There are different kinds of tax on water, like tap water tax and VAT. The aim of these taxes is to encourage companies and households to use water more sparingly.
Different water taxes
There are various different water taxes:
- tap water tax;
- value added tax (VAT);
- provincial groundwater tax;
- tax for installations on public land or water.
Businesses and private individuals pay tax on tap water, VAT and tax for installations on public land or water. Provincial groundwater tax is only paid by water companies.
No tax is levied on water used in emergency situations, e.g. water used by fire brigades to put out fires.
Tap water tax
Tap water suppliers pay tap water tax to the Tax and Customs Administration. They recharge the tax to their customers. It is listed separately on water bills. The aim of this tax to encourage people to use tap water sparingly.
How much tax someone pays depends on how many cubic metres of water they use. From 1 January 2015 water tax will only be levied on the first 300 m³. To find out the tap water tax rate for 2016, go to the Tax and Customs Administration website.
VAT on tap water
The government charges VAT on the consumption of tap water. This has been set at the low VAT rate of 9%. On your water bill you will see the VAT listed separately.
Provincial groundwater tax
Water companies have to pay groundwater tax to the provincial authorities. The rate of tax varies per province.
Tax for installations on public land or water
Municipalities can tax businesses and private individuals for installations on public land or water. Not all municipalities do so, and those that do charge different rates.