Changes to and Extension of the Crude Oil Industry Windfall Tax

According to the amendment, the review of the special tax payable by crude oil product manufacturers is warranted by the international energy-policy situation, the persistent volatility of energy prices, and the market uncertainty resulting from European and global economic developments. In addition, the general explanatory memorandum specifically refers to the fuel shortage affecting Europe. The stated objective of the amendment is the strengthening of economic stability and the management of the budgetary risks arising from extraordinary market conditions.

What were the rules previously in force?

Under the former provisions of the Windfall Tax Act:

• the tax applied to the tax years beginning in 2025 and 2026;
• the tax base was calculated as the product of the crude oil price differential and the volume of Russian crude oil purchased during the month, expressed in barrels;
• the price differential was the difference between the monthly average quotation of Platts Crude Oil Marketwire Brent and the monthly average of the Russian purchase price, reduced by USD 5 per barrel, where this was positive; that is, the first USD 5 of the price differential was exempt;
• the tax rate was a uniform 95%;
• the tax liability had to be self-assessed, declared and paid on a monthly basis, by the 20th day of the month following the given month.

What is changing?

The above rules are amended in four respects:

• The previous flat 95% tax rate is replaced by a tiered rate structure: 50% applies to the portion of the price differential exceeding USD 2 but not exceeding USD 5 per barrel, while the portion exceeding USD 5 per barrel remains subject to 95%.
• The wording under which the price differential is “reduced by USD 5 per barrel” is deleted from the Act. As a result, the effective tax-free threshold decreases from USD 5 to USD 2.
• The tax is also extended to the tax year beginning in 2027.
• The amended rules – which enter into force on 18 August 2026, the 31st day following promulgation – must first be applied to the obligation for the month of August 2026.

What does this mean in practice?

The essence of the change is that the portion of the price differential between USD 2 and USD 5 per barrel, previously exempt in its entirety, becomes subject to a 50% tax rate, while the portion above USD 5 remains subject to the existing 95% tax rate.

To illustrate with a simple example:

• For a price differential of USD 8 per barrel, the tax liability under the former rule was 0.95 × (8 − 5) = USD 2.85 per barrel. Under the new rule, however, 50% of the portion of the price differential between USD 2 and USD 5 (USD 3), i.e. USD 1.5, together with 95% of the portion exceeding USD 5 (USD 3), i.e. USD 2.85, results in a total tax liability of USD 4.35 per barrel.
• For a price differential of USD 4, no tax was payable at all under the former rules. Under the new rules, however, 50% of the portion exceeding USD 2 (USD 2), i.e. USD 1 per barrel, becomes payable.

What should you look out for?

Affected taxpayers should review and update their monthly tax-assessment and data-reporting processes to reflect the new tiered rate structure from the August 2026 monthly tax liability onwards.

Please note that the Act enters into force on the 31st day following its promulgation, i.e. on 18 August 2026. Accordingly, pursuant to the transitional provision set out in Section 153/A of the Windfall Tax Act, the amended rules must first be applied to the monthly tax liability for August 2026.

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We hope that our newsletter assists you in reviewing the changes affecting the windfall tax in the crude oil sector.

Should any questions arise in connection with the above, our advisors will be glad to assist.