Lowest flight tax rate for Dutch Caribbean

Caribbean parts of the kingdom will remain in the lowest category of the Neth­erlands’ planned distance-based aviation tax, despite their consid­erable distance from Amsterdam. The Dutch government says the exception is justified by the con­stitutional relationship and po­tentially serious economic conse­quences of higher airfares for the islands.

Under the proposed Flight Tax Differentiation Act, the Nether­lands intends to replace the cur­rent flat aviation tax with three rates from 2027. The amount will depend primarily on the distance between Amsterdam and the capital of the passenger’s final destination. The proposed rates are 29.40 euros for the low­est category, 47.24 euros for the middle category and 70.86 euros for the highest category.

Normally, destinations more than 5,500 kilometres from Amsterdam would fall into the highest cat­egory. Curacao, Aruba, St. Maarten and the so-called BES islands (Bonaire, St. Eustatius and Saba), how­ever, have been given an exception and placed in the lowest category.

The Dutch government says this decision was made deliberately because of the “special constitutional and societal ties” between the European and Caribbean parts of the kingdom.

According to the Jetten I Cabinet, charging the islands the higher long-distance rate would not sufficiently recognise their unique position within the kingdom’s constitutional system. More important­ly, independent research showed that a higher avia­tion tax would have “sig­nificant negative side ef­fects” for the economies of the Caribbean parts and for connectivity within the kingdom.

The decision also imple­ments a motion previously submitted by Dutch MP Jorien van Haasen con­cerning the position of the islands. The exception is particularly important for Curacao, which depends heavily on air connectivity with the Netherlands for tourism, family travel, edu­cation, business and medi­cal travel.

The new tax applies only to passengers departing from airports in the Euro­pean Netherlands. Flights departing from Curacao and the other Caribbean islands themselves are not subject to the levy.

The Netherlands intro­duced its current aviation tax in 2021. In 2025, passen­gers departing from Dutch airports paid a flat rate of 29.40 euros. The proposed system would make long-distance travel substantially more expensive, with the highest rate reaching 70.86 euros.

The Dutch government says the change is intended to make longer flights bear a larger share of their exter­nal costs, including climate damage, health effects and noise. The measure is also expected to generate an ad­ditional 257 million euros annually.

For the islands, however, the proposed legislation means the aviation tax would remain at the lowest rate rather than increasing to the long-distance rate that would normally apply based on their geographic location.

Earlier, the Council of State had raised legal ques­tions about the preferential treatment. They centred on whether destinations locat­ed at roughly the same dis­tance from Amsterdam can legally be taxed differently simply because they have different constitutional re­lationships with European countries.

The issue emerged during the council’s review of the proposed Flight Tax Dif­ferentiation Act, which is intended to introduce three distance-based aviation tax rates from 2027. While government proposes plac­ing the islands in the lowest 29.40 euros category, other Caribbean territories at ap­proximately the same dis­tance could face the highest rate of 70.86 euros.

The council specifically highlighted the striking dif­ferences that could arise between neighbouring des­tinations. For example, St. Maarten would be placed in the lowest category, while Martinique and St. Barthelemy would fall into the highest one, even though their capitals are located at almost the same distance from Amsterdam.

The differences stem from their legal status. St. Maarten is a country within the Kingdom of the Neth­erlands, but classified in European law as an Over­seas Country and Territory (OCT). Martinique is an outermost region of the Eu­ropean Union (EU), while St. Barthelemy is an OCT associated with France.

The council questioned whether the different treat­ment of overseas territo­ries had been established objectively and whether resulting differences in the treatment of EU citizens, European Economic Area citizens and airlines could be legally justified. It also raised the possibility that the favourable treatment of the Dutch Caribbean could provide an advantage to airlines operating flights to the islands, potentially bringing European state-aid rules into consideration.

The Dutch government rejected the suggestion that the arrangement con­stitutes unlawful discrimi­nation. According to the Jetten I Cabinet, the excep­tion for the Dutch Carib­bean is based on objective considerations, including their constitutional posi­tion and the substantial economic consequences that a higher tax could have for the islands.

Government also argued that the tax applies equally to all airlines operating from Dutch airports to the destinations concerned, regardless of nationality, ownership or business mod­el. It therefore concludes that the arrangement does not constitute prohibited state aid.

Following the advice, the government expanded the explanatory memorandum accompanying the bill to address the European-law questions. The legislation still has to pass through the Dutch parliamentary pro­cess before the differenti­ated rates can take effect.

The Daily Herald.