A High Court challenge by Vermilion, operator of the Corrib gasfield off the west coast, over the windfall gains tax on the energy sector will be considered for entry to the fast-track commercial division of the court later this week.
Vermilion Energy Ireland Ltd, Vermilion Exploration and Production Ireland Ltd, and Vermilion Energy Corrib Ireland Ltd have brought proceedings against the Minister for the Environment, Climate and Communications, Ireland and the Attorney General.
An application to have the case admitted to the Commercial Court on Monday was adjourned to later this week after Michael Cush SC, for Vermilion, said there had been a “new development in Belgium” concerning this matter. Counsel said he would be in a position to update the court on that development on the adjourned date.
Last year, Ireland introduced legislation giving effect to an EU regulation on emergency intervention to address high energy prices. It meant energy companies had to pay a “solidarity contribution” at a minimum rate of 33 per cent, calculated by reference to taxable profits in the fiscal years 2022 and/or 2023.
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It applied to profits which are above a 20 per cent increase in the average of taxable profits and member states could decide whether or not to include 2022.
In an affidavit seeking entry to the list, Jarlath Trench, managing director of Vermilion Exploration and Production, said as a result of the Irish law, Vermilion had been exposed to solidarity contribution liabilities that were contrary to law.
They have already paid €98.9 million for 2022 and another €40 million or more is due for 2023.
Vermilion operates the State’s only gasfield which has been developed at a cost of €3.6 billion and provides 19 per cent of the State’s gas requirements.
While the first production from the field was in 2015, Mr Trench said Vermilion had accumulated significant losses which under Irish tax law could be carried forward indefinitely to offset against future trading profits. However, this did not apply to the liability to pay the solidarity contribution, he said.
Vermilion seeks, among other things, return of the money it has already paid and declarations that relevant provisions of the EU regulation are invalid as a matter of EU law. They are also, it is claimed, in breach of the Constitution and the European Convention on Human Rights.
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