WINDFALL PROFIT TAXATION AND THE REDISTRIBUTIVE

Transcript:WINDFALL PROFIT TAXATION AND THE REDISTRIBUTIVE:
WINDFALL PROFIT TAXATION AND THE REDISTRIBUTIVE ISSUE: PAST, PRESENT AND FUTURE Comparing Windfall Profit Tax with Robin Hood Tax Eleonora Addarii and Valentina Passadore Made to Last? Windfall Profit Taxation in Europe (and Beyond) University of Ferrara - 9 March 2023 Summary of the Presentation The actual economic situation brought back into the focus of tax policy the introduction of windfall profit taxation measures Recently, Italy set 2 different extraordinary contributions which aim to contain the effects of the increase in prices in energy and oil for businesses and consumers Back in 2008, Italy had a similar provision (the Robin Hood tax), declared unconstitutional by the judg. 10/2015 that declines the main criteria to evaluate windfall profit taxation according to Italian Constitution The comparison between the old Robin tax and the new contributions shows that despite the differences and the caution used by the lawmaker, defining a windfall profit tax really effective and constitutionally legitimate is still an unresolved issue 1 Windfall profit taxation? Purposes and issues The aim: generate revenue to finance extraordinary and emergency expenses, prevent the accumulation of extraordinary profits for a few beneficiaries, prevent speculative behaviours and reduce the pressure that the increase in energy costs has on citizens and businesses The issues: selective and potentially discriminatory measures contrast with the rules on competition and state aids Particular attention needed in the formulation of the rules and the structuring of the tax (taxable persons and tax base) in order to achieve the solidarity and redistributive purposes that justify the different taxation 2 Windfall profit taxation in Italy art. 37 D.l. n. 21/2022 Tax rate: 25% (at first, 10%) Tax Base: increase between the balance of active and passive VAT operations in the periods October/April 2020 and October/April 2021 IF over 5mil euros in any case higher than 10% Taxpayers: all subjects operating in the field of production, resale, distribution and marketing of energy, gas and oil products or if at least the 75% of the revenues derives from such activities (refer to VAT law) Non-deductible 3 Windfall profit taxation in Italy art. 1 co. 115-119 L. n. 197/2022 Tax rate: 50% (the amount due should not exceed 25% of the company’s equity/net assets in 2021) Tax Base: share of global income 2022 which exceeds at least for the 10% the average income of the 4 previous tax periods (2018-2021) Taxpayers: all subjects operating in the field