Netherlands to raise $3.2 billion with windfall tax on fossil fuel companies

The Dutch government intends to levy a windfall tax on fossil fuel companies retroactively for the year 2022, it said on Tuesday. In a letter to parliament, the Finance Ministry described the decision as a temporary emergency measure taken "in connection with the high energy prices".

The Dutch government intends to levy a windfall tax on fossil fuel companies retroactively for the year 2022, it said on Tuesday.

In a letter to parliament, the Finance Ministry described the decision as a temporary emergency measure taken "in connection with the high energy prices". The government expects the tax, which it called a "solidarity contribution", to raise 3.2 billion euros ($3.16 billion). The proceeds will be used to fund a price cap on energy for households announced in October.

Companies with activities in the oil, natural gas, coal and petroleum refining sectors are subject to the 33% tax, which is to be levied on "excess profits". Excess profits are profits that are more than 20% above the average level of 2018-2021, the ministry said.

Countries around the European Union have been announcing windfall taxes on oil and gas firms as part of emergency measures to help consumers.