Poland Imposes Windfall Tax on Fuel Companies to Recover War Costs

Poland's government has approved a special windfall tax targeting fuel companies that saw significant profits during the U.S.-Iran-Israel conflict. The measure aims to recoup some of the billions spent by the state in protecting consumers from soaring fuel prices. The proposed levy will impose a 60% tax on excess profits generated between March and December 2026, when the closure of the Strait of Hormuz disrupted global oil supplies. Poland's Finance Ministry estimates this move could generate around 4 billion zloty ($1.1 billion) in revenue.

Excess profits are defined as sales margins that exceed a company’s average 2025 margin by more than 20%, reflecting gains from the geopolitical crisis rather than improved business performance. The state-controlled energy giant Orlen is expected to be hit hardest, potentially contributing about 60% of the projected tax base.

This proposal comes after months of emergency measures introduced by Warsaw to shield households and businesses from rising fuel costs. These included temporary reductions in VAT and excise duties on fuels, as well as price controls designed to ensure consumers benefited from the tax cuts. The government estimates that these measures cost Poland around $435 million a month.

While the proposal has been approved by the ruling coalition, it still faces political challenges. President Karol Nawrocki, an opposition ally who has previously blocked similar fiscal initiatives, must sign off on the legislation for it to become law. Initially proposed at 75%, the tax rate was reduced to 60% following consultations with industry groups that warned of potential negative impacts on certain companies if the higher rate were implemented.