Abstract:

Petroleum Activities Worldwide Are Subject To A Wide Range Of Taxation Instruments. For These Reasons, Both Romania And Other European States Encounter Different Types Of Royalties, Taxes, Fees, Or Additional Contributions Applied To The Oil And Gas Industry In Conjunction With The General Taxation Rules Specific To Each State. That's Why Establishing An Appropriate Oil And Gas Sector Taxation Regime For Romania Must Start With Analyzing The Specific Elements Of A Tax System In The Hydrocarbon Industry. For This Purpose, The First Part Of The Article Highlights The Main Elements That Characterize A Tax System Specific To The Hydrocarbon Extraction Sector, Such As The Three Main Types Of Legal Arrangements, With Differences In Terms Of Ownership Of The Exploited Resources And The Way In Which Taxes Due To The State Are Determined (That Is, Concession, Production Sharing Contract, And Service Contract). In The Second Part, The Paper Analyzes The Premises For Establishing An Optimal Fiscal System For Production Of Hydrocarbons, Such As The Physical/Technical Conditions And Development Prognosis Of The Industry. The Remainig Of The Paper Proposes The Main Elements That May Be The Basis Of An Adequate Tax System For Romania, Starting From The Analysis Of The Specific Conditions Of This Sector. As A Result, Finally, The Paper Concludes That Income Taxation Of The Hydrocarbon Sector Is The Most Appropriate Form For The Short, Medium, And Long-Term Economic Development Of The Country, Implying Low Tax Administration Costs, Predictability For Both Investors And The State, And Constant Revenues To The Public Budget, From The Moment The Exploitation Of The Oil And Gas Deposits Begins. Moreover, This System Is Transparent And Easier To Understand By The Public Opinion. Additionally, The System Could Be Made More Flexible So As To Accommodate The Production Conditions For Different Deposits, Possibly By Granting Tax Deductions Or Other Investment Incentives.