Proposed windfall tax on fossil fuel producers
On 14 September 2022, the European Commission published a proposal regarding taxation of excess profits generated from business activities in the oil, gas, coal and refinery sectors. The proposal was later the subject of proceedings and political agreement on 30 September 2022 by the Energy Council. The purpose of the excess profits tax is to address the effects of the Russian invasion of Ukraine, which have led to record high prices on gas and electricity in 2022. These effects, together with other disruptions due to lower outputs of other energy sources and extreme weather conditions, have led to increasing electricity prices that are putting a lot of pressure on households as well as small and medium sized enterprises.
In short, the proposal includes:
The measures are proposed to apply from 1 December 2022 to 31 December 2023. The reduction targets of energy consumption shall apply until 31 March 2023. The mandatory cap on market revenues shall apply until 30 June 2023. The excess profits tax shall apply in addition to the regular taxes and levies applicable according to the national legislation of a Member State.
Schjødt's tax lawyers in Sweden and Norway are following the continuous development closely.