Advocate General Athanasios Rantos at the Court of Justice considers the temporary solidarity contribution on the excess profits of energy companies to be compatible with EU law (Court of Justice of the European Union (CJEU), Opinion of 22 October 2026 – C-358/24, C-533/24, C-153/25). The measure was introduced in response to the energy crisis triggered by the war in Ukraine. The Court’s judgment is still pending; the Opinion is not binding on it.
Temporary Contribution on Excess Profits
In 2022, the Council of the European Union responded to the significant increase in energy prices by adopting Regulation (EU) 2022/1854 on an emergency intervention to address high energy prices. It provides for a temporary solidarity contribution for 2022 and 2023 on the excess profits of certain companies in the crude petroleum, natural gas, coal and refinery sectors.
It applies to profits exceeding the average taxable profits of the four preceding fiscal years by more than 20 percent. The contribution rate of 33 percent laid down in Article 16 of the Regulation is a minimum rate. Member States may apply a higher rate, with the contribution applying only to surplus profits resulting from external circumstances.
Instead of the rules under EU law, Member States were permitted to enact equivalent national measures, provided that these generated comparable proceeds. The funds were intended to mitigate the effects of the energy crisis on households, businesses and the economy as a whole.
Proceedings Before the Court of Justice
The Italian and Belgian Constitutional Courts and the Irish High Court asked the Court of Justice to clarify the validity and scope of the Regulation. On this basis, the national courts intend to assess whether the respective domestic rules being challenged are compatible with EU law.
The hearings in the three cases took place before the Grand Chamber of the Court of Justice on 9 June 2026.
Questions from Italy
The Italian Constitutional Court is considering, in particular, whether the solidarity contribution may be extended to economic operators not expressly listed in the Regulation. These include companies that market or distribute energy. Some of these companies were already subject to a cap on their revenues in 2022.
In the Italian main proceedings, the electricity producer Acea Produzione SpA is challenging, among other things, Circular No. 4/E of the Italian tax administration dated 23 February 2023. The proceedings concern the extension of the personal scope of application by Article 1(115) of Law No. 197/2022.
Questions from Belgium
The Belgian Constitutional Court first seeks clarification as to whether Article 122(1) TFEU (Treaty on the Functioning of the European Union) provides a valid legal basis for the Regulation. The proceedings also concern the power of Member States to modify or expand the group of companies liable to pay the contribution.
Further questions concern the compatibility of the European and national rules with:
- the prohibition of customs duties and charges having equivalent effect,
- the prohibition of discriminatory internal taxation,
- the provisions of EU law on State aid.
The contested Belgian measure is based on the Law of 16 December 2022. For the petroleum sector, it provides for a contribution rate of 75 percent on profits exceeding 120 percent of the relevant average profit.
Questions from Ireland
The Irish request for a preliminary ruling was received by the Court of Justice on 1 August 2024. The applicants in the main proceedings are Vermilion Energy Ireland Ltd, Vermilion Exploration and Production Ireland Ltd and Vermilion Energy Corrib Ireland Ltd. The respondents are the Irish Minister for the Environment, Climate and Communications, Ireland and the Attorney General.
In addition to the parties to the main proceedings, the Belgian and Italian governments, the Council of the European Union and the European Commission submitted written observations.
The High Court likewise asks about the legal basis of the Regulation and its compatibility with the principle of proportionality. It also seeks clarification as to whether the Regulation and the Irish implementing measures comply with the principles of legal certainty and non-retroactivity, as well as the right to property and the freedom to conduct a business.
Article 122(1) TFEU as the Legal Basis
Urgent and Temporary Economic Measure
In the Advocate General’s view, the Regulation could be based on Article 122(1) TFEU. The provisions governing the solidarity contribution met the requirements of that provision.
The contribution should be classified as an urgent, temporary and proportionate economic measure. Coordinated action by the Member States was intended to limit the impact of the energy crisis on businesses and consumers in accordance with the principle of solidarity under EU law.
No Unanimity Required in the Council
According to the Opinion, the solidarity contribution does not fall within the scope of tax harmonisation. Unanimity in the Council was therefore not required for its adoption.
By contrast, such unanimity would be required within the scope of Article 115 TFEU. That provision provides the legal basis for the approximation of direct taxation.
Limits on National Derogations
Categories of Persons Liable to Pay Generally Prescribed
According to the Advocate General, Member States have a degree of discretion when designing equivalent national measures. As a general rule, however, they may not alter the categories of persons liable to pay the contribution as defined by the Regulation.
This restriction does not prevent a Member State from extending the contribution to additional legal entities in the exercise of its taxing powers. This may apply, in particular, to companies that generated excess profits due to the particular characteristics of the relevant national energy market.
The condition is that the overall burden and the objectives of the domestic measures correspond to those of the rules under EU law. A restriction of the personal scope of application may also be permissible if the legal entities concerned do not operate within the national economic system.
Pre-existing Revenue Caps
In the Advocate General’s view, the fact that a mechanism capping the revenues of certain legal entities was already in place does not, in principle, preclude the additional application of the temporary solidarity contribution.
The contribution rate of 33 percent under EU law merely constitutes the lower limit. A higher national rate is permissible, provided that the other requirements of the Regulation and EU law are met.
Legal Certainty and the Prohibition of Retroactivity
No Application to Fully Concluded Situations
The Advocate General does not consider the contribution introduced for the 2022 tax year to have impermissible retroactive effect. The exceptional nature and limited duration of the measure are particularly relevant in this regard.
The contribution does not apply to situations that have already been fully concluded. Nor does it permanently restructure the tax system applicable to energy companies. In his view, there is therefore no breach of the principles of legal certainty and the protection of legitimate expectations.
With regard to the national provisions adopted in 2023, their focus on excess revenues precludes a breach of the protection of legitimate expectations. According to the Opinion, this also ensures the lawfulness of retroactive rules.
Right to Property and Freedom to Conduct a Business
In the Advocate General’s view, Articles 16 and 17 of the Charter of Fundamental Rights of the European Union likewise do not preclude the solidarity contribution. The associated restrictions on the freedom to conduct a business and the right to property are lawful.
They are based on a sufficiently precise legal basis, pursue objectives in the public interest and are compatible with the principle of proportionality. They are also limited in time and apply exclusively to companies’ excess revenues.
With regard to the national measures, the contribution rate applied to excess profits does not appear, in itself, to be confiscatory. Nor does the prohibition on using tax losses from previous years to reduce the temporary solidarity contribution affect its lawfulness. The losses concerned may continue to be taken into account under the ordinary tax regime.
No Charge Having Equivalent Effect to a Customs Duty
According to the Opinion, the temporary solidarity contribution does not fall under the prohibition of customs duties and charges having equivalent effect laid down in Article 30 TFEU. That prohibition applies to charges imposed on goods because they cross a border.
By contrast, the solidarity contribution is not linked to the crossing of a border. It applies uniformly to goods of domestic and foreign origin.
In the Advocate General’s view, a distinction under national law between different petroleum products resulting in different contribution liabilities likewise does not breach the prohibition of discriminatory internal taxation under Article 110 TFEU. This is subject to the distinction being based on objective criteria.
No State Aid
According to the Opinion, limiting the contribution to certain economic operators does not constitute selective unequal treatment if it is based on objective criteria. In particular, the rules may apply to companies with the largest market shares.
This distinction is consistent with the objective of creating a temporary emergency mechanism during the energy crisis and covering companies with excess profits. The solidarity contribution should therefore not be classified as State aid within the meaning of Article 107(1) and Article 108(3) TFEU.
Further Proceedings Concerning the Energy Crisis Contribution
Romanian case C-731/25 concerning Regulation (EU) 2022/1854 is also pending before the Court of Justice. It concerns a national contribution rate of 60 percent and the inclusion of affiliated companies only. No final decision has yet been issued in those proceedings either.
In Germany, the Bundesfinanzhof (BFH, German Federal Fiscal Court), by order of 27 October 2025 – II B 5/25 (AdV) (interim suspension of enforcement proceedings), found that there were serious doubts as to the lawfulness of a declared EU energy crisis contribution in light of a possible breach of EU law. In the Bundesfinanzhof’s view, these doubts justified suspending enforcement.
This was preceded by an order of the Finanzgericht Köln (Cologne Fiscal Court) dated 20 December 2024 – 2 V 1597/24. The Bundeszentralamt für Steuern (BZSt, German Federal Central Tax Office) filed the permitted appeal against that order. The proceedings on the merits are pending before the Finanzgericht Köln under case reference 2 K 1595/24.
Court of Justice Not Bound by the Opinion
The role of an Advocate General is to independently submit a proposed decision to the Court of Justice. The judges subsequently deliberate on the case and deliver their judgment at a later date. The Court of Justice may follow the Opinion but is not required to do so.
In preliminary ruling proceedings, the Court of Justice answers questions concerning the interpretation of EU law or the validity of an EU act. The competent national court remains responsible for deciding the main proceedings, taking account of the decision of the EU Court. This interpretation is also binding on other national courts when they are called upon to decide comparable questions.
Tax Law Assessment by MTR Legal
The pending proceedings demonstrate that the assessment under EU law of temporary special levies depends on their legal basis, their personal scope of application and their specific implementation under national law. Companies, investors and high-net-worth individuals may contact MTR Legal Rechtsanwälte with questions concerning the tax implications of such measures. Further information is available under tax law advice.
