Portugal's government has approved a one-off 33% windfall tax aimed at extraordinary profits recorded by oil and refining companies in 2026, the finance ministry announced. The move targets gains that the ministry attributes to elevated energy prices stemming from the Iran war.
Under the structure laid out by the finance ministry, the levy will apply only to the portion of a firm's 2026 profits that exceed the companies' average profits for 2024 and 2025 by more than 20%. The ministry said this targets profits that arise from external market conditions rather than from commercial decisions by the companies themselves.
In its statement, the ministry highlighted sharply rising costs for households and businesses as fossil fuel prices climbed. It framed the tax as a solidarity mechanism designed to help finance measures that offset the impact of higher fuel prices on consumers and vulnerable businesses. The ministry also said proceeds will support investments intended to reduce dependence on fossil fuels and to contribute to a more sustainable and resilient economy.
The tax echoes a comparable levy Portugal introduced during the 2022 energy crisis following Russia's invasion of Ukraine. Like that earlier measure, the newly approved charge is intended to capture abnormal gains linked to sudden shifts in global energy markets.
The levy is set to cover all oil companies operating in Portugal, explicitly including Galp Energia. The company reported a 45% rise in second-quarter adjusted net profit to 2540 million on Monday, a result the finance ministry tied to higher crude prices and stronger refining margins following the Iran war. After releasing its results, Galp increased its 2026 dividend by 10%.
The government will submit the measure to parliament for final approval. According to the finance ministry, the levy is expected to receive support from all opposition parties in the legislature.
For policymakers, the levy is framed as a targeted tool that draws on exceptional, market-driven gains to fund relief and longer-term investments. For affected firms, it applies a defined calculation - comparing 2026 results to a 2024-2025 baseline and taxing only the excess above a 20% threshold - that confines the charge to what the ministry regards as extraordinary profits.