Cabinet sees no sense in taxing excess profits of companies profiting from crisis situations

The Cabinet sees no point in structural measures that would allow extra taxation of excess profits of companies benefiting from crisis situations. The Tweede Kamer had asked in several motions to outline the possibilities, but State Secretary Marnix van Rij (Taxation) called the proposals made in the process "undesirable."

At the urging of the European Union, fossil fuel producers last year paid a one-time tax on the extra profits they made from price increases resulting from the war between Russia and Ukraine. The revenue was used to provide relief for households and small businesses.

The Tweede Kamer wanted to know from the Cabinet whether it would be possible to introduce a structural and more comprehensive solidarity tax. After all, food producers and supermarkets could also benefit from sudden price increases. The introduction of an additional tariff level in profit tax was also suggested, especially for crisis situations.

Van Rij however, cannot imagine any of these options. He argues that the tax system is already set up in such a way that companies that make more profit also pay more tax. A tax on surplus profits is also legally difficult, he says, because it is hard to determine objectively what exactly constitutes a surplus profit. In addition, the State Secretary fears implementation problems with the Tax and Customs Administration.