No fat tax in the Netherlands

By Goran Danilović


In recent years, the so-called "fat tax" has become increasingly popular among the member states of the European Union ("EU"). A fat tax is a tax or surcharge that is placed upon fattening food and/or beverages. The general aim of a fat tax is to discourage unhealthy diets and offset the economic costs of obesity. 
European food industry workers and manufacturers, represented by the European Federation of Food, Agriculture and Tourism Trade Unions ("EFFAT"), and FoodDrinkEurope respectively, have recently opposed, by means of a joint position , the introduction of any forms of fat taxes on foods by the governments of different EU member states, urging the EU member states to focus on broader measures to encourage responsible eating habits and positive behavioural change among consumers in the EU.
In that regard, the Netherlands has carefully considered any commitment to the introduction of such a tax, taking into account the recent experience undertaken by Denmark with regard to imposing a "fat tax".


In October 2011, Denmark introduced a "fat tax" by targeting foods containing more than 2,3% saturated fat, including dairy produce, meat and processed foods. However, in November 2012, the Danish Tax Ministry announced it would abolish the "fat tax", stating that it failed to change the eating habits of Danish inhabitants, having opposite effects such as inflation of food prices, increase of cross border trading and high risk of loss of Danish jobs.

The Netherlands

In the Netherlands, the possibility of a "fat tax" was first raised at the session of the Senate with regard to the Tax Plan 2012 on December 13, 2011. During the session, the State Secretary of the Ministry of Finance (hereafter "the Secretary") made a pledge, in view of further developing a possible tax burden shift from income tax to VAT, to take into account a possible increase of VAT with regard to certain harmful goodies such as fat.
In his letter of March 20, 2013 to the Senate of the Netherlands, the Secretary informed the Senate with regard to this pending fiscal pledge and submitted its final conclusion related to the possibility of introducing an increase of VAT for fats.

In that regard, the Secretary started by referring to the enacted Act on the elaboration of fiscal measures regarding the Budget Agreement of 2013 (hereafter "the Act"). According to the Act, the Secretary emphasized that it has been decided to solely proceed with an increase of the general VAT rate that is (partially) to serve as a basis for a reduction of the income tax in the Netherlands.
The Secretary further elaborated that these fats (being part of finished products) are already covered by the VAT rate applicable to the finished products. The Secretary explained that a possible increase of the VAT rate to the fats would involve the case where the finished products (encompassing the fats) were to attract a reduced VAT rate (for example in case of foodstuffs). In such cases, the applicable reduced VAT rate of the finished products would have to be raised to the general (i.e. higher) VAT rate in the Netherlands. In that regard, the Secretary pointed out that such a process would result in a troublesome distinction policy towards different food products and would pose a high burden on the authorities with regard to the implementation and controlling process thereof.

Furthermore, the Secretary made a reference to the unsuccessful attempt of the "fat tax" introduced in Denmark as described above. Taking all the mentioned aspects into account, the Secretary concluded that it is not desirable (or even possible) to introduce a so-called "fat tax" in the Netherlands. Therefore, any possibility of introducing a "fat tax" in the Netherlands should be disregarded in the near future.

European Union

Although the Netherlands has refrained from introducing a "fat tax", support for such a tax is gaining momentum in several EU member states, thus raising the question whether the EU should consider stepping in so as to adopt an EU-wide "fat tax" scheme that is to be applied in all EU member states.

To be continued…