Due to the enormous turmoil on the energy market, rising prices and problems with access to raw materials, there was an expectation of introducing state regulations that would weaken this phenomenon, the more so that due to the upcoming winter, the demand for energy will only increase. Windfall tax, i.e. the tax on windfall profits, was initially proposed by the European Commission as a Community response to the threats related to rising inflation, ever higher costs and possible restrictions on access to energy.
According to the assumptions, possible funds obtained from the new tax are to be used to fight the energy crisis and to support the most endangered entities. The planned levy is to be imposed on energy companies as a tax on extraordinary revenues resulting from the occurrence of independent external circumstances, such as the war in Ukraine or the interruption of supply chains around the world. After all, it was energy companies that, due to the aforementioned turbulences, began to generate more and more income, while a large part of the society faced the threat of paying huge, unpaid bills.
Additionally, as part of the recommendations of the European Commission, it was postulated to introduce specific revenue limits for companies from the energy sector. Many experts even indicated that the application of maximum prices could make the windfall tax unnecessary.
The solutions presented above became the starting point for the proposal of the Polish government, which has recently started to present new ideas about how such a tax on extraordinary profits should look in our home country. At the moment, there is no draft legislation yet, currently you can only rely on statements of members of the government and the Ministry of State Assets, as well as media reports. Among the regulatory proposals that have appeared so far, it can be noted that:
- the tax, known as a levy, would bring the state funds in the amount of approximately PLN 13.5 billion, which would then be spent by a specially established special fund to support the most affected by the energy crisis, individual recipients by default;
- the tax would be imposed on not only energy companies, but also all enterprises that employ over 250 people and those whose annual net turnover from the sale of goods, services and products exceeded EUR 50 million;
- the tax base would be the difference between the profit margin in 2022 and the averaged profit margin from 2018, 2019 and 2021, respectively. (exclusion of 2020 as a pandemic, although it is also indicated that the correct goal is to calculate the average margin so that the tax is as high as possible),
- it will be possible to deduct expenses incurred on investments, acquiring new customers, expanding operations, producing energy, strengthening state defense, producing fertilizers or mining deposits from the tax base (this will be mainly used by state-owned companies);
- the amount of tax would be 50% of the positive difference between the profits, calculated according to the above calculation.
The proposal to introduce a tax structured in this way caused many reservations on the part of experts and entrepreneurs. The most shocking is the fact that it would be burdened not only by energy companies, as initially demanded by the European Commission, encouraging governments to take appropriate action, but by all large companies that generated more profit this year than before. The tax structured in the above-mentioned manner would therefore also be paid by entities which, in recent years, did not have to raise prices at all, but by increasing their expenditures or investing, naturally obtained more and more profits.
It is also worth mentioning that the proposed provisions may turn out to be unconstitutional. Particularly many reservations are raised by their attitude towards overarching principles, such as min. freedom of economic activity (freedom to set margins), prohibition of worsening the taxpayer’s situation, as well as prohibition of retroactive action. If the provisions were introduced in the same wording as it results from the information provided so far, they would apply to the tax year already in progress.
At the moment, it is difficult to find specificities, perhaps it will be the publication of the draft regulations that has been announced for next week. It may also turn out that the idea will be abandoned, which seems to be quite realistic given the amendment to the energy law and the RES Act addressed to the Senate, which provides for the complete abolition of the exchange obligation, i.e. the obligation to sell generated electricity through the exchange market. This could significantly reduce energy prices and, de facto, achieve the goal of supporting energy consumers without new fiscal burdens.
Perhaps the European Union will come to the rescue, after all, it was the European Commission that gave the starting point for the considerations described above.