The European Commission rejects an EU tax on energy companies’ windfall profits, requested by six member states

The European Commission reaffirmed on Friday that it does not support introducing a European Union-wide tax on windfall profits earned by energy companies after prices rose as a result of the conflict in the Middle East. The position was presented by European Commissioner for Economy Valdis Dombrovskis after the meeting of EU finance ministers held במסגרת Ecofin.

Spain, Germany, Italy, Poland, Portugal and Austria have twice asked the European Commission in writing to examine the measure. The member states cite the precedent set in 2022, when a similar tax was used after Russia’s invasion of Ukraine.

Dombrovskis said national governments are better positioned to impose such a tax individually, if they decide it is necessary, than to establish a common EU-wide tax. The commissioner thus repeated the position he had previously expressed, including at the informal meeting of finance ministers in Dublin in September.

However, the 27 member states and the European Commission agreed to create a working group to examine the issue and identify best practices. A day earlier, German Finance Minister Lars Klingbeil had argued that taxing the windfall profits of oil companies could help reduce energy prices and called on the Commission to act quickly.