An Excess Profits Tax is levied on companies that benefit from something they are not responsible for. The war caused energy prices to skyrocket, allowing gas, oil and coal companies to make skyrocketing financial profits. Europe imposes a 33% tax on these companies on their excess profits.
US energy giant ExxonMobil believes Europe is exceeding its statutory powers with this tax on excess profits. He then appealed to the Luxembourg Court of Justice through its German and Dutch branches. The tax is “counterproductive” and “will undermine investor confidence, discourage investment and increase dependence on imported energy and petroleum products,” the court document read.
“We are aware that the energy crisis in Europe is weighing heavily on households and businesses,” spokesman Casey Norton told Reuters news agency. “But the tax will not address a potential energy supply shortage and cannot realistically have an impact at this time. (…) ExxonMobil has been one of the largest investors in the European oil industry over the past decade, with more than 2.8 billion euros Whether we invest in Europe depends on how attractive and competitive Europe is globally.”
In early December, ExxonMobil chief financial officer Kathryn Mikkels said the excess income tax would cost the company “more than $2 billion” next year.
