Ecofin has mandated the European Commission to explore the possibility of imposing taxes on windfall profits made by energy companies

Brussels – Taxes on the windfall profits of oil and energy companies: the EU has decided to try to introduce them. It will not happen immediately, as further technical and legal work is required, but “the Commission has been given a mandate to explore the possibility of taxes on windfall profits”, announced Simon Harris, Ireland’s Minister for Finance and current chair of the Ecofin Council by virtue of the Irish Government’s current presidency of the Council of the EU. 

The green light given by the Ministers for the Economy and Finance of the 27 Member States for fiscal measures targeting energy groups is, in some respects, a predictable outcome, though by no means a foregone conclusion. The Irish Presidency has launched discussions on this issue, raised by the Commission during today’s meeting (9 October). It was by no means certain that a broad consensus would be reached, yet Ecofin has produced a significant political agreement in the fight against high energy prices. 

All eyes are therefore on the European Commission, which is called upon to find the right solution. The Commissioner for the Economy, Valdis Dombrovskis, is keeping his cards close to his chest regarding the timetable and has not given any dates for the presentation of any measures. “We have begun the discussion,” is all he says in response to those asking when a proposal for a tax on companies’ windfall profits might be put forward. He does, however, clarify and reiterate the von der Leyen team’s position: “We believe that Member States are in a better position to set taxes in this area.” 

The approach adopted by Dombrovskis and the European Commission is characterised by respect for the competences and prerogatives of the Member States, which remain responsible for taxation and fiscal policy. The mandate received from the ministers will therefore be reflected in technical and legal work aimed at “helping and assisting Member States” in the possible imposition of the taxes under consideration, the Commissioner for Economic Affairs explains.