Government Sets Windfall Tax at 60 Percent Starting August 1

Starting August 1, 2026, the Polish government will implement a 60 percent windfall tax on fuel sector profits to fund measures aimed at keeping retail fuel prices stable for consumers.

The Scope and Mechanism of the Windfall Tax

The government has finalized a temporary windfall tax targeting companies involved in the production, import, and intra-community acquisition of liquid fuels. Following public consultations, the initial tax rate was reduced from 75 percent to 60 percent, though the core structure of the legislation remains unchanged.

The Ministry of Finance estimates that between 20 and 30 entities will be subject to the levy. The largest national fuel company is expected to account for 60 percent of the tax base, with the remaining 40 percent distributed among other market participants.

Retroactive Tax Liability Concerns

Although the legislation enters into force on August 1, 2026, it applies to extraordinary profits earned between March 1 and December 31, 2026. This retroactive application has sparked significant debate among economists and legal experts regarding the predictability and stability of the tax system.

Calculation and Revenue Allocation

The tax is not levied on total income but only on surplus profits exceeding a reference margin, calculated based on financial results from the period preceding March 1, 2026, plus a 20 percent allowance. This targeted approach ensures that the levy impacts only those firms seeing significant profit spikes.

The government expects to generate approximately 4 billion PLN from this tax. These funds are earmarked for the “Lower Fuel Prices” package, which aims to maintain tax breaks and cap retail prices for selected fuels to assist drivers and public transportation operators.

Market Impact and Consumer Outlook

While the regulation does not directly tax individual motorists, economists warn that companies may attempt to shift tax costs onto consumers. The government maintains that the revenue will be used to subsidize fuel costs, though the final impact on prices will ultimately depend on global oil markets, currency fluctuations, and geopolitical developments.