Extraordinary Contribution on windfall profits due by the enterprises operating in the energy and oil and gas sectors: criticalities and possible remedies

Prepared by Energy Team

According to article 37 of the Law Decree no. 21/2022, enacted into Law no. 51/2022, an extraordinary contribution is due by enterprises which (i) engage in the production or resale of electricity, natural gas or natural gas extraction; (ii) engage in the production, distribution and trade of petroleum products; (iii) permanently import electricity, natural gas or methane gas, petroleum products or bring such goods into the territory of the State from other States of the European Union. The taxable base for this contribution is represented by the increase in the balance of the receivable and payable transactions (for VAT purposes) carried out between October 1st, 2021 to April 30th, 2022, compared to the balance for the period from October 1st, 2020 to April 30th, 2021. The Extraordinary Contribution rate applicable is set at 25% in cases where the aforesaid increase exceeds Euro 5,000,000.00 and exceeds 10%. According to the provisions of the Director of the Revenue Agency’s Provision of 17 June 2002, the 40% of the contribution is due by June 30th, 2022 and remaining 60% by November 30th, 2022. 

It must be pointed out that the current Meloni government is planning significant changes to the current structure of the contribution, providing for an increase in the rate from the current 25% to 35% (which the Ministry of the Economy estimates will bring at least 3 billion to the Government) and the application of the same on profits and no longer on the VAT taxable amount.

The twin judgements no. 15217, 15216, 15215, 15214 issued by the Regional Administrative Court of Lazio

On November 16th, theRegional Administrative Court of Lazio ruled on the appeals lodged by several companies operating in the energy sector against the measure of the Director of the Revenue Agency (with the aim of conveying a claim of constitutional illegitimacy of the rule in question). Although this attempt did not achieved the desired goal for the companies, since the Regional Administrative Court rejected the appeals, declaring that its lack of potestas iudicandi in the case at stake (due to the failure to find the nature of a general administrative act or regulation act in the measure of the Director of the Revenue Agency), the twin judgments first of all pointed out the tax nature of the contribution in question.  In particular, they recognised the existence of all the elements typifying the said tax nature, namely:

  1. the legislative matrix;
  2. the dutifulness towards the State;
  3. the obligatory nature of the contribution;
  4. the direct link with public expenditure;
  5. the circumstance that the contribution affects an index of contributory capacity; and, finally,
  6. the purpose of containing price and tariff increases.

Moreover, the Regional Administrative Court pointed out that, by virtue of the tax nature of the contribution, the future jurisdiction will certainly lie with the tax court (which currently has no jurisdiction due to the absence of a tax deed). Therefore, it will be here that, if necessary, the taxpayer will be able to assert his reasons concerning the illegitimacy of the contribution, also highlighting the critical aspects of the rule from a constitutional point of view, trying, among other things, to convince the judge to refer the matter to the Constitutional Court for violation of the principle of equality (Article 3 of the Constitution) and of the ability to pay (Article 53 of the Constitution). In this regard, it must be said that the rule at stake, as it is structured, may affect not only the extra profits earned by operators in the aforesaid sector but the entire profit, thus entailing differential treatment between operators in the sector as well as a possible distortion of the market. Moreover, the envisaged non-deductibility of the contribution for income tax and IRAP purposes would conflict not only with the principle of the ability to pay but also with the principles of reasonableness and consistency, since any cost inherent in the profit should be deemed deductible.

Finally, it should be noted that for some companies operating in the energy&oil and gas sector (i.e. producers of renewable energy sources) for which there is already an obligation to retrocede to the GSE the revenues exceeding the reference price, according to Article 15-bis of the Decree ‘Sostegni-ter’, this extraordinary contribution could represent an additional burden, generating a discrimination of treatment with respect to other players in the sector.

In conclusion

There are obvious critical aspects of the contribution at stake that raise doubts as to its legitimacy. Therefore, the taxpayer (also attempting to have the issues of constitutionality referred to the Constitutional Court) might challenge this criticalities in the tax courts by claiming: the tax deed in case of failure to pay or insufficient payment of the contribution within the time limits provided for by the Law; the express or tacit denial of a refund request, where the Company has paid or decides to pay the contribution.

Beyond the perplexities relating to the calculation of the contribution in question on the data in the VAT tax returns (which are not necessarily aligned with the profits actually earned), the path of tax litigation must be assessed on a case-by-case basis, considering from time to time the applicability of principles deriving from the Constitution and/or EU law.

By way of example, tax litigation could be taken into account by those companies which had increased their profits in the period covered by the contribution in question due to other factors, such as asset disposals, or which were unable to take into account additional elements outside the VAT scope (on whose tax returns the contribution in question is calculated) such as negative differentials on derivatives and thus not only due to the increase in electricity prices.

Let’s Talk

For a deeper discussion, please contact:

Franco Boga

PwC TLS Avvocati e Commercialisti


Carlo Romano

PwC TLS Avvocati e Commercialisti


Maurizio Foti

PwC TLS Avvocati e Commercialisti

Senior Manager

Giulia Faustini

PwC TLS Avvocati e Commercialisti