1 April 2017, the amendments to the Law "On Excise Tax" were adopted establishing procedures for the movement of natural gas and excise duties for the calculation of the open natural gas market conditions and a number of other refinements and additions.
Further, please find relevant modifications with regard excise tax on natural gas.
Amendments to the law
It is foreseen that natural gas supplied to the taxable end users corresponding to the Combined Nomenclature codes 2711 11 00 and 2711 21 00 are a subject to an excise tax, except in cases defined by the law. If natural gas is used as fuel, the tax rate is 1.65 euros per 1 megawatt-hour taking into account the gross calorific value of natural gas while using as a fuel - 9.64 EUR per 1 megawatt-hour. The tax rate is 0.55 EUR per megawatt hour if natural gas is used as fuel for industrial production and agricultural raw materials at pre-treatment processes.
Natural gas is not subject to tax which is used by the end-user for other purposes than motor fuel or heating fuel for dual use in accordance with the conditions referred in the Law or used by mineralogical processes. As well, the natural gas exempt from tax which is used in agriculture (greenhouse heating, industrial buildings and poultry incubator heating) by the end-user.
The law stipulates that operations related to natural gas, including liquefied and compressed natural gas, if it is not transported through pipeline require authorized warehouse license. If the natural gas is sold as a fuel, the merchant should have a retail license.
New Regulation by the Cabinet of Ministers
There are new Regulation by the Cabinet of Ministers on the movement of natural gas and excise duty arrangements which will also set procedures for the licensing of natural gas retail and authorised warehouse status for operations with natural gas. According to the draft, a special permit (license) for natural gas as a fuel retail will be required also in cases when natural gas retailer obtains natural gas at retail site through pipeline.