Government approves an extraordinary tax on refineries
Taxpayers operating in the refinery sector and meeting the statutory conditions will be subject to an extraordinary tax of 50% in 2026 and 2027, levied on the increase in gross refining margins compared to 2025. However, according to information from the Ministry of Finance, only one entity is likely to meet the statutory conditions.
The extraordinary tax for the refinery sector will be governed by the Income Tax Act and will be a tax-deductible expense.
The tax is to apply in 2026 and 2027, with the tax base being the increase in the gross refining margin compared to 2025. The gross refining margin is the difference between the value of products manufactured from crude oil and sold, and the cost of the crude oil consumed.
The tax rate is to be 50% of the difference in the gross refining margin between:
- 2026 and 2025; and
- 2027 and 2025.
The taxpayer will be a legal entity engaged in crude oil processing and the manufacture of refined petroleum products that meets the following conditions:
- its total annual income is at least CZK 2 billion; and
- its annual income from refinery activities is at least CZK 50 million.
According to publicly available information, the tax is expected to affect one taxpayer in practice. However, the legislation is drafted in general terms and will apply to all entities meeting the above conditions.
Following approval by the government, the bill will proceed through the standard legislative process, including debate in the Chamber of Deputies. According to the Ministry of Finance, this does not constitute a genuine retroactivity, which is impermissible. The legislation does not retrospectively alter legal consequences that have already arisen. Events occurring during 2026 will serve as the basis for the tax liability arising after the legislation takes effect. The retrospective effect of the proposal is justified by the extraordinary and unforeseeable geopolitical situation and the legitimate public interest in mitigating its impact on consumers and public budgets, estimated at CZK 5.5 billion for 2026.