The Solidarity Contribution provided by the EU Regulation

Prepared by Energy Team

On 7 October 2022, the Council Regulation (EU) 2022/1854 on “an emergency intervention to address high energy prices” (the “Regulation”) was published in the Official Journal of the European Union. The adoption of the Regulation follows the extraordinary Energy Council of 30 September 2022 and the Parliament Resolution 2022/2830 (RSP) “on the EU’s response to the increase in energy prices in Europe” published on 5 October 2022.

The Regulation provides for three different measures:

  • a reduction of the gross electricity consumption by 10% for each Member State;
  • a temporary cap (Eur 180 per megawatt hours) on market revenues obtained from the generation of electricity from certain sources (such as renewables, nuclear, lignite and crude oil);
  • a temporary solidarity contribution on the excess profits generated from activities in the crude petroleum, natural gas, coal and refinery sectors.

The main features of the temporary solidarity contribution provided for in the Regulation (“Solidarity Contribution”) are briefly commented below.

Scope of the application

The Solidarity Contribution applies to Union companies and permanent establishments – including those that are part of a consolidated group for tax purposes – with activities in the oil, gas, coal and refinery sector (Regulation No. 2006/1893) unless Member States have enacted equivalent national measures. The contribution is a “temporary levy” as it applies only to 2022 and 2023 profits.

The Regulation provides that Member States shall adopt and publish measures implementing the Solidarity Contribution by 31 December 2022.

Computation of the solidarity contribution

The base is calculated on the taxable profits realized in the fiscal year 2022 (and /or 2023) which are above a 20% increase of the average taxable profits realized in the four fiscal years starting on 1 January 2018 (or after). Taxable profits are determined according to the domestic tax rules.

If the average taxable profits realized in those four fiscal years is negative, the average taxable profits is assumed equal to zero for the purpose of calculating the Solidarity Contribution. The rate applicable to the base of the contribution is 33%.

Coordination with national measures

Member States should apply the Solidarity Contribution unless they have enacted equivalent national measures (Regulation preamble, no. 63). A national measure is deemed “equivalent” to the extent that it shares similar objectives, is subject to similar rules and generates comparable or higher proceeds than those deriving from the Solidarity Contribution (art. 14 of the Regulation). It is worth pointing out that article 37 of the Italian Law Decree No. 21/2022 introduced an extraordinary contribution on enterprises resident in Italy operating in the oil&gas and energy sectors (please refer to the newsalert: ttps://

Preliminary comments

It is crucial to understand whether the Italian legislator will adapt the Italian extraordinary contribution approved in March 2022 to the Solidarity Contribution, being undoubted that the aims pursued by the two measures are similar. In particular, the Regulation might represent a chance to remove the most critical aspects of the Italian extraordinary contribution and, in particular, the issues concerning its compatibility to the Italian constitutional principles  (please refer to the past newsalert). Indeed, at first glance, the Solidarity Contribution seems to be more coherent to the principles elaborated in the past by the Italian Constitutional Court. First, if it were confirmed that the relevant qualifying profits would be those assumed for income tax purposes, it would be possible to remove one of the main issues of the domestic contribution. Also, the time period to be used as a comparison makes reference to the previous 4 years (instead of the 7-months period provided by the Italian law provision). With specific reference to the surplus profit, the 20% increase imposes a higher threshold compared to the domestic contribution (i.e., 10% and in any case exceeding Euro 5 million). On the other hand, the Solidary Contribution rate is much higher than the one provided by the Italian law rule (33% against 25%). Furthermore, the Regulation does not provide for a specific rule governing the deductibility of the Solidarity Contribution for income tax purposes.

Let’s Talk

For a deeper discussion, please contact:

Franco Boga

PwC TLS Avvocati e Commercialisti


Giuseppe Fortunato

PwC TLS Avvocati e Commercialisti

Senior Manager