Portugal Imposes 33% Windfall Tax on Oil Profits Amid Energy Surge

Portugal's government has approved a 33% windfall tax on extraordinary profits in 2026 for oil and refining companies benefiting from an energy price surge due to the Iran war. The tax applies to profits exceeding 20% of the average in 2024-2025, aiming to fund measures supporting households and sustainable investments.

Portugal's government announced on Thursday the approval of a 33% windfall tax targeting the extraordinary profits gained in 2026 by oil and refining companies. This tax responds to the significantly increased energy prices caused by the ongoing Iran war, as stated by the finance ministry.

The windfall tax will focus on profits surpassing 20% of the average from 2024 and 2025, addressing the soaring costs faced by households and businesses. The ministry described the levy as a necessary solidarity mechanism to mitigate the impact of high fuel prices, while also supporting sustainable economic measures.

Major oil companies operating in Portugal, such as Galp Energia, which reported notable profit increases amid global tensions, will be affected. The proposal will proceed to parliament, where it is anticipated to gain cross-party approval, continuing a fiscal approach first implemented during the 2022 energy crisis linked to the Ukraine conflict.