© [2019] [ PricewaterhouseCoopers Tax Services S.R.L.  ]. All rights reserved. PwC and PricewaterhouseCoopers refer to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. At PwC, our purpose is to build trust in society and solve important problems. PwC is a network of firms in 158 countries with more than 236,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.ro.

Contact us

Daniel Anghel

Partner, Tax and Legal Services Leader, Romania

Ionut Simion

Country Managing Partner, Romania

Diana Coroaba

Partner, Tax Services, Romania

Ionut Sas

Partner, Tax Services, Romania

Andreea Mitirita

Partner, Tax Services, Romania

Follow us