The tax on energy companies is the new great fiscal battle that will confront partners on the left and right of the coalition government. The Executive’s commitment to convert the temporary tax that was designed in 2022 into a permanent tax has been left out of the “package” of measures approved this week in Congress due to the rejection of PNV and Junts, which have aligned themselves with the interests of companies in the sector, mainly with Repsol. But that doesn’t mean it’s been ruled out.
EH Bildu, ERC, Podemos and BNG made it a red line in the negotiations and have obtained a commitment from the Ministry of Finance to extend it through a bill or a royal decree before the end of the year, when its validity expires. The key now becomes its new design, which must include bonuses for companies that invest in the ecological transition to convince PNV and Junts and which must not be so weak as to scare away the left bloc.
As elDiario.es has learned, the proposal from ERC and EH Bildu (the 37th amendment that Congress rejected on Thursday), which provides for a deduction for strategic investments that are included in an Investment Plan approved by the Ministry for the Ecological Transition, will be the starting point of these trainings. Meanwhile, PNV sources announced on Thursday that the nationalist party “will see when the negotiating commission, which PSOE and Podemos have agreed upon, starts, what position it sets based on the tax proposal that is made and the subsequent negotiation.”
The tribute was designed in 2022 to tax the extraordinary profits achieved by companies in the energy sector due to their ability to take advantage of the inflation crisis to raise the margins of their businesses. “Both credit institutions and energy companies accumulate record profits, so a greater tax contribution is coherent, resulting in better public services for the social majority of the country,” the Treasury defended at the end of September 2024, when published the tax collection data for large electricity and oil companies, which was 1,164 million on their 2023 profits, a figure similar to that of the previous year.
“These taxes follow the recommendations of international organizations that request a greater contribution from those sectors with great benefits,” stated the department led by Vice President María Jesús Montero in September. The coalition government’s commitment is, indeed, to extend it, as it has done with the banking tax and as its partners on the left demand. “A permanent tax is motivated mainly by positions of monopolistic power, in strategic sectors where the power of large oligopolies structurally detracts from citizens’ income and compromises the well-being of the majority,” he explains. the Platform for Tax Justicewhich includes unions, consumer associations, environmentalists and other organizations that fight against inequality.
“We are concerned about the lack of specificity and clarity around the tax on energy companies. At a time when the sector continues at historical record levels of results and with such significant market power, it would be a setback if it remained a cosmetic design without substantial impact,” warns Oxfam Intermón, one of the most active organizations in the fight for tax justice.
The four largest listed energy companies in Spain (Iberdrola, Endesa, Naturgy and Repsol) achieved a joint profit of 10,247 million euros in the first nine months of 2024, exceeding the record profits of 9,037 million that they achieved until September 2022. That year, Natural gas prices shattered all highs after the energy crisis that followed the Russian invasion of Ukraine in February 2022. Cepsa, which is not listed on the stock exchange, adds almost 500 million net profit in the same period of 2024.
The negotiations of the fiscal “package”
This Thursday, the Government achieved the support of its partners to approve in the Congress of Deputies the fiscal package prior to the General State Budgets (PGE) of 2025. The negotiation on the left and right was agonizing, at times bizarre, but the ground of 15% on the corporate tax of multinationals, the increase in personal income tax on the capital income of the richest and the new tax on banks, among other measures, gathered 177 votes in favor. favor of the deputies PSOE, Sumar, PNV, Junts, EH Bildu, ERC, Podemos and BNG, in the face of the rejection of PP, Vox and UPN, and the non-appearance of José Luis Ábalos.
This “reform” that “has remained a package”—according to Carlos Martín Urriza, spokesperson for the Economy and Treasury of Sumar, in the Congressional forum—has lost many initial proposals along the way, since the increase in diesel taxation. to equal it to gasoline until the elimination of the tax privileges of SOCIMIs, although the key that has blocked and unblocked the negotiations has really been the temporary tax on energy companies.
For weeks, the Ministry of Finance and the PSOE have been giving prominence to each of their partners, always with the tax on energy companies as the central axis of the discussions. At the end of October, after a campaign led by the PNV-Junts-Repsol trinomial against the coalition Government’s commitment to extend this tax, the PSOE delivered its fiscal package measures in Congress without including it and the independence party boasted in a press release of having eliminated it “to guarantee the investment of energy companies in Catalonia and avoid the recentralization of powers, thus supporting the industrial fabric of the country. The increase in prices of electricity, natural gas, diesel and gasoline bills for citizens is also avoided.”
With the exception of Sumar, who assumed his role as government partner and followed the position of the PSOE, this movement unnerved the nerves in the bloc of left-wing partners. In different words, the message from ERC, EH Bildu, BNG or Podemos was the same: without a tax on energy companies, there would be no support for any other fiscal measure. On Monday, in the Finance Commission prior to the final vote in the Plenary Session of Congress, ERC, EH Bildu and BNG, close to midnight after hours of negotiation, reached an agreement with the Ministry of Finance for “the presentation of a royal decree.” law to extend the tax on energy companies throughout the year 2025.”
Immediately afterwards, at exactly 0:55 a.m. on Tuesday, the Treasury issued a concise three-line statement: “The Government wants to clarify that it maintains its agreement with Junts to not tax energy companies that maintain their effective investment commitment for decarbonization.” . The “clarification” refers to the pact at the end of October that was disseminated by the independence party, although it modifies it as it goes along, because that agreement spoke of “elimination” of the tribute, at no time about the possibility that it existed, leaving exempt the investments that promote the ecological transition. A position, by the way, that the PNV had contemplated on other occasions.
Podemos, which does not have representation in said Commission, played its role on the same day of the Plenary Session of Congress, on Thursday, and accelerated the hours of negotiation until, once the debate on the fiscal package had begun, it announced the commitment of the PSOE to promote a proposal of law that contains a tax on energy companies and to open a negotiating commission with the investiture bloc to move it forward. The agreement announced by the purple formation adds that if a consensus does not emerge before December 31, the Government will have to approve a royal decree with the extension throughout the year, in the same line as what ERC, EH Bildu had previously agreed. and BNG with the Treasury.
The current design of the tax
Until now (2022, 2023 and 2024), the tax on energy companies has affected the main operators, “in accordance with the regulations governing markets and competition, as well as the people or entities that carry out energy production activities in Spain. crude oil or natural gas, coal mining or oil refining and that generate, in the year prior to the birth of the obligation to pay the benefit, at least 75% of their turnover from economic activities in the field of extraction, mining, oil refining or the manufacture of coke products,” according to the Treasury.
However, those main operators whose net amount of turnover corresponding to the year 2019 is less than 1,000 million euros and those whose net amount of income corresponding, respectively, to the years 2017, 2018 and 2019 derived of the activity that would have determined its consideration as the main operator of an energy sector does not exceed 50% of the total of said amount each respective year. The tax base is the net amount of the annual turnover, to which a percentage of 1.2% is applied.
In the extension of this temporary tax of 2023the Government added to this design, after agreeing with the PNV“the establishment in the General State Budget Law for the year 2024 of an incentive that will be applicable to those obliged to pay in the energy sector for strategic investments that are essential for the ecological transition in our country, such as energy storage, new renewable fuels – such as biogas, biomethane or green hydrogen – and their possible associated network infrastructures, as well as investments associated with the national and European value chain, to contribute to strategic autonomy, which they carry out from the January 1, 2024 in relation to the magnitudes to be considered with respect to the aforementioned year.” This condition did not prosper because there was never a 2024 Budget.
30,000 million investment in the sector in three years
The starting point in the negotiation between the Government’s partners for the extension of the energy tax is the negotiation on bonuses for investments in decarbonization and the ecological transition. This same week, the Spanish Energy Club, which brings together BP, EDP, Endesa, Iberdrola, Moeve (Cepsa), Naturgy, Repsol and TotalEnergies, published a statement in which it warned that “new tax burdens will condition the future of investments in the energy sector.
According to this lobby, “extending or including new tax burdens on companies in the energy sector will make it difficult to materialize the investments that need to be made, estimated at more than 30 billion euros for the next three years, as well as the development and economic and financial viability of the projects.
Its main argument is that “the energy transition is Spain’s great opportunity to lead a new, more sustainable growth model, and to reindustrialize and create jobs by taking advantage of the full potential of renewable energies, in which our country has a comparative advantage over to other countries around us (due to their geographical position, abundance of natural resources, talent, energy infrastructure, etc.).”
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