Hungarian oil giant MOL may sue Slovakia over windfall tax

The Hungarian oil giant, Mol and its Slovak subsidiary, Slovnaft are planning on suing the Slovakian state in an arbitration court in Washington, DC, over the imposition of a 55 percent windfall tax on the oil company, and because of nationalist rhetoric used to justify the same – Euractive reports. Although the Slovak state has already made several concessions compared to the originally planned tax bill, Mol and its subsidiary say this is still too much.

Update: In an earlier version of this article, we wrote that Mol is suing the Slovak state. They later contacted us to clarify that they were still working on the details, meaning that they were only likely to file the lawsuit.

Slovakia introduced a 55 percent windfall tax on energy companies like Slovnaft in December. Although the tax was originally set at 70 percent and was due to run until 2025, it was eventually shortened to one year and the rate was reduced.

Mol also has a problem with the fact that, when presenting the law, the former Slovak Finance Minister Igor Matovič justified it as a move against the Hungarian owner. During the debate in Parliament, Matovič argued that the tax would allow Slovakia to get more money from the Hungarian owner.

The intention is to use the tax collected this way to reduce the burden on sectors with the highest overheads and to relieve the burden on households brought on by the increased utility costs. ExxonMobil has recently sued the EU in Washington over the imposition of extra tax, a case that is still ongoing.