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Spain’s Windfall Levy Proposal Opens Door to Legal Fight

Aug. 15, 2022, 6:05 AM

Spain’s proposal for a temporary windfall levy on banks and utilities is poised to trigger legal challenges if it becomes law, business leaders and tax practitioners said.

Parties of the ruling coalition introduced a bill July 28 to tax large banks and energy companies to help raise €7 billion ($7.2 billion) to tackle the cost-of-living crisis. The bill also contains provisions to prevent companies passing the cost on to consumers.

The UK and Italy have already announced energy windfall taxes, but the structure of Spain’s tax is unusual, with the government at pains to avoid calling it a ...