ExxonMobil wants to prevent the taxation of the “surplus profits” of the energy giants in Europe

The American oil company ExxonMobil seized, on Wednesday December 28, the Court of Justice of the European Union (CJEU) against the tax on the “superprofits” of the energy giants decided by the European Commission, which could according to the company “discourage investment”.

Adopted at the end of September and officially baptized “temporary solidarity contribution”, this charge is supposed to be paid by the producers and distributors of oil, gas and coal who have made huge profits thanks to the surge in prices following the war in Ukraine. The system allows EU states to deduct 33% of taxable profits for 2022, which are more than 20% higher than the average for the years 2019-2021, in order to redistribute them to households and businesses faced with the explosion of bills.

In proposing it, the European Commission had taken care not to use the word “tax” because any new tax provision at European level would have required the unanimity of the Twenty-Seven, a more complicated and risky procedure than adoption at the qualified majority. The idea was in particular to avoid procedures like the one initiated on Wednesday before the CJEU in Luxembourg by the German and Dutch subsidiaries of ExxonMobil. The CJEU can be seized by a company when it considers that an EU institution has infringed its rights.

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“We are aware that the energy crisis in Europe is weighing heavily on families and businesses, and we are working to increase Europe’s energy supply”, underlines a spokesperson for the company, Casey Norton, in a message sent to Agence France-Presse (AFP). But the taxation of “superprofits” is “counterproductive”, he says. She “will undermine investor confidence, discourage investment and increase dependence on imported energy and petroleum products”he adds.

“Investing for the green energy transition”

The Commission has “taken note of the complaint filed” by ExxonMobil, but “maintains that the measure in question was in full compliance with EU law”, reacted to AFP a spokeswoman for the European executive. According to her, the Twenty-Seven were right to resort to an emergency text (i.e. adopted directly by the States without consultation with the European Parliament) in the name of the “solidarity” in the face of the energy crisis.

During a presentation to investors in early December, ExxonMobil’s chief financial officer assessed that the European tax would cost the group “more than 2 billion dollars [1,9 milliard d’euros] ». She also specified that the final amount would depend on how member states integrate this measure into their 2023 budget. In total, ExxonMobil posted a net profit of $37.6 billion in the second and third quarters alone.

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The mechanism “targets excessive profits in oil, gas, coal”and so “aims to maintain incentives to invest in the green energy transition”, while the funds collected will be exclusively donated to vulnerable consumers and businesses and energy-intensive industrialists, argued this spokesperson. Brussels estimates that the device could bring some 25 billion euros to the Member States.

US President Joe Biden denounced these “war profits”lamenting that the profits generated by the hydrocarbon companies are returned to the shareholders while the prices at the pump for motorists remained high.

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The World with AFP

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