Czech Parliament Adopts 60% Windfall Tax for Energy Companies, Banks

The Chamber of Deputies approved a bill which, if approved by the Senate and signed by the president, will impose a 60% windfall tax on the profits of energy companies and banks deemed excessive.

The Czech government hopes the windfall tax for energy, oil and mining companies and banks will raise €3.5 billion next year.

Revenues will go directly to the national budget and are expected to cover costs related to national caps on gas and electricity prices.

“I have proposed a rate of 60% for the years 2023 to 2025,” Finance Minister Zbyněk Stanjura (ODS, ECR) told Czech lawmakers on Friday (4 November).

Just a few hours after the Chamber of Deputies approved the text, EPH, one of the country’s largest energy companies, decided to move its subsidiary company EP Commodities, which specialises in trading in energy commodities, abroad.

EPH, owned by Czech billionaire Daniel Křetinský, said in a press release that it agrees with the need to use part of the profits generated by energy companies to help people because of the emergency but believes the bill goes too far.

Experts warn that the legislation could push other companies out of Czechia as the proposed windfall tax rate of 60% is stricter than in other countries.

EU energy ministers agreed to a minimum windfall tax rate of 33% in September.