As a result of the analysis, the Company has identified significant arguments supporting the fact that the regulations on the basis of which the so-called windfall tax was paid violated the provisions of the Constitution of the Republic of Poland, the European Convention on Human Rights and Fundamental Freedoms and the Charter of Fundamental Rights of the European Union on a number of levels, in particular with regard to the prohibition of retroactive legislation, the right to property, the principles of universality, equality and fairness of taxation and the principle of equality before the law.
The measures implementing the obligation to pay the windfall tax were introduced almost a year after the adoption of the EU Council Regulation and almost 9 months after the deadline for the end date of the amendment act, which compounded the retroactive effect of this regulation. The Polish legislator did not take into account the criterion of a minimum of 75% of revenues from coal mining/sales as a prerequisite for qualifying the entity obligated to pay the windfall tax.
Notwithstanding the above, in JSW S.A.'s opinion, Polish regulations defined the circle of entities charged with the windfall tax more broadly than the circle of entities obligated to pay the temporary windfall tax under the EU Council Regulation. The Company does not manufacture products in the energy chain to any significant extent, and thus was not a beneficiary of the energy market situation. The Company has suffered significant negative effects from this situation and the associated increase in costs, as it consumes significant amounts of electricity.
The Company was the only entity in Poland obliged to pay the windfall tax, the accrual and payment of which resulted in a double charge to the Company's income for 2022 - first with 19% CIT, and additionally with 25% windfall tax. The payment of the windfall tax has significantly increased the public duty burden on JSW SA's income for 2022.
