Cepsa to challenge Spanish windfall tax in courts if approved as proposed
MADRID, Nov 11 (Reuters) - Oil and gas group Cepsa will challenge Spain's planned windfall tax on energy companies in court if the legislation is approved as currently proposed, CEO Maarten Wetselaar said on Friday.
The Spanish parliament is currently debating a bill introduced by the leftist ruling coalition to establish a temporary levy on banks and large energy companies, aiming to raise 7 billion euros ($7.19 billion) in 2023 and 2024 which would be used to ease cost-of-living pressures.
Cepsa is owned by United Emirates' sovereign fund Mubadala and the Carlyle Group (CG.O). Wetselaar is not the first business leader to criticize the planned tax. Iberdrola's (IBE.MC) executive chairman Jose Ignacio Sanchez Galan has also threatened to take the government to court over the tax as has Italian utility Enel (ENEI.MI), which owns Endesa (ELE.MC) in Spain.
Wetselaar said the tax as currently designed would impact Cepsa's investment plan at a time when Spain and Europe need more spending on energy to fight climate change and ensure security of supply.
"This tax is disproportionate and poorly designed because it taxes revenues and not profits, and the two-year span in an environment of high volatility creates tremendous uncertainty," he said.
On Thursday, Spain's ruling coalition submitted amendments to its tax proposal for banks but made no changes to the planned levy on big energy companies.
Cepsa said that adopting the European tax model, a levy on profit increases, was the best way to protect the competitiveness of Spanish companies.
The levy on energy companies in Spain includes a 1.2% tax on power utilities' sales, while the European Commission introduced a temporary tax on windfall profits at oil, gas, coal and refining companies, that would apply to 33% of these firms' taxable surplus profits from 2022.
($1 = 0.9733 euros)
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