Banco Sabadell | In the new strategy of measures to tackle the energy crisis that the European Commission is set to present this week, Brussels is reluctant to push for a European tax on energy companies’ windfall profits despite rising oil prices. Although Spain and four other countries are calling for a coordinated levy, the EC is leaving the decision to individual Member States. The new European plan to tackle the energy crisis is limited to energy-saving measures, electrification and greater flexibility in state aid. The Commission argues that the context is not comparable to that of 2022 and that there are legal and fiscal obstacles.
Assessment: Positive news with limited impact, as for the time being no coordinated tax is expected to be levied on energy companies’ windfall profits, similar to the temporary solidarity levy introduced to tackle the Ukraine crisis. We recall that at that time Spain applied, amongst other measures, a 1.2% tax on energy companies’ sales, applicable in 2023 and 2024, which affected Iberdrola, Naturgy, Endesa, Acciona, Acciona Energía and Repsol.
