Brussels rules out a European tax on energy windfall profits: competence remains with member states

The European Commission announced on August 25, 2026 that taxation of energy windfall profits is a matter for member states and that Brussels is not preparing a common levy. The response came to a letter signed by six countries: Italy, Germany, Austria, Portugal, Spain and Poland.

“Taxation of windfall profits falls within the competence of member states” — European Commission spokesperson

Not new, a confirmation

The position is not new: the same line had already been expressed in April 2026 within the AccelerateEU plan against high energy costs. The politically relevant fact is that six governments deemed it necessary to ask again in writing, and that the Commission repeated it unchanged.

The EU executive specified that governments can act with national fiscal instruments within the framework of AccelerateEU measures, and that Brussels will monitor the effects of such interventions on the single market. This is the clause that really matters: competence is national, but the exercise of that competence remains subject to a compatibility check with internal market rules. In other words, countries can tax, and the Commission reserves the right to look at how.

Why six governments were requesting joint action

The structural reason behind a request for a European levy is the same one that makes a national levy difficult: energy companies operate on a continental scale, with tax bases that are mobile across jurisdictions. A levy introduced by a single state produces a tax competition effect that a harmonized levy would avoid. The Commission’s response does not address this argument on its merits: it simply places the matter within the column of national competences.

The group of six is not homogeneous in terms of energy exposure or the political orientation of the governments, which makes the letter significant in itself. But the Commission has not announced any legislative initiative, nor has it indicated a date to revisit the issue.

The Italian fallout

The Secretary of the Democratic Party Elly Schlein argued that, following Brussels’ clarification, the Italian government no longer has any reason to wait for a European decision. This is a procedural argument before a substantive one: if competence is national and the Commission has put it in writing, waiting for common action is no longer a usable justification.

The matter thus returns to individual governments, each with its own budgetary constraints and relationships with sector operators. None of the available sources indicate whether or when any of the six signatories intends to introduce national legislation.

What we don’t know

We do not know the full text of the six countries’ letter nor the date it was sent. We do not know the precise content of the Commission’s response beyond the position referenced in the daily briefing. It is not known which national fiscal instruments Brussels would consider compatible with the single market and which it would not: the clarification on monitoring is generic, and without explicit criteria it is not possible to predict the outcome of any potential review.

The next verifiable element in this story is a national act: the introduction, by one of the six signatories, of a fiscal measure on energy windfall profits with a defined tax base, rate and duration. So far, none of the six has filed one.

Sources: Associated Medias, Juorno.it, Energia Oltre.