Abstract
Windfall tax is a somewhat rarely used concept of a tax that penalises profits that have "fallen into the lap" of taxpayers, so to speak. These are incidental earnings that people have not earned through their efforts, work, or business, and therefore taxing them will not deter them from further efforts.
In the Czech Republic, this method of taxation was first used in the form of a levy on solar electricity from January 2013. The second time, the Windfall Tax has stirred up expert and lay discussion more significantly when considering taxing in this extraordinary way companies whose profits have skyrocketed in the wake of the energy crisis and the invasion of Ukraine in 2022.
This second proposal is an amendment to the Income Tax Act and in several respects is not, in my opinion, an entirely ideal way of dealing with the situation. The Constitutional Court is rather restrained in its review of tax laws and leaves the legislator quite a wide margin of discretion in considering how to set the tax policy of the state.
However, in several key rulings, it does give the legislature firm boundaries, particularly with regard to the temporal scope of tax laws and also discrimination against taxpayers, both pressing features of the Windfall tax proposal that was introduced in the fall of 2022. In particular, In the paper I'm focusing on the intended retroactivity of the proposal, which was ultimately not approached with the argument of unconstitutionality, which I am not entirely convinced of, and which was rather used as an effective weapon of the opponents of this tax.
I'm looking at the issue of the Windfall Tax mainly from a constitutional-legal perspective, although the economic and financial-legal perspective cannot be completely omitted for a full understanding.