A proposed Czech tax on exceptional refinery margins has prompted a dispute over who would ultimately bear its cost, as lawmakers gather on 13 November for the bill’s second reading.
The government proposes a 50% levy on increased margins relative to 2025, applying to tax periods beginning in 2026 and 2027. The Finance Ministry estimates that the measure could generate approximately CZK 5.5 billion for 2026, while the following year’s revenue would depend on market conditions.
The proposal targets companies with annual revenue of at least CZK 2 billion and refinery revenue of at least CZK 50 million. In practice, reporting identifies Orlen Unipetrol’s refineries in Litvínov and Kralupy nad Vltavou as the operations expected to be affected.
The government argues that exceptional market conditions have increased refining margins and justify an additional contribution to public finances. The measure remains proposed legislation, rather than a tax whose final terms have been enacted. EY – Česká republika
Opposition Civic Democratic Party leader Martin Kupka said on 13 November that sector-specific taxation would undermine investment predictability and could ultimately raise consumer prices. He also criticised the difference in treatment between domestic refining and imported fuel.
The Pirate Party’s position is more qualified. MP Vendula Svobodová said the party does not reject taxing exceptional profits during a crisis, but opposes the proposed design. It wants a lower rate of 25%, a broader scope including coal-fired electricity producers, and revenue directed towards payments supporting electricity-system capacity. ČeskéNoviny.cz
Other parties have proposed different amendments. STAN wants foreign producers exporting to Czechia brought within the measure’s scope. TOP 09 proposes reducing the rate to 39.5% and changing its treatment under ordinary corporate income tax to protect municipal and regional revenues.
These proposals highlight disagreements over the tax’s design as well as its principle. Lawmakers must determine which activities should be covered, how exceptional margins should be measured and how the new obligation interacts with existing taxes. Česká televize
The debate also has a cross-border dimension because the affected Czech refineries belong to Poland’s Orlen group. Decisions in Prague therefore concern an industrial network operating across national markets.
Claims about higher pump prices or reduced investment remain forecasts and political arguments. Their eventual validity would depend on the enacted rules and companies’ responses. The immediate parliamentary question is whether amendments can address concerns about competition while preserving the revenue sought by the government.
