Netherlands: Draft bill on temporary windfall profits tax on electricity producers

Would introduce a temporary 90% tax on the windfall profits of inframarginal electricity producers

Would introduce a temporary 90% tax on windfall profits

The Ministry of Economic Affairs and Climate Policy and the Ministry of Finance published a draft bill on 27 January 2023, that would introduce a temporary 90% tax on the windfall profits of inframarginal electricity producers.

The tax would apply with respect to electricity generated in the Netherlands or in the Dutch territorial waters of the North Sea that has been fed into the electricity grid, or into a direct line of which the power plant has an installed capacity of 1 megawatt (MW) or more. Only electricity generated with the inframarginal energy sources wind energy, solar energy, hydropower, biomass fuels, biogas, waste and nuclear energy, as well as electricity generated from coal, would be subject to the tax.

The tax is proposed to apply retroactively to 1 December 2022, and the entire tax period will cover the months 1 December 2022 through 30 June 2023. The European Commission (EC) will evaluate it no later than 30 April 2023, after which the tax may be extended or amended.

The draft bill will be open for internet consultation until 16 February 2023.

Read a February 2023 report prepared by the KPMG member firm in the Netherlands


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