EU Court adviser deems temporary energy over-profit levy legal amid ongoing tax debate
The Advocate General of the European Court of Justice has concluded that the EU's temporary solidarity contribution on excess energy profits for 2022-23 was lawful. The opinion will guide the Court’s final ruling, which is awaited.
In a set of written conclusions submitted in Luxembourg, Advocate General Athanasios Rantos affirmed that the European Union’s emergency regulation imposing a temporary solidarity contribution on extraordinary profits earned by oil, gas, coal and refinery companies in 2022-23 was compatible with EU law. The regulation, adopted by the Council of the European Union after energy prices spiked following the Ukraine conflict, required member states to collect the levy on profits that exceeded the average of previous years.
Legal challenges brought by firms in Belgium, Ireland and Italy led those national courts to refer the matter to the European Court of Justice for a preliminary ruling. Although the Court’s final judgment is still pending, the judges frequently align with the Advocate General’s recommendations. The outcome is of particular interest to Germany, where leaders such as Manuela Schwesig and Anke Rehlinger have called for a national over-profit tax on fuel companies if the EU fails to reach a consensus, especially as fuel prices have risen amid the Iran conflict.
Why it matters
The ruling will determine whether the EU can lawfully tax excess energy profits, affecting future fiscal responses to energy crises.
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