The excise duty on fuels in the Netherlands will increase again from 1 July 2023. This will largely reverse the excise duty reduction that had taken effect on 1 April 2022. In fact, from 1 April 2022, the government had lowered the excise duty on fuels to compensate for the rise in energy prices.
The measure was specifically aimed at mitigating some of the costs on the fuel bill of motorists. However, it is indicated that the measure has limited impact and the budgetary costs are substantial.
With this reduction last year, excise duty per litre of petrol had decreased by around EUR 17 cents. In addition, excise duty on diesel and LPG decreased around EUR 11 cents and EUR 8 cents respectively. This reduction was extended by six months on 1 January 2023. In doing so, it was already announced that in the first half of 2023 it would be reviewed to what extent the reduction would still be necessary.
It has now been announced that the reduction will be permanently reversed. With the increase as of 1 July 2023, this will make excise duty on petrol around EUR 14 cents per litre more expensive. Regarding diesel and LPG, this increase will be around EUR 10 cents and EUR 6 cents respectively. This will bring excise duty rates back to almost the old level. A further increase will take place on 1 January 2024 due to indexation. After this increase, the excise duty rate will be higher than before 1 April 2022. However, no excise duty will have to be paid on the rate difference in respect of the stock held by petrol station operators at that time.
This increase is also expected to have side effects. Since the increased excise duties will also make transport depending on these fuels more expensive, there is a good chance that this increase will reflect in the price of other products and services.
In addition, as a result of the increase, differences in fuel prices compared to neighbouring countries will also rise again. As a result, more people who live in border areas will buy their fuel in another country. The Dutch State Secretary for Finance, however, indicated last year that these differences are not expected to disappear. Taking into account the minimum rates, these prices fall under the discretionary power of member states.
We will keep you informed of further material developments.
Should you have any questions with respect to the tax developments in the Automotive sector, please contact your trusted adviser or a member of our Automotive Team. We will be happy to assist you.