Spain’s Senate has given final approval to taxing banks and big energy companies extra for excess profits, a measure aimed at easing the cost-of-living crisis, although smaller local lenders and subsidiaries of foreign banks in Spain are largely left out of the provisions, Reuters reports.

At the same time, the Portuguese Parliament also approved the imposition of a 33% tax on the excessive profits of energy companies and food retailers, given that the inflation rate is at the highest level in the last 30 years.

In the case of Spain, banks will be charged a 4.8% tax on net interest income and net commissions that exceed the 800 million euro threshold.

For energy companies with a turnover of at least one billion euros, excluding regulated internal activities and external operations, the tax is of 1.2%, according to Agerpres.

Lenders and energy companies opposed the regulations and threatened to challenge the new tax regime in court.

By adopting this law, the Spanish Government hopes to obtain seven billion euro by 2024 to finance measures to alleviate cost of living pressures. But the Bank of Spain estimates that the revenues obtained will be lower, after excluding regulated domestic activities and external operations of energy companies.

At the same time, in Portugal, the new tax is imposed on companies in the oil, gas, coal and refining sectors and also on food retailers.

According to the approved scheme, the part of the company’s profits that exceeds 20% of the average profits in the last four years will be taxed at 33%. The new rate will apply in 2022 and 2023.

In Portugal, the standard corporate tax is of 21%.

In the first nine months of 2022, Portuguese oil & gas Galp’s profit climbed 86%, while the second largest retailer, Jeronimo Martins, reported a 29% advance in net profit.

In Portugal, consumer prices rose 9.9% in November, up from 10.1% the previous month, when it was the highest level in three decades.