The European Commission proposed this Wednesday a 33% tax on the extraordinary profits of oil, gas, coal and refinery companies, whose income should be “collected by the Member States and redirected to energy consumers”, to alleviate prices .
“The Commission proposes a temporary solidarity contribution on the capital gains generated by activities in the oil, gas, coal and refinery sectors”, announces the institution.
In information released today, the community executive points out that “this contribution for a limited time would maintain the investment incentives for the green transition”, and should be “charged by the Member States based on the profits of 2022 with an increase of more than 20 % compared to the average earnings of the previous three years” and applies to fossil fuel companies.
“Revenue would be collected by member states and redirected to energy consumers, in particular vulnerable households, hard-hit businesses and energy-intensive industries,” and could also support renewable energy “cross-border projects” and energy efficiency, help.
According to the European Commission’s proposal on this emergency intervention to deal with high energy prices, to which the Lusa agency had access, the idea is to introduce an “applicable rate for calculating the temporary solidarity contribution, at least 33%”, which will be “applicable in addition to the normal taxes and fees applicable under the national legislation of a Member State”.
In particular, “the temporary solidarity contribution must function as a redistribution measure to ensure that the companies in question that have obtained extraordinary profits as a result of unexpected circumstances contribute proportionally to the improvement of the energy crisis in the internal market”, argues the community . executive.
To calculate the extraordinary income to be taxed, the taxable profits of European Union companies in the oil, gas, coal and refinery sectors for the fiscal year beginning on or after January 1, 2022 will be taken into account, remaining as surplus of the previous ones an increase of 20% with respect to the average of the last three fiscal years.
The community executive justifies that, in recent months, EU companies whose turnover depends 75% on the oil, gas, coal and refining sector have seen their profits increase due to “the sudden and unpredictable circumstances of the war, the reduction of energy supply and increased demand due to record high temperatures.
“This approach to determining the calculation base ensures that the solidarity contribution in the different Member States is proportional and, at the same time, this approach to setting a minimum rate guarantees that the solidarity contribution is fair and proportionate”, concludes the institution.
In the information provided to the press, the community executive has added that this emergency intervention in the European energy markets is intended to “deal with the recent and drastic price increases” and the “serious imbalance between energy supply and demand , due in large part to the continued weaponization of its energy resources”.
“To alleviate the increasing pressure this puts on European households and businesses, the Commission is now taking the next step to tackle this problem by proposing exceptional measures,” it further states.
Last Saturday, the Portuguese Finance Minister, Fernando Medina, argued that the rise in energy prices “cannot be solved with taxes.”
Geopolitical tensions over the war in Ukraine have affected the European energy market.
Source: TSF
