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ExxonMobil Sues The EU To Stop A Proposed Windfall Tax On Oil Firms

The multinational energy corporation ExxonMobil sues the EU to stop a proposed windfall tax on oil firms. Companies that have benefited from something for which they were not responsible are subject to a tax known as a windfall tax.

Daisy-Mae Schmitt
Dec 30, 202211 Shares10884 Views
The multinational energy corporation ExxonMobil sues the EU to stop a proposed windfall tax on oil firms. Companies that have benefited from something for which they were not responsible are subject to a tax known as a windfall tax.
The invasion of Ukraine by Russia has contributed to supply issues, which has resulted in significantly higher prices for oil and gas produced by energy companies. However, Exxon has stated that Brussels is acting outside of its legal authority and has referred to the policy as "counter-productive."
In October, ExxonMobil announced a quarterly profit of about $20 billion, which is equivalent to £17.3 billion. However, the business, along with other significant participants in the oil and gas industry, has claimed that a crackdown will hinder investment in the industry.
Ursula von der Leyen, the head of the European Commission, made an announcement in September regarding an emergency plan that requires big oil, gas, and coal corporations to pay a "crisis contribution" on their higher profits for the year 2022. It was declared that a tax of 33% would be applied to the profits of this year; those profits were more than 20% more than the average for the three years prior to this one.
In a complaint that was submitted to the General Court of the EU, which is located in Luxembourg, Exxon made the argument that the charge reduces the confidence of investors. According to a statement made by an Exxon representative named Casey Norton to the Reuters news agency,
Whether we invest here primarily depends on how attractive and globally competitive Europe will be.- Exxon representative, Casey Norton
During a meeting with investors earlier this month, the chief financial officer of ExxonMobil projected that the levy imposed by the EU would result in "over $2 billion" in losses for the company. The European Commission has stated that it "takes note" of the complaint that Exxon has filed.
Its spokeswoman stated in a statement that was released on Thursday that at this point, the decision about the case would be made by the General Court.
Arianna Podesta issued a statement in which she stated that,
The Commission maintains that the measures in question are fully compliant with EU law.- Exxon spokeswoman, Arianna Podesta
In the wake of Russia's invasion of Ukraine, the European Union is making significant efforts to wean itself off of Russia's energy supply, but this has forced the EU to scramble for alternate supplies.

Conclusion

Levies on non-gas electricity producers and suppliers that are making larger-than-usual profits due to the current levels of demand are anticipated to bring in a total of €140 billion (£123 billion), according to the estimations of the ministers of the EU.
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