The Council of State, Greece’s Supreme Administrative Court, heard, last week, an appeal filed by energy company Heron and the Mytilineos metals and energy group’s Protergia and Corinth Power companies to challenge a tax formula applied for windfall profits of electricity producers.
The energy ministry has adopted a windfall tax formula proposed last year by RAAEY, the Regulatory Authority for Waste, Energy. It establishes windfall earnings to be taxed by comparing profits in 2022 with those of 2021.
The plaintiffs, in their case, contend that the use of 2021 as a base year for the comparisons is incorrect as it represents the inaugural year of the target model, which brought about anticipated inaccuracies as market players sought to adjust to this new mechanism.
Authorities ought to have gone back further in time for a fairer comparison with 2022 results before determining windfall profits to be taxed, the plaintiffs have argued in their case.
The Council of State will, most likely, uphold the windfall tax formula being applied as it has raised significant amounts for the Energy Transition Fund, helping millions of households and enterprises cope with the energy crisis through subsidized energy.
A decision by the Council of State is expected imminently.