Czech Republic: Windfall profits tax on surplus market revenues of electricity producers
An amendment to the Energy Act recently passed introducing a “windfall profits tax” on surplus market revenues
Windfall profits tax on surplus market revenues of electricity producers
An amendment to the Energy Act recently passed introducing a “windfall profits tax” on surplus market revenues for most electricity producers and implementing part of EU Council Regulation 2022/1854 (6 October 2022) on an emergency intervention to address high energy prices. It also includes a mechanism to introduce caps on energy purchase prices for large businesses.
The amendment was published in the Collection of Laws on 30 November 2022 and became effective 1 December 2022.
The levy payers are electricity producers and any intermediaries participating in the wholesale electricity markets on behalf of the producers, irrespective of the market timeframe and whether bilateral transactions or transactions on a centralised market are involved. In addition, persons directly or indirectly related to levy payers who supply electricity to the wholesale market are subject to the levy.
The levy is imposed on the producer's surplus revenue determined as the difference between the revenue actually earned and the market revenue cap. The levy on surplus revenues amounts to 90% of the surplus revenues expressed in the Czech currency.
Read a December 2022 report prepared by the KPMG member firm in the Czech Republic
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.