Dutch Lawmakers Urge End to Tax Breaks for Fossil Fuel Giants

Trust Bloomberg Tax's Premier International Tax offering for the news and guidance to navigate the complex tax treaty networks and business regulations.

By Linda A. Thompson

Opposition lawmakers have called on the Dutch government to stop funding the fossil fuel industry through a potpourri of tax breaks, exemptions and subsidies.

Lawmakers from the Greens, the Socialist Party and the Labor Party urged Dutch Minister of Economic Affairs and Climate Policy Eric Wiebes to end a series of financial and tax incentives benefiting fossil fuel companies during a Jan. 16 House of Representatives meeting.

A motion calling on the government to release an overview of the current “fossil subsidies and tax breaks and to develop a plan to phase out government support for the fossil industry” will be voted on by lawmakers Jan. 23.

“The Shells of this world have found a gold mine in destroying the climate. Why should we continue giving these companies even one euro?” Sandra Beckerman, a lawmaker for the Socialist Party, asked at the meeting.

A spokesperson for Royal Dutch Shell PLC said the company had followed the debate “with interest”. “We do not wish to comment further,” he said.

Lawmakers from the center-right government pointed out that the financial incentives under fire were mostly aimed at spurring innovation, and thus open to fossil fuel companies as well as renewable energy providers.”

The plenary debate was organized in response to a Sept. 28 report by the Overseas Development Institute (ODI), a London-based think tank, and Climate Action Network Europe (CAN Europe) that found that Dutch subsidies benefiting fossil fuel companies total 4.4 billion euros per year.

Lammert van Raan, a lawmaker for the Party for the Animals, said at the meeting that these Dutch government subsidies took a range of forms—from education subsidies for Shell and gradually decreasing tax rates, to energy tax exemptions benefiting the airline and shipping industries.

Kerosene and diesel are exempted from excise duties under Dutch law, and international airline tickets are subject to a 0 percent VAT rate.

Good or bad?

William Moorlag, a lawmaker for the Labour Party, pushed the government to scrap the current exemption from excise duties for kerosene and diesel.

“It is not acceptable that citizens are facing increasingly higher bills, and that the airline industry and shipping industry are being spared to such an extent,” he said.

Lawmakers from the governing center-right coalition such as Dilan Yesilgoz-Zegerius, a lawmaker for the pro-business VVD party, pushed back on claims that Dutch taxpayer money was being used to fund the fossil fuel industry. She pointed out that the incentives and breaks being described “fossil fuel subsidies” by opposition lawmakers were in fact mostly aimed at promoting innovation and the maintaining of “thousands of jobs” in the Netherlands.

A company like Shell, Yesilgoz-Zegerius said, is “heavily investing in innovation, which greatly helps us develop renewable energy.”

This view was echoed by Wiebes, who said that lawmakers’ use of the term “subsidies” throughout the meeting was debatable, as “stimulating savings or compensating damages does not constitute a subsidy for fossils.”

He also pointed to the Dutch toll on trucks and increased levies for waste incineration and electricity production as evidence that the country is committed to taxing companies who damage the environment with their economic activities.

To contact the reporter responsible for this story: Linda A. Thompson in Brussels at correspondents@bloomberglaw.comTo contact the editor responsible for this story: Penny Sukhraj at psukhraj@bloombergtax.com

For More Information

The ODI and CAN Europe report is at: http://src.bna.com/vHl

Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.

Request International Tax