ExxonMobil sues EU for plans for a bloc-wide windfall Tax

ExxonMobil sued the European Union to stop the trade bloc from imposing an unanticipated tax on energy companies.

The US oil major wants to challenge the European Union’s authority to impose a 33% tax upon profits of energy companies during 2022’s fiscal year.

The Financial Times first reported that Exxon’s German and Dutch subsidiaries filed a lawsuit against European Union at the European General Court, Luxembourg on Wednesday.

The lawsuit challenges the EU’s authority for imposing a windfall tax upon energy sector profits. It argues that any tax must be agreed on by individual member states.

In September, the European Union presented its first plans for a tax on windfalls. This tax would tax “abnormally big profits” due to the rise in energy prices after Russia’s war with Ukraine.

The EU hopes that 140 billion euros of revenue will be generated by a 33 percent profit tax, which it intends to pass along to households and businesses.

The European General Court will make the final decision on Exxon’s lawsuit. However, any future ruling may be appealed to via the European Court of Justice.

An ExxonMobil spokesperson said, “Our challenge only targets the counterproductive windfall tax, not any other items in the package to lower energy prices.”

“This tax will reduce investor confidence, discourage investments, and increase dependence upon imported energy and fuel products.”

“European industries are already facing a very real competitive crisis and governments must support the production of reliable and affordable energy.”

These issues will be addressed by EU leaders. We will continue to collaborate with them. Thoughtful policy is crucial.”