The Spanish government has submitted draft legislation for the introduction of windfall profits taxes on energy and banking sectors as announced by Prime Minister Pedro Sánchez during his state of the nation speech on 12 July 2022. The draft legislation includes measures to levy tax at the rate of 1.2% on the revenue of large energy companies and at the rate of 4.8% on net interest and fee/commission income of large banks. Whether the taxes would be levied is based on revenues in 2019. For energy companies, the tax would be levied if a company's revenue was at least EUR 1 billion in 2019 from energy sales in the Spanish market. However, if revenue from energy sales is less than 50% of a company's total revenue, the company is excluded from the tax. For banks, the tax would be levied if a bank's net interest and fee/commission income was at least EUR 800 million in 2019. For both energy companies and banks, the taxes will not be deductible for corporate tax purposes. It is also forbidden to pass on the cost of the taxes to customers, with penalties of 150% of any amounts passed on. As drafted, the taxes will be payable in 2023 and 2024 based on revenues in 2022 and 2023. Final payments will be due in September of each year, with a 50% payment on account in February.