The EU ministers have adopted tweaked plans for a temporary tax on the"surplus profits” of fossil fuel producers as part of a package of measures to help offset soaring power and gas bills in the region in the wake of Russia’s war on Ukraine. Following an emergency meeting of EU energy ministers, the European Council said EU oil, gas, coal producers, and refiners will see their surplus profits in 2022 and/or 2023 taxed at at least 33%. Surplus profits are defined as a 20% increase in earnings above the average taxable profits generated in the four fiscal years starting in January 2018. Under measures first proposed by the European Commission on Sept. 14, only profits in 2022 were to be subject to the windfall tax on profits that are at least 20% above the average profits of the previous three years. At the time, the commission estimated the tax could bring in around Eur25 billion ($25.2 billion) of public revenues.
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