Germany shortens electricity windfall tax duration

BERLIN: The German government plans to impose a levy to skim off electricity companies’ windfall profits from Dec. 1, 2022, scrapping a previous plan to apply the tax retroactively from September this year, the economy ministry said on Friday.

The tax is to expire by the end of April 2024, the ministry said. Berlin had originally planned to possibly extend the levy until the end of 2024.

Germany’s traditional and renewable energy lobbies criticized applying the levy retroactively as too bureaucratic and hardly feasible.

The levy, skimming off 90% of electricity companies’ windfall revenue, will partly finance a cap on energy prices that will come into force next year, economy ministry sources said.