The Czech Government approved on 29 September 2026 an extraordinary windfall tax targeting the refinery sector, effective for fiscal years 2026 and 2027. The measure imposes a 50% tax on the increase in gross refining margins compared to the 2025 baseline. The tax applies to taxpayers operating refineries that meet statutory thresholds (crude oil processing capacity exceeding 1 million tonnes annually). The legislative act (Zákon o mimořádné dani z rafinérského sektoru) was fast-tracked through Parliament and signed by the President on 15 October 2026. The tax is calculated as 50% of the positive difference between the average monthly gross refining margin in the taxable period and the 2025 average margin, multiplied by processed volumes. Payments are due quarterly.
Key Takeaways
- Margin Calculation Methodology: Gross refining margin is defined as the difference between weighted average product sales prices (including petrol, diesel, jet fuel) and crude oil acquisition costs, adjusted for freight and insurance. Taxpayers must maintain detailed monthly records of crude slate, product yields, and market prices to substantiate computations.
- Interaction with Corporate Income Tax: The extraordinary tax is deductible for CIT purposes, reducing the effective combined burden. However, it is not creditable against other taxes. Companies should model cash flow impacts and consider adjusting advance CIT payments.
- Potential Legal Challenges: Industry associations have signaled possible constitutional challenges arguing discrimination and retroactivity. Affected entities should monitor litigation, prepare documentation for potential refund claims, and engage in dialogue with the Ministry of Finance on administrative guidance.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement