Investment planned for Spain ‘no longer competitive’
Taxation in Spain, as a result of the new highly controversial coalition government, is prompting energy company Repsol to consider moving a planned €1.5 billion investment in hydrogen – and Portugal could reap the benefits.
Repsol’s chairman Antonio Brufau said yesterday that unless Spain pledges not to tax the production of hydrogen, “our decision will be certainly to go to Portugal or France”, where such a tax does not exist.
Right now, Spain has an extraordinary tax to penalise what it considers to be extraordinary profits made by energy companies and banks linked to high inflation.
In the case of energy companies (oil, electricity and gas), the tax will be 1.2% of turnover in 2022 and 2023, writes Lusa.
The tax is applied to companies whose main activity is energy and which had a turnover of more than one billion euros in 2019, excluding sales outside of Spain.
The Spanish government has said that the revenue will be used to finance measures it has adopted since the start of the war in Ukraine to try to reduce the effects of inflation on the economy and household incomes.
Last month, when the new government took office, part of the agreement involved “a fair tax reform that makes banks and large energy companies contribute to public spending“. And this is what is spooking companies like Repsol.
“If we have a tax to produce hydrogen that doesn’t exist in France or Portugal, our decision will certainly be to go to Portugal or France,” Brufau told journalists in Madrid.
It is a question of “investments that, unless they are made within a framework of stability and with an attractive fiscal framework” will not go ahead.
Says Lusa, Brufau believes it is “incomprehensible that Spain, unlike other countries, wants to maintain an extraordinary and transitional tax for energy companies based on “hypothetical” extraordinary profits.
“The costs to which the government subjects its companies put them at a clear competitive disadvantage,” he said.
Source material: LUSA