The Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Act 2023 establishes a mechanism in Ireland for levying taxes on excess profits earned by energy companies amidst significant market instability. Complying with EU Council Regulation 2022/1854, this Act targets surplus profits from fossil fuel activities and aims to redirect these funds to support households and businesses grappling with soaring energy costs.

The legislation outlines a method for calculating taxable profits, comparing them against average profits from 2018 to 2021, with any profit exceeding 120% of this baseline deemed 'surplus'. With provisions to prevent profit shifting and ensure compliance, including stringent reporting requirements and penalties for non-compliance, this Act seeks to align Ireland’s energy market interventions with broader EU measures and address extraordinary market disruptions effectively.