Germany Imposes New Taxes on Oil, Gas, and Coal Firms

German Finance Ministry sources told Reuters that the government plans to impose a special tax by deducting 33% of the windfall profits made by oil, coal and gas companies, which could generate revenues of between 1 billion and 3 billion euros.

The sources added that the tax, which is called the "European Union's contribution to the energy crisis", will affect a low number of companies, targeting their profits in 2022/23 and will be implemented by the end of this year.

According to the sources, Germany is in talks on the tax at the level of the European Union and has discussed several ways to implement the tax, adding that the chosen tool involves the least legal risks.

The planned oil and gas sector tax differs from the one announced by Germany on Tuesday, which will apply to electricity windfall from September 1, 2022, and will continue until at least June 2023.

Katarina Beck, the Greens' finance spokeswoman, said the planned tax was likely to be circumvented on a large scale by companies that shift their profits abroad, limiting their revenue.

"The Ministry of Finance's project to collect unexpected profits for oil and gas companies is much less than necessary," Beck said in a statement, stressing that the profits tax on gas and oil should range from 60% to 80% to roughly correspond to the electricity sector tax of 90%.