Poland plans to levy a 75% tax on fuel sector windfall profits generated between March and December 2026, as the government moves to recoup the cost of consumer protection measures triggered by the Middle East conflict's impact on global oil prices.
Poland is moving to impose a temporary tax on extraordinary profits earned by liquid fuel producers and traders in 2026. The proposal, announced on 19 May 2025, responds directly to the geopolitical and economic fallout from the outbreak of armed conflict in the Middle East, which disrupted global oil supply chains and sent fuel prices sharply higher.
The government argues that while it has absorbed significant budget costs to shield consumers — including cutting VAT on petrol and diesel to 8% and reducing excise duties to statutory minimums — fuel sector companies have simultaneously reaped outsized gains from the same crisis. The proposed legislation seeks to correct that imbalance.
Previously, on 13 May 2026, Poland’s Minister of Finance and Economy extended temporary reductions in VAT and excise duties on motor fuels until 31 May 2026, prolonging measures that were due to expire on 15 May and were initially introduced to mitigate fuel price volatility linked to Middle East tensions.
How the tax would work
Under the draft bill (project number UD411), the windfall tax would apply to businesses producing liquid fuels or importing them into Poland between 1 March and 31 December 2026. The taxable amount would be calculated by comparing a company’s actual 2026 fuel sales revenue against a “reference margin” — defined as the company’s average 2025 sales margin increased by 20%. Only profits exceeding this threshold would be considered extraordinary and therefore taxable.
The proposed tax rate is 75% of the excess profit base. The remaining portion stays with the taxpayer. Collection would follow a self-assessment model, with monthly advance payments and an annual tax return submission, keeping administrative burdens manageable for both businesses and authorities.
Timeline and broader justification
The government expects the bill to be adopted in the second quarter of 2026. Officials cite the constitutional principle of universality and equality of taxation as a foundation for the measure, noting that profits arising purely from geopolitical disruption — rather than investment or operational efficiency — warrant a different treatment under the tax system.
Poland also points to similar windfall tax instruments used by other EU member states during previous energy crises as precedent for the approach.
