Austria Boosts Energy Windfall Tax as Profit Debate Lingers

(Bloomberg) -- Austria plans to adjust a windfall tax on oil and gas companies so that it kicks in at lower profit levels, part of efforts to contain public discontent over growing corporate earnings at a time of rising living costs.

The levy that skims 40% of additional net income will apply to profits exceeding a pre-crisis average from 2018 to 2021 by more than 10%, compared with the 20% threshold in place until now, the government in Vienna said in a statement late Saturday.

“It’s not acceptable that energy companies profit from the crisis when clients are bombarded with horrendous bills,” Chancellor Karl Nehammer said in the statement.

The announcement comes as opposition parties put rising interest rates and high inflation at the center of their policy agenda almost a year before general elections are due in Austria.

The government and a lobby group for banks announced some concessions in the past week for households hit with spiraling mortgage payments. The latest move on fossil-fuel companies follows a similar tightening for power producers, which have to contribute 90% of profits deemed excessive.

National energy company OMV AG paid a tax contribution of about €90 million ($97 million) for six months in 2022 after the levy was introduced.   

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