Netherlands planning to start taxing air travel by around €7 per passenger, from 2021

The Netherlands plans to impose a €7 tax per passenger in 2021 if the EU fails to come up with an aviation fuel tax.  Momentum is building for a crack-down on aviation’s environmental impact. The Netherlands’ finance state secretary said its draft flight tax bill could yield €200 million and “help close the price gap between plane tickets and, for example, train tickets”. The proposals – still a draft, to be debated by politicians – are that any air passenger departing from a Dutch airport will be charged a maximum of €7.50.  Cargo planes will also be charged, at a rate of €1.92 for less noisy planes and €3.85 for more noisy aircraft.  There was a tax until scrapped in 2009. At present, unlike travel by car, bus or train, international flights from the Netherlands are not in any way taxed by the Dutch government. There has also been a proposal that the Netherlands and Belgium made earlier this year on imposing aviation taxes via bilateral deals – and the Netherlands may look at implementing others.  If there is EU agreement on another aviation tax, before 2021, then the current Dutch tax proposal will be dropped. On 13th May a report emerged that showed taxing jet fuel would cut EU CO2 emissions and have a limited impact on employment.

Netherlands ready to start taxing air travel

By Sam Morgan | 

14 May 2019

The Netherlands will impose a €7 tax per passenger if the EU fails to come up with an air travel solution of its own.

The Dutch government will introduce a €7 levy per air passenger in 2021 if the EU does not manage to set up a pan-European tax, as momentum builds behind calls to crack down on aviation’s environmental impact.

The Netherlands announced on Tuesday (14 May) that its draft flight tax bill could yield €200 million and “help close the price gap between plane tickets and, for example, train tickets”, according to finance state secretary Menno Snel.

Under draft rules, yet to be debated by politicians, passengers departing Dutch soil will be charged a maximum of €7.50. Cargo planes will also be charged, at a rate of €1.92 for quiet planes and €3.85 for noisy aircraft.

A statement by the Ministry of Finance said that “it includes measures to prevent a potential negative impact on Amsterdam Schiphol Airport’s role as a hub and on its international network of connections”.“Unlike travel by car, bus or train, international flights from the Netherlands are not in any way taxed by the Dutch government.

This is a key reason for introducing a flight tax,” Snel said in a statement.“Many of our neighbours already have a flight tax so it’s our priority to seek cooperation at European level,” the state secretary added, alluding to a proposal the Netherlands and Belgium made earlier this year on imposing aviation taxes via bilateral deals.

The announcement is clear that if a European-level tax looks likely in 2019 or 2020, the national legislation will be pulled. The Dutch government is organising a conference in June to assess whether there is appetite for more action beyond just Belgium and France

On Monday (13 May), a leaked EU report showed that the European Commission had concluded that a tax on jet fuel, currently exempted from levies by an international agreement, would cut carbon emissions and have a limited impact on employment.

The Dutch government said that it is also looking into the feasibility of a kerosene levy.



See earlier:

T&E found the EU sat on data showing benefits of ending airlines’ tax break on jet fuel

A leaked report for the European Commission shows that taxing aviation kerosene sold in Europe, by duty on all departing flights to all destinations of €0.33/litre, would cut aviation emissions by 11% (16.4 MtCO2). It would have no net impact on jobs or the economy as a whole while raising almost €27 billion in revenues every year.  Unlike road transport, airlines in Europe have never paid any excise duty on the fuel they take on at EU airports. Airlines are not even taxed on domestic flights where taxation barriers were lifted in 2003.  In contrast, jet fuel taken on for domestic aviation has been taxed for many years in countries such as the US, Australia, Japan, Canada and even Saudi Arabia.  European member states have, since 2003, had the power to start taxing kerosene uplifted for flights within Europe by using bilateral agreements, but have failed to do so. Over 20 EU states don’t tax international aviation at all (at least the UK has APD).  Aviation CO2 emissions grew 4.9% within Europe last year – while emissions from all other industries in the ETS fell 3.9%. CO2 from flying in Europe has soared 26.3% in the last five years – far outstripping any other EU emissions source. With realisation about the reality of climate breakdown, this increase cannot be allowed to continue. Fuel tax would mean more expensive flights, which would reduce demand.

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European elections: Top candidates for EU President demand tax on (aviation) kerosene, to help deal with CO2 emissions

Both the conservative Manfred Weber [German politician] and the social democrat Frans Timmermans [Dutch politician and diplomat] want to tax aircraft fuel. They are the main candidates to be the next EU Commission President, after Jean-Claude Junker steps down later in May.  But they are divided on the CO2 tax. Both want to abolish the tax benefits for aviation fuel. Airlines currently do not pay fuel tax on their fuel, due to historic international agreements. The injustice leads to lying being significantly cheaper than other means of transport. “The preference of the airline business must be ended.” Then the train would also have better chances in the competition.  Frans Timmermans wants to tax kerosene “unconditionally and quickly”… “If it fails at the international level, we have to introduce the tax EU-wide.” They disagree on whether carbon should be taxed, due to difficulties in protecting the poor.  The German Union parties have so far no uniform position on the CO2 tax. But Timmermans wants a European tax on CO2, and said the next President must make climate protection a top priority and push the transformation of the economy in the next 5 years.

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Scottish government has decided not to remove APD – tax-free flying is inconsistent with policies to cut CO2 emissions

The Scottish Government has decided to scrap plans to cut Air Passenger Duty (APD). The tax (just £13 for a return flight to anywhere in Europe) is paid by any passenger leaving from a UK airport.  Aviation pays no VAT on tickets and there is no duty of jet fuel. The Scottish government had wanted to reduce the tax by 50% initially, before eventually abolishing it. This has been threatened since 2016. Cutting APD would have the effect of making air tickets a little cheaper, so increasing the number of flights taken – and therefore the CO2 emissions from Scottish airports. Edinburgh airport said the number of extra passengers at Scottish airports could be one million. Finance Secretary Derek Mackay said reducing air departure tax was “no longer compatible” with Scotland’s climate targets, and all sectors have a contribution to make to meeting the challenge of climate change. Cutting the tax would possibly slightly increase the number of visitors flying to Scotland, but the increase in the number of Scottish people flying abroad would be higher. Nicola Sturgeon declared a “climate emergency” in her speech to the SNP conference last month. Cutting the tax would have been entirely inconsistent with that.

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T&E: EU-wide taxes on jet fuel + VAT on plane tickets could help plug EU budget gap & address aviation CO2 impact

Subjecting domestic, intra and extra-EU aviation tickets to even a low rate of VAT would generate huge revenues for governments. Bill Hemmings, from European transport NGO T&E, estimates that taxing aviation fuel for domestic and intra-EU flights at the EU minimum rate of 33 cents/litre set by the Energy Tax Directive could generate about €9.5 billion in additional revenues each year. Abolishing the exemptions and applying a 15% VAT to all passenger transport could generate a further €17 billion. Even the European Commission calls these exemptions subsidies. A common ticket tax on EU departures could generate around €11 billion – or more. The Commission has now proposed reforms to VAT rates across Europe which, if agreed, will become the basis for the long-awaited definitive VAT regime in 2022. But instead of abolishing VAT breaks for airline tickets, the EU plan will treat even frivolous trips like a flight for a weekend break the same, in terms of VAT, as “necessities” such as foodstuffs, or pharmaceutical products. Transport is Europe’s biggest CO2 emitter and journeys by plane form a significant part.  One reason in the past why there was no VAT on international air trips was the difficulty in collecting it. However, it is now clear VAT could be charged at the rate of the country the plane departed from, for the whole cost of the ticket.

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Dutch Sec of State for Finance says an EU airline tax needed to limit low-cost flights

The Dutch Secretary of State for Finance, Menno Snel, has said the EU needs an airline tax to disincentivise consumers from using low-budget airlines for frequent travel. Mr Snel is to make his pitch for an EU-wide tax at a meeting of European finance ministers, as a way to curb aviation CO2 emissions. He said:  “We need to come up with some ideas. It’s not sustainable that we fly for a weekend with some friends all around Europe, when we could do it with the train.” Using the example of a €19 return ticket from Amsterdam to Berlin, he said: “[People] understand it’s not a fair price right now.”  Mr Snel said the tax could complement emissions reduction programs like the EU’s Emissions Trading System (ETS) and the UN’s CORSIA.  He said just having a carbon price does not mean there cannot ALSO be taxes on flights. Aviation is an under-taxed sector, paying no fuel duty and no VAT.  He understands that CORSIA itself is not sufficient to even dent aviation carbon emissions, and more taxes on flights are needed – on a global scale.  Mr Snell will suggest an EU-wide minimum ticket tax, above which individual countries could charge more. EU tax initiatives require unanimity to be adopted.

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German air passenger tax (now €7 – 40) under threat as negotiations continue to form new German government

Negotiators for a new grand coalition between Chancellor Angela Merkel’s conservatives and Social Democrats may drop a proposal to progressively abolish Germany’s air transport tax (the Luftverkehrssteuer.  The tax is levied on air ticket prices and costs between €7 and 40 euros depending on the distance flown, and generates about €1 billion per year. The airlines, of course, want the tax abolished, and claim it harms “competitiveness.” Aviation in Germany already pays no VAT (except on domestic flights) and no fuel duty.  The CDU (Merkel) and SPD negotiating teams were discussing abolishing the ticket tax, but so far the tax seems to have survived the talks. It would be crazy to allow aviation to pay even tax than it does now, bearing in mind its massive CO2 emissions. Aviation is on its way to eating up all of what remains of our chances to limit global warming to below 2°C as agreed in Paris. Aviation emissions are growing fast (up 8% in the EU in 2016), billions of people are waiting to catch their first flight (just 3% of India’s population have ever boarded a plane). Efficiency improvements in the sector are slow and shrinking. What’s more, by ignoring non-CO2 effects we’re underestimating aviation’s contribution to global warming by a factor of at least two.

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Dutch Government ditches eco ticket tax in efforts to halt declining traffic at Amsterdam Schiphol

Mon 30 Mar 2009

(GreenAir online)

The Dutch Government is to scrap from July 1 its air passenger ticket tax, first dubbed the ‘eco’ tax when it was introduced against major opposition by aviation and local industry last year. The controversial departure tax, which ranges from €11 to €45, is blamed for a steep decline in passenger traffic at the main Dutch airports, particularly at Amsterdam Schiphol. The move was welcomed by airlines, particularly those from the low-cost sector, who called for similar taxes to be abandoned in Italy, Ireland and the UK.

The tax was expected to raise around €300 million ($395m) a year but a commissioned report concluded that it would cost the Dutch economy €1.3 billion ($1.7bn) in lost revenue. At a time when the Government was trying to underpin the economy, reports, the Dutch transport ministry, backed by the aviation industry, business, tourism and right-wing parties, won the day against the environment ministry that had fought to keep the tax.

Schiphol Group, which operates Amsterdam Schiphol, Eindhoven, Rotterdam and Lelystad airports, said it had been hit by a strong decline in traffic and increasing international competition, and recently announced cuts in its work force of 10-25% by the end of next year. Schiphol Airport, Europe’s fifth biggest in terms of passenger enplanements, recorded a drop of 430,000 passengers in February, a 13.7% fall against the same month a year ago. The number of locally boarding passengers fell by 17.7%. The number of transfer passengers, who were exempted from the tax, declined by 8.5%.

The airport operator along with Dutch carrier KLM had previously warned that potential passengers would try to avoid the tax by flying from airports across the border in Belgium or Germany. The Belgian Government has already abandoned a proposal to introduce a similar tax.

The European Low Fares Airline Association (ELFAA) welcomed the “enlightened” decision to lift the tax, claiming it was discriminatory in that it was only levied on passengers starting their journey in the Netherlands and exempted cargo flights and transfer passengers. It urged the governments of Italy, Ireland and the United Kingdom to follow the Dutch lead in dropping airline passenger taxes.

Major low-cost operators including Ryanair, easyJet and Flybe voiced similar sentiments. “Ryanair has campaigned against high airport taxes and so called ‘eco’ taxes, which deter visitors and has cost the Dutch tourism industry millions in lost revenue,” said a spokesman for the carrier.

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