Austrian Federal Law on Energy Crisis Contribution – Electricity (EKBSG) and Austrian Federal Law on Energy Crisis Contribution – Fossil Fuels (EKBFG)

On EU level a EU regulation imposing a windfall tax on energy companies was adopted on 6 October 2022. On 18 November 2022 the government tabled a legislative motion for implementing two of the key measures – a cap on revenues for electricity producing companies and a “solidarity contribution” for surplus profits in the fossil fuels sector. This motion was already passed by the lower house of Austrian Parliament (Nationalrat) and upper house of Austrian Parliament (Bundesrat), and has been published in the Federal Gazette on 29 December 2022.

Austrian Federal Law on Energy Crisis Contribution – Electricity (EKBSG)

For market revenues obtained from the sale of domestically produced electricity produced from wind energy, solar energy (solar thermal and solar photovoltaic), geothermal energy, hydropower, waste, lignite, hard coal, crude petroleum products, peat, biomass fuel excluding biomethane, including implementing sales rights on electricity the cap amounts to EUR 140 per MWh of electricity and should be applied as of 1 December 2022.

The draft provides that 90% of the surplus revenues, meaning the positive difference between the market revenues of the debtor and the cap, are to be paid as energy crisis contribution – electricity (EKB-S) to the competent tax authority .

This contribution amount is deductible as operating expenses under section 4 para. 4 Austrian Income Tax Act (EStG).

A limited deductible amount of tax-favoured investments into renewable energies and energy efficiency may be subtracted from the EKB-S. Tax-favoured investments of an affiliated company which is not the debtor, are attributable (on a proportionate basis) to the debtor. Section 2 EKBSG provides for numerous exemptions (e.g. for selling electricity produced from plants receiving a market premium under the Austrian Federal Act on the Expansion of Energy from Renewable Sources (EAG) insofar as the revenue is subject to a repayment obligation under EAG or for electricity used for congestion management).

The debtors are operators of generation facilities as defined in section 7 para. 1 subsec. 20 Austrian Electricity Act 2010 (EIWOG 2010) with an installed capacity of over 1 MW.

Under section 5 of the EKBSG draft the EKB-S is due at the following dates and is to be paid to the respective tax authority competent for VAT collection:

• • • For the period 1 December 2022 – 30 June 2023 on 30 September 2023
    • For the period 1 July 2023 – 31 December 2023 on 31 March 2024

Austrian Federal Law on Energy Crisis Contribution – Fossil Fuels (EKBFG)

Domestic companies and domestic permanent establishments of companies domiciled in another member state, performing economic activities in the domestic market as defined in article 2 para. 17 of the EU Emergency Intervention Regulation in the crude petroleum, natural gas, coal and refinery sectors and generating at least 75% of their revenue from those activities, should be subject to the energy crisis contribution – fossil fuels (EKB-F) for the second half of 2022 and the year

If the profits of such companies lie at least 20% above the average of the years 2018-2021, they should be taxed at 40%.

If the company can account for investments into renewable energies, this tax rate may be reduced to the lowest of 33%. Tax-favoured investments of an affiliated company which is not the debtor, are attributable (on a proportionate basis) to the debtor

The EKBFG provides that until 30 June 2023 a prepayment is to be made for the first reference period (1 July 2022 – 31 December 2022) and a statement to the Austrian Tax Authority for Large Traders is to be submitted within 2 months as of the corporate income tax notice for 2022 has been issued.

Similar measures should apply for the second reference period (1 January 2023 – 31 December 2023) as well. The EKBFG provides that for the second period a prepayment is to be made until 30 June 2024 and the statement is to be submitted within 2 months as of the corporate income tax notice for 2023 has been issued.

Implications in practice

The EKBSG entered into force on 1 December 2022 and the EKBFG on 31 December 2022.

The large scope of both laws may lead to uncertainties in implementation. We are happy to support you with a first legal consultancy as well as with future information, notification and payment obligations.

Authors: Yasmin Lawson / Michael Wenzl