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EU windfall tax would cost TotalEnergies more than 1 billion euros – CEO
Published by Jessica Weisman-Pitts
Posted on September 21, 2022
3 min readLast updated: February 4, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on September 21, 2022
3 min readLast updated: February 4, 2026
By Benjamin Mallet and Silvia Aloisi
PARIS (Reuters) -TotalEnergies is likely to face more than 1 billion euros in additional levies if a European Union scheme to impose extra taxes on oil and gas companies is approved, the French energy company’s CEO said on Wednesday.
A debate is raging in European countries over whether oil companies making record profits because of the energy crisis should pay additional taxes to help consumers cope with soaring inflation.
Patrick Pouyanne, being grilled by French lawmakers, said TotalEnergies was waiting to see how the EU debate evolved before deciding whether to lower prices further at French petrol stations next year.
He said that the EU was the appropriate forum for such a discussion – as opposed to country-by-country measures – but warned a European levy could lead to oil companies investing elsewhere.
The EU proposal – known as the solidarity contribution scheme – would tax fossil fuel companies on extra profits generated in European countries thanks to the surge in oil and gas prices in the wake of Russia’s invasion of Ukraine.
The proposal defines those profits as anything above 20% of a company’s average pre-tax profit over the last three fiscal years.
Pouyanne took issue with that definition, saying it should be changed to allow businesses to recoup some of the losses they made in previous years – such as Total’s refinery operations.
“I must confess I am a little surprised by the definition of extra profits in the European text,” he told the lawmakers, adding he had voiced his reservations with French Finance Minister Bruno Le Maire.
In July, TotalEnergies cut fuel prices at French petrol stations until the end of the year as the government pressures companies to do more to help households cope with the rising cost of living.
Pouyanne said the group expected to pay about $30 billion in taxes worldwide this year, nearly double the $16 billion it paid in 2021 and a five-fold increase from the $6 billion paid in 2020.
The group, whose second-quarter adjusted net income nearly trebled to $9.8 billion from a year earlier as it benefited from the rise in energy prices, has been criticised by some activists in France for holding on to many of its Russian assets.
It has also come under scrutiny over the tax it pays in France. Environment media outlet Basta reported in July that the group had paid no taxes on profits for its French companies in 2019 and 2020, citing the group’s own reports.
Pouyanne told the hearing he expected TotalEnergies would pay taxes on profits earned in France this year. He also said it would pay about 8 billion euros in dividends in 2022, in line with last year.
TotalEnergies, which is currently also rewarding shareholders with a $2 billion share buyback, has never cut its dividends in 30 years, not even during the COVID-19 crisis, Pouyanne said.
(additional reporting by Geert De Clercq; writing by Silvia Aloisi; editing by Richard Lough and Jane Merriman)
Extra profits refer to earnings that exceed a specified threshold, often defined as a percentage above a company's average profits over a set period, used to determine tax liabilities.
The solidarity contribution scheme is a proposed EU tax initiative aimed at levying additional taxes on oil and gas companies that have made significant profits during crises, such as the energy crisis.
Corporate tax is a tax imposed on the income or profit of corporations, typically calculated as a percentage of the company's taxable income.
Dividends are payments made by a corporation to its shareholders, usually derived from profits, and can be issued in cash or additional stock.
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