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20 Nov, 2022 05:28

Austrian energy companies slammed with massive windfall tax

The levy is set to be 40% of excess profits on top of regular taxes
Austrian energy companies slammed with massive windfall tax

The Austrian government plans to introduce a new windfall tax on energy companies, Vice Chancellor Werner Kogler and Finance Minister Magnus Brunner announced at a press conference on Friday.

The levy will amount to 40% of excess profit for oil and gas companies, according to the announcement.

As Kogler explained, the government will take a company’s average profit between 2018 and 2021 as the basis for the tax. If current profit is more than 20% above this average, 40% will be skimmed as a windfall tax. However, since the corporate tax on this profit will continue to be due, companies will end up giving up a total of 65% of these profits, Kogler added.

He noted also that if a company can prove that it is investing in renewable energy, the levy drops from 40% to 33%.

In addition to the new windfall tax on oil and gas companies, power providers will also see excess profits taxed. Utility companies will be subject a tax rate of 90% on any profits exceeding €180 per megawatt-hour, Kogler explained.

Both levies will be in place until the end of 2023. The tax on oil and gas companies will apply retroactively, starting from July 1, while the one for power providers will take effect on December 1, 2022.

For more stories on economy & finance visit RT's business section

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