Irish Presidency open to an EU debate on taxing oil companies’ windfall profits

Brussels – The Irish Presidency of the Council of the European Union is open to discussion on the taxation of oil companies’ windfall profits. The issue, raised by Germany, Italy, Austria, Poland, Spain, and Portugal in a letter sent to the Irish Finance Minister, Simon Harris, will be addressed through bilateral discussions between Harris and his European counterparts. The issue is then expected to be discussed at the informal Ecofin Council meeting on 18 and 19 September in Dublin.

The six countries are calling for the establishment of a common European framework to tax oil companies’ windfall profits, with a particular focus on the refining and fuel distribution sectors. In the letter, the ministers argue that oil companies are benefiting from margins on refined products that have risen more sharply than crude oil prices, against a backdrop of soaring fuel prices linked to the war in Iran.

“Governments across Europe are rightly paying close attention to developments in the energy markets and the impact on households, businesses, and the economy as a whole,” said a spokesperson for the Irish Presidency. The Tánaiste, Deputy Prime Minister and Minister for Finance, “will discuss with his fellow European ministers the most appropriate way to address the issues raised in their letter.” 

The European Commission, however, continues to stress that the taxation of windfall profits falls within the competence of the Member States. “Member States can already make use of their national tax powers,” reiterated the EU Commission spokesperson, provided that the measures comply with European law. Brussels also points out that in 2022 it had proposed a similar measure, but under “extremely exceptional circumstances,” when energy prices had reached unprecedented levels.