Announced by the European Commission solidarity tax on windfall profits will have a very limited impact on European gas and fuel companies, and PKN Orlen, Repsol and OMV can feel it the most – believe analysts of the Fitch rating agency.
In addition to the largest Polish multi-energy concern, there are concerns from Spain and Austria. Both deal with crude oil processing and distribution of petroleum products.
Fitch experts complete the list of companies that will be most affected by the solidarity tax with TotalEnergies and CEPSA. The first is a French petrochemical company and the second is a Spanish oil and gas company.
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Fitch analysts note, however, that the additional tax will not affect the current ratings of oil and gas companiesas they generate healthy cash flow in conditions of very high raw material prices.
According to the proposals of the European Commission, a temporary solidarity tax will be imposed on the extraordinary profits of companies that are based in the European Union and operate in industries including refineries, oil, gas and coal.
The companies’ results achieved after January 1, 2022 will be considered extraordinary profits, if they exceed by 20 percent. average profits for the last three yearsstarting on January 1, 2019.
According to the assumptions of the European Commission, each EU member state will be able to choose its own tax rate on windfall profits, but not higher than 33%. As only the activities of companies in the European Union are to be covered by the tax, its impact on Wintershall DEA and Eni will be minimal, as both companies operate mainly outside the EU.
On the other hand, the Hungarian Mol has already been taxed with windfall profits by the Hungarian government, so the impact of the tax proposed by the European Commission will be very limited.