Already registered for PSOE and United We Can Congress two new taxation proposals targeted at major energy providers and banking institutions. Specifically, the plans introduce a 1.2% levy on energy sales with a turnover exceeding 1,000 million euros and a 4.8% charge on the net interest and fees collected by banks. The governing parties aim to raise about 7,000 million euros over the next two years.
Following Pedro Sánchez’s remarks during the state of the nation debate, PSOE and United We Can have put forward draft measures aimed at two sectors that have seen substantial gains in recent years. Predictably, both groups seek to introduce two new taxes, with a bill set to be debated in Congress in September and expected to receive approval before year’s end. The measures are described as extraordinary and temporary for the years 2023 and 2024. The expectation is to net 2,000 million euros from energy companies and 1,500 million euros from banks each year.
Government members will meet this Friday with around 20 affected companies to discuss the specifics of the proposal.
Performance
The regulation targets major electricity, gas, and oil firms with a tax applying at 1.2% of net turnover, defined as sales of goods and services, provided the turnover surpasses 1,000 million euros. Entities involved in energy logistics and that constitute less than 50% of total bills will be excluded. For banks, the tax affects institutions where the sum of customer interest and commissions exceeds 800 million euros, with a 4.8% rate applied to the combined net interest and net commissions.
Both taxes, if approved before year-end, would take effect from January 1, 2023, with a prospective alignment to 2024 numbers. While a 50% upfront payment is anticipated in February, the remainder would be due on September 1 of each year.
Protection for the citizen
One of the most contentious points between the socialists and their allies has been the inclusion of guardrails to prevent charging customers more to cover tax costs. The proposed rule states that large energy firms and banking institutions may not pass tax expenses onto service prices. For banks, the National Markets and Competition Commission (CNMC) would supervise these protections in collaboration with the Bank of Spain. Importantly, the bill does not specify a mechanism to verify that service prices do not rise as a result of the tax.
If increases are observed that offset the tax impact, the rule imposes a penalty equal to 150% of the amount transferred to customers. Parliamentary sources from United We Can indicate a push to go further, proposing the creation of a new financial crime framework modeled on the Turkish Penal Code, which could carry a prison sentence of up to 10 years for such practices in strategic sectors like energy and banking. The Socialists resisted extending the Penal Code, noting that it would require the enactment of an organic law and broader legislative support in Congress.